Caesars will work with local officials to identify alternative uses for the property, which will close June 2, the Las Vegas-based company said yesterday in a statement.
“There’s just too much supply in that market,” John Payne, president of the company’s central markets division, said in a telephone interview. “The Harrah’s has not been profitable for a while.”
The move is a sign that the U.S. gambling industry, faced with a proliferation of new casinos and consumers holding back on spending since the 2008 financial crisis, may be entering a period of retrenchment. In January, the Atlantic Club Casino in Atlantic City, New Jersey, also shut its doors.
Harrah’s employees will receive preferences for positions at other Caesars locations, Payne said. Gambling revenue in the area, where 10 properties compete, has fallen almost 40 percent from the 2006 peak. Three are owned by Caesars.
“It’s interesting that they were not able to sell it,” David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas, said in an interview. “The proliferation of gaming has hurt some of the more established markets. You don’t see the same optimism from people outside the industry willing to invest.”
Tunica, less than an hour’s drive from Memphis, Tennessee, was once a destination for gamblers throughout the southern U.S., Payne said. Casinos there took in $1.22 billion in 2006, he said. Last year, that number was $738 million. Caesars also owns the Horseshoe Tunica, the market leader, and the Tunica Roadhouse Hotel & Casino in the area.
The decision to close the 18-year-old Harrah’s is another step in Caesars’ restructuring. The company said earlier this month it will sell four casinos to an affiliate and reported yesterday the deal is opposed by some debt investors.
Caesars fell 3.8 percent to $22.02 yesterday in New York. The stock, controlled by Apollo Global Management LLC and TPG Capital, has risen 2.2 percent this year.
Separately, Casino City Press, a trade publisher, released an annual survey that showed the Indian casino industry grew 2 percent to $28.1 billion in 2012. That was half its pre-recession growth rate.
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