The closing of the Atlantic Club on Atlantic City’s Boardwalk qualifies as a visual learning aid for industry followers who believe success in the casino business requires nothing more than a big room full of slots.
Successful casinos are the ones that keep their experiences as fresh as the day the building was new. The Atlantic Club stopped doing that a long time ago. It’s a fate experienced by other casinos as owners exhaust their supplies of money and, perhaps, imagination. Customers look elsewhere for their fun and games.
I wonder how many of the analysts who see the Atlantic’s closing as saying something important about the future of Atlantic City were in the area thirty-plus years ago when Steve Wynn opened the same building as the Golden Nugget and quickly turned it into the city’s most profitable resort.
It was never the biggest of the Boardwalk resorts but marketed with enough flair to have high-rollers lining up for the opportunity to enjoy what it had to offer. The place projected a lot of personality. Those were the days when Wynn was doing his own TV commercials with the likes of Frank Sinatra and Kenny Rogers.
When Wynn decided to exit Atlantic City and sold the Nugget to Bally in 1987 I asked him if he thought Bally could be as successful with it as he had been. His response to my question then: “They can if they don’t mess it up.”
It turns out Bally and Wynn did not exactly see eye to eye on the subject of what it took to maintain a profitable course. Neither did any of the subsequent owners or managers who had their shots at seeing what they could do with the former Nugget.
The experiences it offered became less intriguing as fresh competition blossomed elsewhere.
Gov’t. out of touch?
What we have here is a blatant reminder that some state and federal laws are badly out of synch.
Look no further than the issue that online gamblers and marijuana merchants have in common. A New York Times headline several days ago put it this way: “Banks say no to marijuana money, legal or not.”
Substitute online gaming or poker for marijuana and the story could just as easily have been describing the difficulties experienced by online casino operators in Nevada, New Jersey or Delaware. They’re working hard to sell themselves to reluctant bankers or credit and debit card issuers.
GamingToday recognized this issue months ago, long before it was discovered by other news media outlets. It underscores the fact that the road to legitimization requires more than a single legislative act or the signature of a governor.
“It’s an educational process says,” Nevada Gaming Control Board Chairman A. G. Burnett, process being the most important word in that sentence as it applies to the constantly shifting array of possibilities in any culture.
State laws say one thing and federal laws say another.
Former Gaming Control Board Chairman Michael Rumbolz recently reminded me there are so many special interests to consider, interests such as those of financial institutions that may be in one jurisdiction trying to satisfy a customer in another locale who wants money transferred to a casino in a third location.
“That’s what you call a relationship issue,” he said.
Online slots and poker may be legal in three states but the federal legislation passed in 2006 still prohibits all U.S. banks from processing funds used for gaming purposes.
Recreational or medical marijuana is legal now in a number of states but federal law still lists it as illegal.
This leaves gamblers and marijuana merchants running all the risks associated with toting large chunks of cash from point A to point B. Cash can be lost, stolen or just forgotten.
It’s like the Las Vegas poker player who recently “forgot” a brown bag stuffed with $300,000 in the back of a local taxi whose driver found the cash and returned it, an act that resulted in him getting a reward of about $10,000.
“The guy it belonged to just forgot about it, he was not stoned or buzzed, he just forgot,” says a friend familiar with the incident.
The point of all this being gamblers and marijuana merchants are like the rest of us – prone to occasional lapses in judgment that can be costly because federal banking laws are not updated often enough to keep pace with changing cultural trends.
And bankers being bankers tend to take the conservative approach.
“Yup,” agreed another former Control Board chairman Mark Lipparelli, “We’ve got a lot of lawmakers and influential people reading off different pages, but alternatives are being developed.”
Where is another E. Parry Thomas when you need him? Thomas was the Las Vegas banker of a half-century or so ago who woke up one day to the realization that gaming was legal is Nevada. He decided to assist them with their financial needs at a time when bankers elsewhere shunned casinos.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. He can be reached at [email protected].