As reported last week in GamingToday, Atlantic City’s casino revenues continue to slump, with the probable result that 2007 will be first year in the industry’s history that revenue actually declined.
But, to the casinos credit, they’re not sitting idly by watching profits dwindle.
Atlantic City’s gambling halls are betting $10 billion on a plan to separate visitors from more of their money by remaking this seedy seaside resort into a hipper, hotter destination with top entertainers, glitzy rooms and swank restaurants run by famous chefs.
The city’s 11 casinos are in a frenzy of expansion and construction to compete with Las Vegas and to fight off unexpectedly strong competition from slots parlors in neighboring states.
Almost every casino here is spending millions of dollars to either expand or renovate, or has just finished doing so.
The building boom is adding thousands of new hotel rooms as casino owners aim to remake the resort as a national destination instead of a place for bus-riding day trippers to linger for a few hours before hitting the buffet and going home.
One of the most conspicuous projects is the second tower of the Borgata Hotel Casino & Spa. Dubbed The Water Club, the $400 million addition will include 800 new guest rooms, a two-story "spa in the sky," five swimming pools and other luxury amenities.
"What we’ve seen since 2003 when we opened is that it’s not merely gaming-centric any more," said Joseph Corbo, the Borgata’s general counsel and president of the Casino Association of New Jersey. "It’s the amenities everyone offers — the restaurants, the spas, the nightlife, the entertainment. Just this weekend alone, we have Billy Joel at the Borgata, and Josh Groban at Boardwalk Hall.
"In the competitive environment we’re in, we need to differentiate ourselves from those around us," Corbo said of the Atlantic City casinos. All told, the Borgata’s owners, Boyd Gaming and MGM Mirage, have invested $1.7 billion here in just four years."
The spending spree comes amid what seems destined to be the first year that revenues will decline in Atlantic City since casino gambling began in 1978. Much of the decline is being blamed on competition from newly opened slots parlors in Pennsylvania, New York and Delaware.
Atlantic City and Las Vegas are close when it comes to the amount of money they take in from gambling. Last year, Atlantic City netted $5.2 billion, while Las Vegas took in $6.5 billion.
But at $5 billion a year, Las Vegas does 10 times the non-gambling business Atlantic City does. That’s something Atlantic City is trying to fix with Vegas-type amenities: high-end shopping at The Pier at Caesars and The Walk, lavish indoor swimming pools like the one Harrah’s opened this summer, and signature restaurants by famous chefs such as Bobby Flay, Michael Mina and Wolfgang Puck at the Borgata.
Robert Corrales, a spokesman for the Casino Reinvestment Development Authority, said casino companies plan $10 billion worth of new investments in Atlantic City over the next five to 10 years.
Harrah’s Atlantic City is spending $550 million to add, among other things, a new 941-room hotel tower. Projects either done or nearly finished at the three other casinos owned by Harrah’s Entertainment Inc. — Bally’s Atlantic City, the Showboat Casino-Hotel, and Caesars Atlantic City — total $245 million.
Donald Trump’s three casinos have spent $225 million over the past two years renovating all 2,900 of their rooms, and additional projects are planned.Â
ever in its history."