Atlantic City is reinventing itself.
And the metamorphosis couldn’t come at a better time, as gaming revenue here continues to be severely impacted by the slot parlors in Pennsylvania and other nearby states.
The battering continued in October, the eighth consecutive month of revenue decline for Atlantic City’s gambling industry. The city’s casinos reported $384.4 million in revenue for the month, a 7.5 percent decrease from October 2006.
Total revenue for the first 10 months of the year was $4 billion compared with $4.2 billion in the year-ago period, a 5 percent decrease.
Casino officials are hopeful those trends will be reversed, once the "new" Atlantic City takes shape.
They add that five years from now, you might not even recognize this place.
A burst of new, luxurious mega-casino projects to be built by 2012 will transform the face of Atlantic City into a more futuristic — and profitable — gambling resort.
At least four companies are betting a combined $9 billion that the makeover will help Atlantic City catch up with Las Vegas as a place to come — and stay — for more than just gambling.
Last week, Revel Entertainment Group unveiled drawings of its new $2 billion casino-resort, to be called simply "Revel." Due to open in the second half of 2010, at 710 feet, it will be the tallest building in Atlantic City — at least for a while.
It will feature two thin towers standing perpendicular to the ocean, with as many as 3,900 rooms, and even Atlantic City’s first casino wedding chapel. The interior complex, between the towers, is curved and rounded so that it looks as if it has been shaped by gentle ocean waves.
Revel is partnering with investment firm Morgan Stanley on the project.
It will become Atlantic City’s 12th casino, and the first new one to open since the Borgata Hotel Casino & Spa debuted in 2003 and redefined the public’s image of what the Las Vegas experience should look and feel like in New Jersey.
Hot on the heels of "Revel" will be another mega-casino to be built by Pinnacle Entertainment on the site of the former Sands Hotel Casino, opening in late 2011 or early 2012. The granddaddy of them all, a $5 billion casino resort planned by MGM Mirage in the marina district next to the Borgata, will be the largest project Atlantic City has ever seen when the first dice start tumbling in 2012.
The burst of new investment is the largest in Atlantic City since the start of casino gambling in 1978.
Pinnacle has been tight-lipped about its Atlantic City project, other than to estimate its price at between $1.5 and $2 billion. It won’t say what it will look like or even what it will be called.
But last week, the company’s chairman and CEO, Daniel Lee, said that in addition to its Boardwalk project, Pinnacle might consider joining the scrum of casino operators vying to build on the former Bader Field airport property, a 150-acre tract whose land alone could fetch $1 billion on the open market.
"We have two in St. Louis; we could have two in Atlantic City," Lee said last week.
It marked a turnaround for Pinnacle, which had threatened for months to scrap its Boardwalk project if the city and state permitted someone else to build a casino on Bader Field. The company maintained it would be at a competitive disadvantage because the newcomer would not have to buy multiple parcels, knock down buildings and clean up the site — as Pinnacle is doing on the Sands property.
Saving the biggest for last, "MGM Atlantic City" will wrest the title from Revel as Atlantic City’s tallest building when it opens in 2012. It will have three hotel towers with a combined total of more than 3,000 rooms, the largest casino floor in Atlantic City with 5,000 slot machines, 200 table games and 500,000 square feet of retail space, among other attractions.
MGM is a partner in The Borgata with Boyd Gaming.
A possible fourth new casino to be built on land near the Atlantic City Hilton Casino Resort by Curtis Bashaw, the former Casino Reinvestment chairman, and Wally Barr, the former chief executive officer of Caesar’s Entertainment, is also on the drawing board.
The new casinos will join an already-expanding skyline: The Borgata, Trump Taj Mahal Casino resort, and Harrah’s Atlantic City are all building second hotel towers. Earlier this year, the Hilton floated the idea of a $1 billion expansion, but company officials won’t say if that’s still on the table.
The Asian connection
In addition to a rash of new development, Atlantic City is betting on something that Las Vegas has been parlaying for years — Asian gamblers.
Casinos in New Jersey gambling resort are betting on Asian gamblers to help them overcome dipping slots revenue, which hasn’t shown any significant signs of rebounding.
Casinos have begun taking steps to attract Asian gamblers such as hiring employees who speak Asian languages, adding Asian-theme restaurants and beefing up advertising in areas such as New York’s Chinatown.
According to a story in the Philadelphia Inquirer, Asian gamblers make up 15 to 20 percent of Atlantic City’s revenue.
They also make up one-third of the casinos’ table-game revenue, which is important considering that income from slots has fallen by about 8 percent over last year as neighboring states allow slots gambling.
"With all of the slots capacity in Pennsylvania and New York, we have to aggressively find a way to stem the flow out of Atlantic City,’’ Michael Asanloo, from Harrah’s Entertainment Inc., told the newspaper. "Asian customers and table games are a perfect add-on ... This is one way to compete and is critical for Atlantic City’s success."
To attract more Asian gamblers, the casinos have opened Asian restaurants such as Kwi at Caesars.
The Hilton has a seven-person Asian marketing team that includes Mandarin, Cantonese, Korean and Vietnamese speakers.
Eight of the city’s 11 casinos have beefed up their gaming areas to include traditional Asian games such as Pai Gow poker and Sic Bo.
In order to make their Asian clients more comfortable, the casinos have hired feng shui consultants to make their rooms more inviting and have put many of their employees through cultural training.