It seems as though a force that cannot be controlled, harnessed, or changed has overtaken the fate and future of Atlantic City, New Jersey. When reviewing its history, which is rich in development, tourism, World War II requisitioning, decline and decay, reinvention with legalized gambling, and more decline, one has to wonder how and where will it all end? Or will it end? With the closing of four of its brightest casinos in 2014 as the trend of tourists who gamble moved on to other neighboring states that also opened their doors to legalized gambling, competition has sucked the life blood out of Atlantic City, once and for all. Or has it?
What is really going on? Although the high rollers in real estate such as Donald Trump, Dennis Gomes, Merv Griffin, and now Mohegan Indian Tribal Casino Management try and try to revive the area to a gambling mecca of stature that will rival all others, the decline seemed to continue. The entire structure of workers, including union based workers in the Atlantic City working community have been caught up in a Titanic like scenario. The writing has been on the wall as the big ship continues to sink. Revenues have gone down so significantly that it is tantamount that each surviving casino do a complete reorganization of its operations and expenditures, especially where unions are concerned. This was demonstrated by the Trump reorganization which drove the unions to settle for less than what they wanted so that they could keep their jobs and the Trump Taj Mahal could keep its doors open. Cutting expenses has been an important vehicle for keeping the remaining casinos and hotels in business. Competition has been driving out the excessive and those that are not run well enough.
The Resort Casinos are still alive after almost perishing. The non-gambling aspects of the hotel are beginning to bring people back into the area for business. The Margaritaville restaurant, Jimmy Buffet’s restaurant chain is attracting customers who are there to enjoy the facility and not necessarily gamble. But for those who do wish to roll the dice, there is plenty of that to go around as well. The Resorts has begun to benefit from a formula that brings down the operational expenses. Adding more than gambling to the business model to attract new types of customers has helped a great deal. The businesses that realize that the area is changing are beginning to turn things around.
In late August, the Resorts commenced with a $9.4 million project improvement to the facility. The plan involves adding meeting and conference facilities so that other products will be available for business customers to purchase. Adding business meetings and events to the menu of amenities available at the Resorts will transform the image and re-brand it in a way that could open it up to an entire new class of customers, who will bring in more revenues. It is a lesson that must be learned as the area is crying out for more engagement than just gambling and all the seediness that goes with it.
Although the Resorts will still be driven by the casino business, it will have a new way to make ends meet so that it can survive what is happening to Atlantic City as competing cities have forced the area into a metamorphosis. “It was dead, and it has been brought back to life,” sitting president of Resorts, Mark Giannantonio recounted. “The year I started here, three years ago, this place lost $12 million.” Things have done an about face as he reported that in 2014 a profit was made of $2.5 million and he assures that 2015 will be much better still.
It is a simple realization that others in the recent past had just not made. Problems continued for the Resort Casino Hotel for many years prior to this recent turnaround. After the fight in 1988 between Donald Trump and Merv Griffin over ownership of the Resort owned project Resort Taj Mahal that was never completed by Resort International, Trump took it over and struggled with it for some time. It was set to close in December of 2014, until he got the unions straightened out with a settlement agreement that would keep its doors open. But somehow the Resorts Casino, which fell into a death spiral for years until it almost permanently closed in 2009, when then owner Colony Capital walked away from its mortgage, got a new lease on life. Dennis Gomes, a well schooled casino executive teamed up with Morris Bailey, a New York real estate entrepreneur and bought it for a deal of $31.5 million.
With the roaring twenties as its new theme and focus, they also decided to allow LGBT customers to frequent the establishment, announcing this to the world as the premier gambling casino in the United States that served this clientele. Unfortunately, this did not do much at all to increase revenues and put Resort Casino into solvency. It actually had the opposite result. In 2012, Gomes passed on and left Baily with the task of solving the problems that the Resort still seemed to be grappling with. Eventually, with the new leadership he struck with the Mohegan Indian Tribe’s expert level of casino gambling management, the daily operations and expenditures came under control and within budget. The Mohegan’s were given the incentive of a 10 percent share in ownership.
With this deal, Resorts also could cultivate customer relations through mutual access to the Mohegan maintained Customer Relations Management database of their Connecticut and Pennsylvania casinos. This was a, ‘if you can’t beat ’em, join ’em,’ business partnership that would save the life of the Resorts. Other deals were struck with the online PokerStars group but is still in the gambling regulator’s review process.