Summer "just ok" for AC's casinos...

September 2007

Atlantic City is truly at a crossroads on this Labor Day weekend as September begins.

According to Insider sources, the summer season has been "just ok" for Atlantic City as competition from Philadelphia slot parlors continues to eat away at Atlantic City casino gaming profits. That, and the smoking ban, has the industry taking a hard look at itself as the summer season gets ready to evolve into the fall.

The mantra for success continues to be more rooms, rooms, rooms. And with projects on deck like Revel Entertainment and Pinnacle, the key to the future will be getting people to extend their stays beyond twenty four hours.

Even as successful as the Borgata has been, the average stay is still only eighteen to twenty four hours.

And that has to change if Atlantic City is going to grow the market. The development of Bader Field continues to be a sticking point as well. The proposed casino Boardwalk projects do not want casino development on Bader Field, while the city does. And now that Steve Wynn's name has surfaced, look for more controversy here...meanwhile, the most emerging market in Atlantic City now is the Asian market. Anybody know Chinese???

Harrah's finalizes HOB takeover...

The oft-rumored takeover of the House of Blues by Harrah's Entertainment finally materialized last month as Showboat threw a party for all the members of the Foundation Room.

Harrah's Entertainment management continually reiterated that there would be no changes in the Foundation Room for members, and expanded the benefits of the members. Many were worried that the takeover of Harrah's would turn the Foundation Room into a high rollers club, with casino play ruling the day. But the contract Harrah's signed with Live Nation (House of Blues) is restrictive in the sense it requires Harrah's to keep the HOB model.

Still, it will be intriguing to see what happens here as Harrah's has been using the Foundation Room for parties for its casino hosts. And Harrah's plans to use the Foundation Room for late night parties after 3am, as it did in late August when it had a party for some members of "The Entourage" cast. The takeover means that one of the more colorful figures on the Atlantic City entertainment scene – Michael Grozier of the HOB – is no longer running the Foundation Room and HOB's overall operations. Grozier was cutting edge – to say the least. He has been replaced by Brett C. Kline who is cut from the Harrah's corporate mold. Do not expect to see the wide spectrum of acts at HOB now that Harrah's has taken control. The Showboat's aging clientele is light years away from what the HOB and the Foundation Room is all about. That being said, the Foundation Room has lost some of its luster in recent months.

At one time it was the hottest place in the city, but that distinction now probably belongs to The Pool at Harrah's.

Meanwhile...

One of the more underrated spots of the summer was The Deck at Trump Marina, particularly on Thursday night when the Bruce Springsteen Tribute Band played – B Streets. On a recent Thursday it appeared that everywhere else in Atlantic City was dead, with the exception of The Deck with its live music. The Marina continues to be a property with tremendous potential if only some reinvestment would be made in it. It aches for a refurbishment, but still offers a unique setting with The Deck, which will remain open in September on weekends.

Meanwhile....

The Beach Bars in Atlantic City have had another successful summer. Did you know that one beach bar did $2 million worth of business in just 60 days?

Wow.

Even with setup and break down costs, that is a lot of business. Not everybody is thrilled with the Beach Bars however. Some veteran local bar owners in Atlantic City claim that they have killed their business.

Air Show 2007...

The Atlantic City Air Show was bigger and better than ever and drew rave reviews. The Air Show, however, is not a big money-maker for casinos as it basically brings in families who take up the parking spaces in the casino garages.

Families and casinos simply don't mix; no matter how you want to spin it. And that explains why family attractions continue to struggle in Atlantic City.

The Insider is written by a prominent local business person who chooses to remain anonymous at this time. The opinions and news bites are that of The Insider and do not necessarily reflect the positions or views of this magazine, it's staff, or its publisher.