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Gaming Guru

Joe Weinert
 

Atlantic City Roundup

5 May 2003

ATLANTIC CITY -- Atlantic City casinos will offer the city's 34 million visitors something new this summer: Booze on the beach.

Caesars, Trump Plaza and Hilton are taking advantage of a new city ordinance that allows casinos to operate open-air bars just yards from the surf of the Atlantic Ocean. And far from offering a few kegs and margaritas from beneath a beach umbrella, the three casinos are erecting full-scale nightclubs on the sand.

"I think the message is that we're staged to be a world-class resort, one that needs all the amenities it's capable of producing," said Frank Freedman, Plaza's vice president of food and beverage. "For the longest time one of the great attributes we have, which is the Atlantic Ocean, has never been utilized to its full potential."

The beach bars will serve the public and comped gamblers alike. In addition to a variety of traditional and beach-themed drinks, the casinos plan to offer cold food, live entertainment, dance floors and special promotions to make them party spots.

"It's going to be a nice place, not a kegger party by any means. It's a nice place for people to come and enjoy themselves and have a nice time," said Steve Whiteside, Caesars' vice president of hotel operations.

Caesars and Hilton plan to open their bar May 17, with Plaza following five days later. They'll be open weekends until June 21, then daily through the summer.

As for the six other Boardwalk casinos, Bally's, Tropicana and Trump Taj Mahal say they don't have enough beach to make a bar work; Showboat says a Boardwalk remodeling project makes a bar unfeasible this year; and Resorts and Sands say a bar is an option for next year. Bally's, Tropicana and the Taj say a citywide beach-replenishment project scheduled for the off season will allow them to operate bars next year.

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Casino executives blamed war distractions, a bad economy and the Easter slowdown for a 4.7 percent decline in gross gambling revenue last month.

Atlantic City's 11 casinos won $344.1 million from gamblers in April, marking their third straight month of revenue declines.

"The war was the big thing, no question. When it started it, took the customers' interest for a couple of weeks," said David Jonas, senior vice president of Atlantic City operations for Harrah's Entertainment. War worries and the April 15 tax-filing deadline magnified economic concerns, he said.

One casino, Harrah's Atlantic City, reported a revenue increase for the month. It won $37.5 million, up 13.8 percent, thanks largely to the hotel addition it opened last May and a December casino expansion.

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Atlantic City's junior version of Las Vegas' Forum Shops will open six to nine months later than planned.

Park Place Entertainment, which owns the shuttered Shops on Ocean One pier across from Caesars Atlantic City, said Gordon Group Holdings just now is beginning demolition and pile testing on the 900-foot-long structure. Gordon Group, which also helped create the Forum Shops at Caesars Palace, is responsible for financing, redeveloping and leasing what will be known as The Pier at Caesars.

Park Place CEO Wally Barr said the delay was caused by the "tax controversy in New Jersey," but he did not elaborate. Gordon officials did not return phone calls. The $80 million project is now scheduled to open in late 2004 or early 2005, Barr said.

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After setting financial records in each quarter last year, Trump Hotels & Casino Resorts got off to a rocky start in 2003.

The company reported a net loss of $24 million, or $1.09 per share, compared to a loss of $4.6 million, or 21 cents per share a year earlier. Its cash flow declined 23 percent, to $56.8 million, on net revenue of $278.8 million, down 6 percent.

Trump officials blamed the declines on a tough comparison to last year's results, snowstorms in February, war distractions and the weak economy.

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The state of New Jersey would be better off allowing the Atlantic City casino industry to grow naturally than to impose new taxes on it, according to a study funded by the Atlantic City Regional Chamber of Commerce and the Casino Association of New Jersey.

The study by Spectrum Gaming Group said the summer opening of Borgata Hotel Casino & Spa and other casino expansions will generate up to $342 million in additional revenue from various tax sources over the next three years. That's almost as much as the state figures to collect by imposing new gaming taxes, but without the negative consequences to the casino industry, the study found.

Gov. James McGreevey wants to raise the casino-revenue tax by two percentage points to 10 percent, impose the 6 percent sales tax on casino complimentaries and create a 7 percent hotel tax.

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Showboat General Manager Tom O'Donnell retired at the age of 52, saying he needed to walk away after 10 years as a casino boss, spending too little time with his children and gaining perspective after the premature death of a relative.

Harrah's Entertainment promoted David Jonas to senior vice president of Atlantic City operations, putting him in charge of Showboat and Atlantic City. He had been general manager of Harrah's Atlantic City. Before moving to Harrah's, Jonas spent 12 years at Showboat.

(Joe Weinert covers the gaming industry for The Press of Atlantic City. He can be reached at jweinert@pressofac.com