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Gaming Guru

Joe Weinert
 

Atlantic City Roundup

23 June 2003

The 2,002-room Borgata Hotel, Casino & Spa will open July 3, just in time for the high-grossing Fourth of July three-day weekend.

Although construction and operations crews still have considerable work remaining, all rooms and public areas will be fully functional for opening, spokesman Rob Stillwell said.

"When we open, we'll be done. There are obviously going to be adjustments going on that we want to make, but we're not opening half-done," he said.

John Mulkey, a Bear Stearns gaming analyst, said the opening period will be "trail by fire" for the 5,000 employees, who will be immediately swamped on the holiday weekend.

"It's obviously a major weekend for the city that would be tough to miss," Mulkey said.

More than 2,500 gamblers per day are registering for the My Borgata Rewards frequent-gambler program, officials said. They refused to say how many have registered overall.

The $1.1 billion Boyd Gaming-MGM Mirage joint venture will be the first new casino hotel to open in Atlantic City since the Trump Taj Mahal in 1990.

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The chairman of the New Jersey Assembly Budget Committee surprised the casino industry by proposing, and then getting approved, a gaming-tax plan that would cost the Trump casinos virtually nothing while putting most of the burden on Park Place Entertainment and Harrah's Entertainment.

Assemblyman Louis Greenwald's plan would tax a casino's adjusted net income at whatever rate necessary to achieve $58 million of revenue annually for four years. That's a sweet deal for Trump Hotels & Casino Resorts, which has never turned a profit since it formed in 1995. Last year, two casinos lost money and the Taj turned only a small profit.

On the other hand, Greenwald's plan would cost Park Place $32.4 million and Harrah's $17.1 million, based on last year's results. That's a tax rate of 21.7 percent.

To discourage casinos from trying to lower profits, Greenwald set last year's results as a minimum for the next for years.

"All this does is reward failure. It doesn't make any sense," said Aztar executive Dennis Gomes, president of the Casino Association of New Jersey.

Greenwald deflected criticism, saying only the rich casinos would pay while protecting struggling casinos and saving jobs. If Trump becomes profitable, he said, then he would have to pay.

"That'll make history," cracked state Sen. Bill Gormley, the industry's chief advocate in Trenton. "That's a real knee-slapper."

Greenwald's plan would raise another $32 million from hikes in parking fees, taxes on leased slot machines, increased slot-license fees and increased regulatory fees.

Gormley and the industry countered late in the week with their own plan to raise $90 million for the state, but Greenwald's committee rejected it.

"For them to go around and say they don't want it, the only conclusion we could reach is they don't care about the money," Gomes said. "They want to try to punish us."

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Park Place Entertainment promoted Donna Graham to be president of the Atlantic City Hilton, putting women in charge of daily operations at five of the city's 11 casinos.

Graham was previously executive vice president of operations at Caesars Atlantic City and before that chief financial officer for all Park Place casinos in Atlantic City.

She joins Liza Cartlidge of Harrah's, Audrey Oswell of Resorts, Pamela Popielarski of Tropicana and Cathy Walker of Trump Taj Mahal in the city's exclusive club of female casino bosses.

"I think that over the years, as more women have gained management experience in operations, it's just normal to see them start to rise to top-level positions in the industry," Oswell said. "I really don't look at as gender. So long as a person is competent and professional, it doesn't make a difference."

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Three days after the New Jersey Casino Control Commission found MGM Mirage qualified to be co-owner of Borgata Hotel, Casino & Spa, New York authorities accused the company's racetrack partner of "rampant criminal activity."

Attorney General Eliot Spitzer said a three-year investigation showed that the New York Racing Association "functionally financed criminal operations, essentially allowing tellers to borrow seed money to run money laundering, gambling or loan sharking operations."

MGM Mirage in mid-April made a deal with NYRA to operate 4,500 planned video lottery terminals at Aqueduct racetrack in New York City.

Spitzer's 62-page report noted the deal with MGM Mirage but otherwise did not mention the company.

MGM Mirage spokesman Alan Feldman said his company would notify casino regulators in other states and "continue to monitor the situation."

The New Jersey Division of Gaming Enforcement declined comment.

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A New Jersey woman who voluntarily banned herself from entering Atlantic City casinos became the first person on the state's self-exclusion list to forfeit a jackpot.

The woman, identified only as W.I., won a $1,600 slot jackpot at Caesars Atlantic City last Oct. 5. When she went to collect, Caesars identified her as one of the 148 on the self-exclusion list and withheld the amount.

Caesars had to relinquish the woman's winnings, along with $80 she had on the credit meter, to the Casino Control Commission.

The state launched the self-exclusion program for compulsive gamblers in September 2001. W.I. signed up five weeks later.

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