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Gaming Guru

Joe Weinert
 

Atlantic City Roundup

5 August 2003

The new $1.1 billion Borgata Hotel, Casino & Spa is going to be at or near the top of the Atlantic City revenue list in its first month of operation, based on early data.

The casino won an average of $1.6 million per day from gamblers in its first 26 days of operation, parent company Boyd Gaming disclosed on its second-quarter earnings conference call. By comparison, Caesars led the city in revenue in July 2002 with an average win of $1.7 million.

Borgata's 3,590 slot machines each won an average of $306 per day, which is higher than the $262 per-slot, per-day average in Atlantic City a year earlier but behind market leader Harrah's ($344).

Borgata's 145 table games each won an average of $4,257 per day, which is higher than the city average of $3,122 a year earlier but lower than the market leader Caesars ($4,425).

"Keep in mind (competing casinos) have 24 years of customer relationships and databases and experience and we have 26 days," Boyd Chief Financial Officer Ellis Landau said.

"We've had lots of customers from the beginning. We don't think the crowds are a one-time summer phenomenon. We think the best is yet to come," he said.

Borgata's customer base swelled to 235,000 by July 28, with 5 percent of those rated in the premium class of gamblers. Some 37 percent of those in the database were under age 50.

Borgata disclosed that it opened on July 2 with only 1,100 of its 2,002 rooms, working up to 1,900 rooms by the July 26 weekend.

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Atlantic City will lose its distinction of being the country's first gaming jurisdiction to report gambling revenues each month, thanks to Borgata.

Borgata confirmed that it will not participate in the "pass-around" revenue exchange among casino executives that takes place on the second business day of each month. For the last two decades, a finance executive at each casino has shared his or her casinoâs results with all other casinos, knowing they'll become public anyway when theyâre submitted to the state Casino Control Commission by the 10th of each month.

Readers of the local newspaper, Wall Street analysts and gaming observers all over have come to count on seeing the numbers early each month. Now, they'll have to wait until the middle of each month.

Robert Boughner, Borgata's CEO, said he's worried about the legality and accuracy of the early revenue exchange. Providing other casino executives with the results "is a potentially unlawful practice" because it could violate Regulation Fair Disclosure, he said. Reg FD, as it's known, prohibits companies from selective disclosure.

Boughner further said revenue disclosure is the province of the casino commission and that the pass-around numbers are usually slightly higher than the official results because they include amounts yet deducted for wide-area progressive jackpots.

Other casino executives grumbled that Borgata is breaking tradition and denying the public the quick access to revenue results they've come to expect, but Boughner was unfazed.

"The people Iâm most concerned being bent out of shape are the regulators who oversee this industry. Certainly Reg FD concerns us greatly, so there will be no selective disclosure of information," he said.

Wally Barr, Park Place Entertainment chief executive, downplayed any regulatory concerns. He said his casinos will have to rethink their policy of early disclosure if Borgata won't join in.

"I'm not about to give and not receive. That was the basis on which this was done all those years," Barr said.

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The New Jersey Casino Control Commission is taking its self-exclusion program on the road in an attempt to reach more compulsive gamblers.

Only 150 have signed up for the two-year-old program, which allows compulsive gamblers to voluntarily ban themselves from casinos for one year, five years or a lifetime.

"Considering New Jersey is two years old, the number is exceptionally low because nobody really knows about the program," said Arnie Wexler, a compulsive-gambling counselor.

In Illinois, 786 gamblers registered for self-exclusion in the first year. In Missouri, more than 5,700 have signed up since the program began in 1996.

New Jersey has only two locations for gamblers to register: at the casino commission office in Atlantic City or the Division of Gaming Enforcement office in Trenton. With the amendment, the commission will accept registration at temporary sites that rove throughout the state.

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Borgata executives want their casino hotel to be known as a sexy place, but the message callers receive when dialing 1-800-BORGATA isn't exactly what they had in mind.

The number is for a sex-talk firm, which could surprise callers who mistakenly call that number instead of the casino's 866-MY-BORGATA number.

"We're aware of it, but it's not really an issue. We're reinforcing our number pretty well. That's been proven by the volume of phone calls we're receiving," Borgata spokesman Michael Facenda said.

Facenda wondered whether the sex-talk firm was trying to capitalize in Borgataâs good name. Casino officials plan to investigate, he said.

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