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Atlantic City Roundup

6 November 2001

by Joe Weinert

ATLANTIC CITY, New Jersey –- The Atlantic City casino industry bounced back to near-normal business levels in October, when gross gaming revenue declined only 1.7 percent, according to preliminary results.

The dozen casinos won $339.3 million from gamblers, a decline of $5.8 million compared to the same month last year. September revenue had declined 6.5 percent compared to the year-earlier month.

"I'm encouraged, considering the state of the economy and with what's happening in the world today. You can see the business is coming back," said Mark Brown, chief operating officer of Trump Hotels & Casino Resorts, which owns three Atlantic City casinos.

Citywide slot-machine revenue declined 0.4 percent while table-games revenue declined 5.4 percent.

Through 10 months, the city's casino revenue was $3.6 billion, down 1.7 percent. The October result ensures the industry will finish 2001 with the first annual decline in gaming revenue in its 23-year-history.

*****

Atlantic City on Nov. 2 marked the 25th anniversary of the statewide referendum that legalized casinos, making New Jersey the first state outside of Nevada to do so.

While the nation was fixated on Carter vs. Ford for president and New Jersey was preoccupied with a U.S. Senate race and local U.S. House races, city leaders campaigned furiously, believing casinos would save the decaying seaside resort. Two years earlier New Jersey voters rejected casino gambling, largely because it would have allowed the facilities anywhere in the state.

"We will not get another chance," then-Mayor Joseph Lazarow warned local voters. "If we lose, another state will get gambling and the boom there, and we will be heartsick.

The vote passed by 1.5 million to 1.2 million.

Today, Atlantic City is the second-largest gaming jurisdiction behind the Las Vegas Strip.

*****

MGM Mirage last week straightened what had been a publicly unyielding forward-leaning posture toward a proposed $1.5 billion casino hotel in Atlantic City.

Company officials, citing the vote to legalize casinos in New York, said they are now reassessing the situation, an abrupt shift from the previous 10 months.

"We do have to take a step back and evaluate just what impact, if any, that could have on the Atlantic City market and our plans there," said John Redmond, CEO of the company's MGM Grand Resorts division. "We have not put the brakes on, but there is a yellow light there, a caution sign, that we have to look at exactly what these states may or may not do."

The issue isn't just New York, Redmond said, but what other nearby states such as P ennsylvania, Massachusetts, Maryland and Ohio also do with regard to gambling expansion.

MGM Mirage had been planning to disclose the theme, scope and timing of its Atlantic City project by year end or early next year. An announcement still might come in that time, Redmond said, "it just may not be the announcement we had contemplated when we first had that discussion a couple of months ago."

*****

Although New Jersey does not expressly prohibit slots for tots, as Nevada does, the Casino Control Commission did take child-theming issues into consideration before approving the Popeye slots from Bally Gaming and Systems.

Commissioners, by a 5-0 vote, agreed with Bally and the Division of Gaming Enforcement that Popeye was a "nostalgic figure" and not primarily a children's icon any more.

*****

Park Place Entertainment said it will restart its $28 million expansion that connects its Bally's and Claridge casinos. The two-story connector will contain a walkway and shops on the first level and meeting space on the second level.

Work is expected to begin in January, with the first level open by July 4 and the second level by Labor Day.

Park Place had postponed that and two other Atlantic City construction projects in the wake of the post-Sept. 11 economic slowdown. A $50 million expansion at the Hilton and a $12 million facade extension at Caesars might be considered by the board of directors next spring, Chief Operating Officer Wally Barr said.

*****

Trump Hotels & Casino Resorts canceled all Christmas bonuses this year, saying it's more important to save jobs than spend $2.5 million for bonuses that range from $100 to $250 per person.

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

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