Atlantic City Roundup

7 July 2003

By Joe Weinert

The Borgata Hotel, Casino & Spa transformed from a $1.1 billion construction project to a thriving gaming resort at 11:38 p.m. Wednesday, becoming Atlantic Cityâs first new casino hotel in 13 years.

The gaming floor began to fill up an hour after actor Stephen Dorff rolled a 10 to open the casino and it stayed jammed through the Fourth of July weekend.

"We are jazzed," said Robert Boughner, Borgata's chief executive and creative mastermind.

Guest after guest favorably compared Borgata to the best Las Vegas Strip gaming resorts as theyarveled at the millions of dollars of Dale Chihuly chandeliers, walked on marble throughout the property, and complimented the rich appointments, including coffered ceilings and lots of arches.

You have brought Las Vegas to Atlantic City -- and Las Vegas in Atlantic City looks a lot better than it does in Nevada -- City Council President Craig Callaway told Borgata co-owners Boyd Gaming and MGM Mirage, both of Las Vegas.

Borgata features 2,002 hotel rooms, a 125,000-square-foot casino with 145 gaming tables and 3,650 slot machines, parking for 7,100 cars, 11 restaurants, 11 shops, a 1,000-seat theater, and a 2,400-seat event center.

As beautiful as Borgata is, it's the numerous small touches that set the casino hotel apart from any other. Every slot machine has a footrest, movies play in the elevators, the blackjack tables have air curtains to protect dealers from secondhand smoke, every shower stall has a marble bench and can accommodate two comfortably.

On the outside, Borgata is a shimmering 43-story oval tower of gold glass. Even at night, Borgata sets itself apart with bands of purple lighting and flashing marquee.

"I've said before that if you take a few minarets off one and a few statues off another, pretty soon all the other places here look like Sears Roebuck warehouses. This is the new paradigm," MGM Mirage Chairman and CEO Terry Lanni said.

Borgata had to make some quick adjustments to accommodate the flood of patrons. It began absorbing the $3 state parking fee when traffic backed up 45 minutes in the parking garage. Two days after opening it barred children from the premises unless they were with registered hotel guests.

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As New Jersey legislators worked overtime to agree on a balanced state budget, they passed a casino-tax bill that left most Atlantic City gaming operators speechless.

The multipronged bill hits casinos, gamblers and slot-machine suppliers in a variety of ways:

7.5 percent tax on last yearâs net profit for three years, giving the state a minimum of $18 million per year.

4.25 percent tax on the value of casino complimentaries, with every free hotel room valued at $67 dollars and adjusted annually to achieve a total industry tax payment of $26 million.

$3 surcharge on every occupied casino hotel room, whether customers are comped or pay cash. This is expected to raise $14 million for the state.

$1 increase in the state casino parking fee, to $3. Casinos no longer keep 50 cents per car for administrative costs. The state expects to raise an extra $18 million.

An 8 percent tax on lease payments to the suppliers of multicasino progressive jackpot systems, also called the ãIGT tax. Expected state proceeds $10 million. As an offset, IGT and other suppliers can charge fees based on a percentage of revenue instead of a flat fee.

Casinos have to pay the 8 percent gaming-revenue tax on gambling debts they do not expect to collect. Expected state proceeds: $1.7 million.

The plan benefits unprofitable or barely profitable casinos, which have to pay only a $350,000 minimum on the net-profits tax. The entire tax plan would cost the three Trump casinos a combined $9.5 million the same as Bally's alone.

The Casino Association of New Jersey, which represents every Atlantic City casino, declined comment.

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Atlantic City casinos won a June-record $382.5 million from gamblers last month, a gain of 2.6 percent over the same period last year.

Most of the improvement came from better luck from the tables, where casinos kept 16.8 percent of the money bet compared to a more typical 15.4 percent a year earlier.

Slot-machine revenue, the best barometer of demand in Atlantic City, increased 1.2 percent to $285 million.

Showboat, benefiting from a 544-room hotel tower that opened in May, reported the biggest percentage gain in revenue, up 9.2 percent to $34.5 million. Trump Taj Mahal, benefiting from a big swing of good luck at the tables, was right behind at 9.1 percent.

Bally's topped the revenue list at $60.9 million, up 5.3 percent.

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Some 2.5 months after MGM Mirage beat out Trump Hotels & Casino Resorts to manage the planned slot machines at Aqueduct racetrack in New York City, Donald Trump attacked the idea of racetrack slots in a New York Times full-page ad.

Beneath a giant black-and-white photo of a smiling Al Capone, Trump said a state investigation of Aqueduct's owner, the New York Racing Association, shows that it cannot be trusted to operate slot machines. The report found "rampant criminal activity" at NYRA's three tracks.

"What more could a gangster ask for," Trump said in the ad.

The ad isn't sour grapes, Trump said in an interview, but an attempt to avoid having a criminal enterprise in his home state.

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