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Gaming Guru

Joe Weinert

Atlantic City Weekly Round-Up

29 April 2002

ATLANTIC CITY -- Atlantic City's Sands Casino Hotel, once a haven for high-rolling blackjack and baccarat players, is ditching more than half of its table games in a radical move to stem a decade-long profitability skid.

President Herb Wolfe, hired by majority owner Carl Icahn last month, is scrapping 43 table games, which will leave Sands with a mere 28 traditional gaming tables, plus 10 poker tables. Even the city's smallest casino, Claridge, has twice that many tables.

In place of the discarded tables, Sands will install 400 slot machines. As many as 150 Sands employees could lose their jobs as a result.

"We're looking at realigning the casino to make ourselves more profitable. That involves taking tables off the floor," Wolfe said.

Wolfe's decision is surprising only in that it's being done in one big step. The table-games business has been stagnant in Atlantic City since 1988, hovering at around $1.1 billion in revenue each year. The number of tables citywide since 1997 declined by 226, to 1,247 at the end of last year.


Facing a mountain of junk-bond debt that begins to mature in one year, Donald Trump's casino company is shopping a $470 million bond offering to institutional investors.

Trump Hotels & Casino Resorts said the proceeds would be used to pay off $431 million in various carried by the company's Trump Marina and Trump Indiana casinos. It appears there would be about $24 million left over for capital improvements.

Whether investors bite remains to be seen. Trump angered existing bondholders last fall, when he withheld interest payments until the holders agreed to new terms. Trump blinked, paying up before defaulting.

Trump Hotels announced the bond offering at the same time it reported glowing first-quarter results. Earnings before interest, taxes, depreciation and amortization increased 46 percent, to $74.1 million, on net revenue of $301.2 million, up 7 percent.

The company's net loss narrowed to $4.6 million, or 21 cents per diluted share, from $16.9 million, or 77 cents, a year earlier. "This is from a year-and-a-half of really great work from a great management team," Trump said. "We feel this company has really turned around dramatically."


While planning for a formal announcement in Las Vegas later in May, Park Place Entertainment disclosed that it will be closing the Ocean One shopping pier to make room for a junior version of the Forum Shops.

Caesars Atlantic City, which owns the second-tier mall, informed the 100-plus merchants that they must vacate by year. Almost immediately, retail developer Gordon Groups Holdings will begin a nearly $100 million remodeling of the pier, which now resembles an ocean liner. The Gordon Group, which codeveloped the Forum Shops, will be responsible for redeveloping and operating the new shopping, dining and entertainment complex. It's expected to open in spring 2004.

The project won't cost Park Place a dime, except for perhaps the cost of building a bridge over the famed Boardwalk that would connect Caesars and the pier.

"I can assure you this will be far from just a new paint job," said Wally Barr, Park Place's chief operating officer. "This will be a major renovation to the existing Ocean One mall, which will also have a very dramatic improvement to the retail product as well as the entertainment product that's offered on the pier. It will be a true entertainment-retail experience."

The pier, Barr said, will be a powerful answer to development in the city's Marina District, where the $1 billion Borgata is scheduled to open next summer and where Harrah's is spending $200 million on a lavish expansion. The pier will serve Park Place's three center-Boardwalk casinos -- Caesars, Bally's and Claridge -- all of which are connected.


Resorts Atlantic City joined the parade of casino operators reporting big gains in first-quarter earnings. Cash flow at the relatively small, independent casino grew 61 percent, to $7.4 million, on net revenue of $61.8 million, up 8 percent.

Five of the city's six casino operators have reported their first-quarter results, with the cash flow increases from Atlantic City operations ranging from 13 percent for Harrah's Entertainment to 61 percent for Resorts.

0-0-0-0-0 The Casino Control Commission ruled that two former Trump employees who operated a sports-betting ring in the workplace can no longer set foot inside any Atlantic City casino.

Tri Van Nguyen and Henry Kim Wong became the 152nd and 153rd names on the Exclusion List. Nguyen was a dealer and floorperson at Trump Taj Mahal. Wong was a waiter at Trump Marina.

Both men pled guilty in August 2000 to promoting gambling; Nguyen also pled guilty to possession of gambling records.


Atlantic City's closest casino competition reported a 7.1 percent gain in slot-machine revenue during the five-week March reporting period. Slot revenue at the three Delaware racetracks was $56.2 million.