Atlantic City, you must be so proud. Mayor Marty Small (D), recently re-elected, beat the rap on felony charges this week. The indictment against Mrs. Small is expected to be dropped. Too bad. Small had a big chance of joining the not-so-illustrious list of A.C. mayors who have gone to the slammer. Meanwhile, Boardwalk power brokers are spin-doctoring like mad that November’s casino grosses weren’t so bad (for most of the gambling houses) and that Atlantic City is still relevant in light of three oncoming New York City megaresorts. The argument is that NYC can’t duplicate what the Boardwalk has to offer. What would that be? Cigarette smoke?
Small’s puppet regime looks to continue unabated. Politicians in Trenton are proposing to renew state control of Atlantic City’s finances through 2032. Amazingly, Small is in favor of this. You might call it ‘thinking Small.’
Perhaps Atlantic Citizens should be more worried about the renewed clamor to quick-fix the problem by putting slots in a box at the Meadowlands, home of two of the NFL‘s worst teams. This has been voted down before but the political dynamic appears to have shifted. As our Boardwalk correspondent explains, “New Jersey is more like two states than one. North Jersey has a much higher population and influence than South Jersey. Local (North Jersey) politicians from both parties want two casinos in North Jersey, at the Meadowlands (Hard Rock International) and Monmouth Park. Comments include: ‘slot machines should be allowed at the two (horse race) tracks.’ If the new New York casinos don’t cause some A.C. casinos to fail, any North Jersey casinos will do that.” Interesting that Hard Rock is willing to sacrifice Hard Rock Atlantic City (which has the best hotel occupancy of any casino, at 93%) twice over: First, to be part of Steve Cohen‘s Metropolitan Park. Second, to have gambling at the Meadowlands. One sure as hell doesn’t go there for the football.
General Manager Tom Pohlman (above) must be doing quite an adroit juggling act at the Golden Nugget. It actually improved gross operating profit in the third quarter, despite having the lowest room rate ($132) and the least occupancy (66%). Only Borgata and Ocean Casino Resort also improved their GOP. Meanwhile, money-losing Bally’s Atlantic City is trying to make ends meet by throwing a New Year’s Eve bash for which there will be (apparently) no free drinks. Says our man, “Bet there’s a cash bar or two at the dancing-and-dessert event.” How are you going to get people to gamble if you don’t lubricate them? On the other hand, both it and Bally’s Dover have been giving out free chainsaws. (“Are these useful to defend yourself against other Bally’s customers?“) That’s holly jolly holiday spirit.
Speaking of Bally’s … Chairman and de facto CEO Soo Kim has been wreaking havoc Down Under. Kim and prexy George Papanier (he of the autopen) will be trying to run Star Entertainment from halfway around the globe. Kim is in the process of sacking Star’s entire corporate structure, siloing the company into casino-by-casino management. According to Inside Asian Gaming, Kim “warned that jobs are on the line as he looks to find a more sustainable path forward for the embattled Australian operator.” You can’t cut your way to profitability (it’s called a death-spiral business model) but don’t tell that old Soo.
Ranted Kim, “Corporate has gone from 600 to 1,100 jobs in the last five years, which runs contrary to business finance, but is also a regulatory mandate. There are no sacred cows and even the notion that we have a corporate office has to be examined.” Yeah, let’s run casinos in Australia from clear across the International Date Line in Rhode Island. Can’t imagine any problems with that. The corporate carnage includes driving out four board members and a CEO. That leaves Kim, Papanier and Bruce Mathieson Jr. to run things. Kim talks a good game about turning Star around but it sounds like he’s begun by decapitating it, hardly the most promising start. By the way, where is alleged Bally’s CEO Robeson Reeves in all of this? Exiled to Intralot, apparently.
Speaking of unpromising beginnings … Boyd Gaming may have a Virginia flop on its hands. In its first 23 days, it brought home a slender $1.5 million. Heck, we cover slot parlors in the Cavalier State that outgross Boyd regularly and they only offer ‘historical horse racing’ devices, which are parimutuel. What’s worse, nearby rival Rivers Portsmouth made $28 million last month. Somehow, 132 slots in a quonset hut named “Interim Gaming Hall” lacks curb appeal. For Boyd’s sake, we hope the eventual, permanent casino has more cachet.