Hard Rock and Ocean Resort: Two much?

“If Ocean Resort opens up and has the same difficulty as Revel did last time, do they get desperate and start throwing marketing money at the wall, and make everyone else have to do it, and margins go down, and make it tough for everyone to survive?” That’s peppery gaming analyst Larry Klatzkin, worrying about the impact of two new megaresorts on a newly rightsized Atlantic City market. The concern of the moment seems to be that Ocean Resort and Hard Rock Atlantic City could be Two Much of a Good Thing. “I think Hard Rock will be very additive to the market; perhaps [Ocean Resort] will be as well,” says Deutsche Bank Securities‘ Andrew Zarnett, one of the savviest of gaming analysts. Ocean owner Bruce Deifik has certainly learned from his predecessors’ mistakes: He’s concentrated the gaming floor and added a buffet. He also, thanks to Glenn Straub, won’t have to pay external power bills anymore. Ocean Resort owns its power plant. Hard Rock enjoys no such luxury, though it has added a gas station, car wash and convenience store to the former Trump Taj Mahal area.

“It’s no good for Atlantic City to have one or two superstars, and everybody else struggle,” adds Hard Rock International CEO James Allen. That could be the case if Bart Blatstein gets into the act and reopens the Showboat‘s casino. That seems to be a real fear although I’ve yet to see an explanation of how Blatstein would get around Caesars Entertainment‘s removal of the Showboat’s gaming entitlement (a key element in closing the property). For the time being, Allen is taking a mellow view of Deifik’s decision to piggyback onto Hard Rock’s June 28 opening: “I think they’re very smart to try to open as close to us,” Allen said. “I certainly know and I’m sure they know that we’re going to create tremendous media attention so if they want to ride that wave, we think that’s great for Atlantic City. We love that there’s going to be 1,500 rooms two doors down from us.” He also ruled out the dreaded ‘soft opening,’ vowing, “To open on any partial basis is not an option for Hard Rock.”

Since gambling is ubiquitous in Atlantic City, it’s no coincidence that Hard Rock is leading with entertainment, booking 300 events in Year One. “No one in Atlantic City and no one in Las Vegas has ever committed to 300 performances and that speaks to the strength of our brand,” Allen told the New Jersey Casino Control Commission. According to one news story, the party doesn’t stop in the two concert halls: “the hotel offers amenities like turntables and records, special playlists and the option to get a Fender delivered to your room for jam session.” The hoped-for ADR is $169/night (plus $15 resort fee — boo!) Allen probably doesn’t want to repeat what happened when Borgata opened, simply redistributing the existing market rather than growing it. For the moment, Hard Rock is accentuating the positive. General Manager Matt Harkness told regulators, “I can’t tell you how many people literally had tears in their eyes once we extended them job offers.”

At least one person is taking an upbeat view of the imminent growth pangs on the Boardwalk. “There is a lot of reason to hope that the reintroduction of two or even three casinos to Atlantic City may be a net positive for the resort,” said Rummy Pandit, a tourism boffin at Stockton University. “That is not to say that Atlantic City won’t experience some growing pains in the process. The pizza analogy is an accurate way of describing the situation facing Atlantic City: No matter how you slice it, if you don’t grow the pie, someone will go hungry.” Allen remains undaunted, telling regulators, “we made a commitment to making sure Atlantic City grows, so it was important to make sure guests got to come see something completely new and re-done.”

* As Newport Grand casino vacates its former jai-alai fronton, it has changed hands for the tidy sum of $10 million. Twin River Management Group is trading in its Newport site for one right on the Massachusetts border in Tiverton. It leaves behind a venue that hosted slots for 18 years and full casino gambling since 2008. The new ownership plans a mixed-use development sans gaming.