Atlantic City: We’re Back!
The contrast between the openings of the two new Atlantic City casinos, which both debuted on Thursday, June 28, could not have been more stark. Do they openings reflect the expectations from both casinos?
The Hard Rock casino held a press conference attended by several hundred members of the media. It was followed by a “guitar-smashing” ceremony—a Hard Rock tradition—that included nearly two dozen participants and Bruce Springsteen’s drummer, Max Weinberg inside the Etess Arena, the hotels main entertainment venue. And it was just part of an entertainment extravaganza that included choreographed dancers, fire-eaters, acrobats, giant aliens, beautiful showgirls and much more, ending in a balloon and confetti drop. Speakers included half-a-dozen officials of the Seminole tribe, the Atlantic City mayor, several Hard Rock executives, and others.
“We are amazingly excited about the opening of the Hard Rock here in Atlantic City, and not just this building, but truly a bridge to the revitalization of Atlantic City,” said Jim Allen, chairman and CEO of Seminole Hard Rock Entertainment, at the press conference. “Atlantic City is still the second-largest gaming market in the United States, with almost 30 million people within a three-hour drive. We believe this project will create a new renaissance, with the excitement of Atlantic City going back to being one of the great entertainment cities in the United States.
“We have spent over $500 million in renovating this building, and you may recall when we first purchased this building, we promised we would not just paint it and put a guitar on the wall. How do you think we did?”
“So many exciting things have happened here on the Atlantic City beach and Boardwalk. When you look at the Jersey shore and how successful it has been the last 10 years, Atlantic City is going to take the next step, and our project, we believe, is going to be the catalyst for that.”
Allen also noted that the Hard Rock launches with zero debt, having been funded internally by the Seminole tribe, and added that its operating company, Seminole Hard Rock Entertainment, has achieved an investment-grade rating from all the major Wall Street investment firms. “In the history of gaming, there is no other organization that has achieved an investment-grade rating simultaneously from Moody’s, Standard & Poors and Fitch,” he said. “That’s what we represent… This is a financially sound project.”
Allen stressed that Seminole Hard Rock, with 75 branded properties around the world, is an entertainment company, not a gaming company, and that will be reflected in the Atlantic City property. “Last year, Hard Rock did over 35,000 live music events, whether it be Jay-Z and Beyoncé and U2 in Hard Rock Stadium, or just someone with a guitar in a Hard Rock Cafe in one of the smaller markets.”
At the kickoff ceremony culminating in the “guitar smash” tradition, Allen reiterated his faith in the revival of the Atlantic City market. “We believe in Atlantic City, we believe in the state of New Jersey, and we truly believe that Atlantic City’s best days are in front of it,” he said. “People thought it was a little bit crazy when we said we were going to come to Atlantic City six or seven years ago. We looked at opportunities, and formed our partnership with (local investors) Jack Morris and the Jingoli family, and we were able to purchase this legendary building… Our contractors and design teams have been working around the clock.”
He also praised the project owners, the Seminole Tribe, which opened its first gaming property in 1979, crediting the tribe with leading the way in Native American gaming to the point where tribal casinos earned more revenue last year than commercial properties.
Finally, Allen gave a nod to the Ocean Resort, opening the same day two doors away. “I love when there are 1,400 beautiful rooms next door,” he said. “We thank the other casinos in town for being so warm and welcoming. This is a business opportunity; it’s not just a party. This is about Atlantic City, which lost four casinos, with unemployment approaching 20 percent. We’ve hired almost 4,000 permanent jobs, we created 2,000 construction jobs. The ripple effect to all the members of the community is amazing.”
That included the unions, he said, in reference to the infamous labor battles that culminated in Carl Icahn closing down the Taj Mahal rather than dealing with demands for a union contract. “We didn’t see one negative story about Hard Rock and our relationships with the unions,” he said. “We embrace them, we said we want to work together, and that’s been part of our success.” And the local residents as well—Allen was the first CEO to hold community meetings ahead of a project launch; he held three.
The chairman of the Seminole Tribe, Marcellus Osceola Jr., echoed Allen’s sentiments. “We’re doing this because it’s a business opportunity and a chance for us to expand, but what it means to the city, what it means to New Jersey… Our logo says ‘We love all, we serve all,’ and we mean that. I want to say thank you to the employees. We appreciate your service to us.”
The guitar smash ceremony—executives and officials on stage simultaneously smashing guitars, Pete Townshend-style, to launch a new property—was conducted with flair by top officials of the Seminole Tribe of Florida and of Hard Rock Entertainment. As per tradition, Hard Rock Employee No. 1, 72-year-old Rita Gilliam, who helped open the original Hard Rock Cafe in London in 1971, served as emcee of the guitar-smashing ritual.
The Ocean Resort Casino, on the other hand, seemed to be a last-minute decision, with owner Bruce Deifik surrounded by friends and executives in the new stairway leading to the resort (which replaced a former wall that discouraged Boardwalk visitation). The one saving grace for Ocean was the appearance of Mark Wahlberg, who is opening his family’s hamburger stand inside the resort in a month or so. Deifik showed some raw emotion when introducing friends and family, along with Division of Gaming Enforcement Director Dave Rebuck, who called Deifik a “real man, not a corporation.”
“I’m not sure the Boardwalk has ever been this busy on this side of town, but that’s about to change in a big way,” Deifik said at the ribbon-cutting.” Among the dignitaries helping with the ribbon-cutting was state Senator Chris Brown, who presented Deifik with a commendation on behalf of Governor Phil Murphy. “We have over 3,500 families here in Atlantic County who are back to work, thanks to you and your beautiful family,” he said.
Rebuck, Whom Deifik called “an extremely confident, ethical moral individual,” also expressed appreciation on behalf of New Jersey, and contrasted the past failures of the property with the Deifik family. “We were committed to getting this property open for the summer, and why I know it’s going to be successful in the future is because of the Deifik family… This man has heart. He’s not a corporate person; he has heart, he has emotion. His entire family is committed to seeing this property successful.”
A quick ribbon cutting and the property was open.
Both casinos had been cleared to begin operations by the New Jersey Division of Gaming Enforcement the day before their scheduled openings after conducting “soft-play” tests earlier in the week and both moved quickly to open their doors.
Rebuck said Hard Rock was cleared for full operations as of 3 p.m. and Ocean Resort as of 5:45 p.m. June 27. Both properties then quickly opened their doors to gamblers.
“I am holding the certificate in my hand, and I couldn’t be happier,” Deifik told the Associated Press.
“We are open for business and everyone is welcome right now,” added Frank Leone, the casino’s CEO.
The Hard Rock also debuted ahead of schedule.
“People are already coming through the doors,” Todd Moyer, Hard Rock’s senior vice president of marketing, a day before the opening. “Our official grand opening is tomorrow and we are still working toward it, but the heavy lifting has been done. I liken it to Extreme Makeover: Home Edition on cable, where the things they get done in the last few hours are amazing.”
The two casinos have invigorated Atlantic City’s job market returning almost 7,000 of the 11,000 jobs that were lost when five casinos in the resort shut down starting in 2014. Both of the new casinos, however, are refurbishments and renovations of casinos that closed during those shutdowns.
The Hard Rock casino is the former Trump Taj Mahal casino, opened by now-President Donald Trump in 1990. The casino faced several bankruptcies in its history, but in a 2014 bankruptcy the property teetered on closing until it was bought by billionaire Carl Icahn.
Icahn, however, despite pumping cash into the property, could not keep it open and became involved in a bitter labor dispute with the city’s main casino union. He closed the Taj in 2016—saying he had lost $100 million trying to run the property—and then sold it to Hard Rock for $50 million in 2017.
Hard Rock has since spent about $500 million to refurbish the property and totally remove any signs of the casino’s former Indian theme.
The Ocean Resort is the former Revel casino, one of the most spectacular casino flops in Atlantic City’s history. The more than $2 billion Revel opened in 2012 after a long battle to secure financing.
From the start, the casinos was seen as making strategic marketing mistakes for the resort by focusing almost exclusively on high rollers and presenting itself as a high-end destination resort, but still not rewarding players at the same level that other properties did. Revel was also criticized for having a confusing layout and not being player friendly. The facility never turned a profit and was also burdened by massive debt.
The casinos filed for bankruptcy in 2013 and was eventually closed in 2014. The property was bought out of bankruptcy by Florida developer Glenn Straub for $82 million. Straub then embarked on an eccentric and often convoluted effort to re-open the property which included a fight over ownership of the facility’s heating and water plant as well as several lawsuits against the New Jersey Casino Control Commission over casino licensing for the property.
Despite announcing several opening dates for the property, Straub was never able to re-open it and sold it in January to a Colorado-based development group led by Deifik. Deifik has said the group has spent about $200 million on the property and addressed many of the complaints against the former Revel. However some of the major flaws, such as the inability to reach the casino floor via the hotel elevator, remained issues.
Many analysts fear that the re-opening of two major casinos could dilute the city’s casino market again and lead to more casino closures. Though casino revenue is down in the city through the first five months of 2018, the city’s market has been able to thrive with just seven casinos and most have turned a profit.
The key to whether the openings will revitalize the city will probably revolve around both properties ability to draw in new customers with other amenities besides casino gaming.
Towards that end, The Hard Rock is banking heavily on entertainment and has announced an ambitious schedule to offer live music for 365 consecutive days. The casino held a concert by Carrie Underwood for its grand opening at its 7,000-seat Etess Arena, but the schedule also includes smaller concerts at five different venues within the property. Rapper Pitbull also performed at the casino’s opening weekend.
Hard Rock is also opening a nightclub and comedy club—the first hosted by comedian Howie Mandel—and about 20 restaurants, including reviving the Taj’s Robert’s Steakhouse, a long-time favorite in the resort (and named after Donald Trump’s brother).
The casino also plans to offer online gambling in the state. Hard Rock, however, has not opened with a sports book, but casino officials have said they are seriously studying the issue. The Hard Rock features 2,000 hotel rooms, 2,100 slots and 120 table games.
Ocean Resort has also made a major commitment to entertainment and dining, also returning several restaurants which managed to thrive at the Revel despite the casino’s problems. The property is also launching new offerings such as a Walburgers and the unique Cereal Town that will offer cereal 24/7.
Also returning is Royal Jelly, a rock and roll burlesque club and the successful HQ Nightclub. Deifik has told regulators that he has renegotiated contracts with most of the property’s returning entertainment venues to better benefit the overall property.
The property has also opened with a sports book through a partnership with William Hill, though the casino has opened with a temporary sports book in place as it works to complete its main sports betting lounge. The casino also plans to open a live poker room.
The casino has also partnered with GAN, which runs Belfair online casino gaming for Golden Nugget Atlantic City, and expects to offer online gaming July 1. The hotel features 1,399 rooms, a 138,000-square-foot-casino, six swimming pools and a luxury golf franchise.
The two openings also came on a big weekend in the resort due to both the July 4th holiday and a scheduled public beach concert by country artist Sam Hunt. City police estimated that between 700,000 to 1 million people could visit the resort over the weekend, according to local media.
Also, the Showboat, the former casino between Ocean Resort and Hard Rock that has been operating as a non-gambling hotel since July 2016, announced it will open all 1,331 of its hotel rooms starting June 28. It had been operating with just 852 available rooms.
While the hotel does not offer casino gaming, officials said they are embracing the re-openings and adding several attractions of their own including new restaurants, a fitness center, an indoor arcade and an expansion of its indoor laser miniature golf course.
Atlantic City Mayor Frank Gilliam was a prominent speaker at both product launches. “This is truly a monumental moment for Atlantic City,” he said at the Ocean ribbon cutting. “Not only are we opening one, but we are opening two casinos in one day, ushering in a new era for Atlantic City. We have partners committed to the community.”