GOMES GAMING | News |
GamingToday.com - August 24, 2010
Gomes May Jump-Start Ailing City
This could be the start of something very big in Atlantic City. The plan of Dennis Gomes and his team to acquire Resorts Atlantic City appears to put them at the right time and place to touch off a chain reaction that could speed the return of this well-worn city on the ocean to good health.
Resorts International is where the "Atlantic City experiment" began in May of 1978, a time when gamblers lined up down the boardwalk just for the chance to get in the door. The casino generated revenue faster than it could be counted. Officials bagged the cash and threw it in a vault, paying whatever fines were associated with the delayed count.
Doing business in Atlantic City was a lot more interesting than watching paint dry.
Steve Wynn tells of flying into Atlantic City from Florida, going to Resorts and standing at the top step at the door to the casino. The mass of people before him was all the convincing he needed. He immediately began looking for the land on which he could put his own casino.
The bigger than life personalities of Wynn and Donald Trump and the early presence of Caesars Palace, a company that made success at the high end look easy, convinced the New York money markets that casinos and gambling represented an industry that merited their attention.
At the time Resorts opened in 1978, the Wall Street Journal covered Nevada gaming by sending its organized crime reporter on occasional swings through the state.
New Jersey was different. With a heavy-handed regulatory system that was slow to relax, the state’s new industry got the instant respect skeptics were reluctant to give Nevada.
But the good times have been washed away as competition boomed and a recession loomed.
What Atlantic City has lacked until now is a catalyst – a set of circumstances that encourages investment and blows away the pessimism that has characterized so much of local thinking over the past couple years as local leaders complained about competition, sounding like the victims of a siege.
Gomes has increased revenue wherever he’s been over 30-plus years, and in this case he can begin doing business just as soon as he gets approval from regulatory officials. He does not have to wait a year or two for something to be built.
Not that Resorts Atlantic City is the newest or the nicest of Atlantic City casinos. It is neither of those but it has a good location on the Boardwalk and a history that is easy to market.
Resorts was where the excitement of a renaissance was launched in 1978 and it could be where the excitement begins again.
What Gomes needs to do is define success with even modest goals and then meet them. He is not a Carl Icahn, an owner content to spend very little on any kind of rehab as he waits for someone to stop by and offer more than he paid.
The Trump casinos are out of bankruptcy again and in the hands of a new owner who looks toward the future with apprehension and the realization that he has a big challenge on his hands. Good luck to him.
As for Boyd at the Borgata and Harrah’s at its several properties, they’ll probably want to applaud the arrival of Gomes at Resorts and the new ownership at Trump. They will benefit from anyone who can jumpstart the kind of activity that encourages interest in Atlantic City.
Gomes at Resorts may provide the kind of interest that will bring new attention and new money to Atlantic City from the investment community. Gomes does not have to set records to create the kind of interest that may have developers and the sources of money turning up the fire under plans that have been sitting on the shelf.
We witnessed a similar kind of happening in Las Vegas several years ago as developers began bidding up the prices of real estate to levels that had supposedly hard-headed analysts shaking their hard heads.
I remember the disbelief in MGM Resorts International's (MGM) CEO Jim Murren’s tone as he noted that the Las Vegas Tropicana was being sold for a price that put a value of more than $30 million on each of its 34 acres. The Frontier property went for about $1.2 billion.
The point being, it takes a very short time for a successful idea to be imitated in some form by companies and individuals who see themselves as major players in the gaming industry.
August 24, 2010 7:09 AM by Phil Hevener
<<Back to News