”In 1915 local architect Seward G. Dobbins presented a proposal to the City of Atlantic City to purchase land and construct an exhibition hall with adjoining apartments and retail stores. The purpose of the building was to position Atlantic City as a major convention city and develop a year-round industry.”1
The idea for what is referred to as Boardwalk Hall was introduced almost a century ago as a project to develop Atlantic City into a year-round resort destination. Irony comes in many forms, so it is fitting that this cornerstone project in May hosted the 17th Annual East Coast Gaming Congress and Hospitality Forum and the Atlantic City Hospitality Trade Show.
This is the second year the Atlantic City Hospitality Trade Show has partnered with the East Coast Gaming Congress. The broadening of the congress to include all segments of hospitality is a further testament to the success of this event, and it underscores the need to recognize the combined business model of the hospitality experience. This also emphasizes the diversification of the industry and reflects the educational aspect of this event. As Caesars Entertainment CEO Gary Loveman noted in his presentation while having some fun with the terms “gaming and non-gaming,” it is about the total experience.
Top industry leaders and executives from gaming and leisure joined the two-day event with members from the Wall Street community, regulatory agencies, vendors and a host of others to discuss the hospitality and gaming industry. The roots of this conference are embedded deep in the Atlantic City market. It is a great forum to benchmark the gaming and hospitality market regionally and take a temperature check on Atlantic City’s current condition.
One of the big takeaways from this year’s event was the deepening insight into what is happening with Internet gambling. New Jersey is one of three states to legalize online wagering, along with Nevada and Delaware. The topic of what it means for Atlantic City and beyond was certainly center stage.
Will it stimulate more visits to the host brick-and-mortar resort properties for the total experience? Or will it only further take away from the numbers of guests entering the city? It was generally recognized that Internet gambling in New Jersey could be the “key to the city” in terms of opening the door to continued stabilization of the Atlantic City market and also sparking future growth.
It was announced at the conference that Mario Galea from Random Consulting, a former gambling regulator from Malta, was selected to consult with New Jersey as it pushes ahead to be the first state to offer this initiative.
In May, the New Jersey Division of Gaming Enforcement released the first draft of its proposed rules for Internet Gambling Regulations, which will be open to comments and suggestions until Aug. 2. The current timeline for implementation in order to offer online betting this year through their Atlantic City-based property websites, is Nov 26. Division Director David Rebuck noted realistically that the state could see a more gradual roll-out between Thanksgiving and Christmas.
During the regulatory panel discussion, it was disclosed that New Jersey has already approached other states to possibly broker deals to create multi-state Powerball-type slot play once more states have been approved to host Internet gambling. The reference used was the recent huge Powerball jackpot that produced one winner in Florida but had multistate participation.
The technology already exists as seen on the gaming floor today with the mega jackpot slot machines. This could be adapted to include other licensed jurisdictions, thus expanding the network across state lines to offer huge jackpot awards providing enhanced revenue streams.
This could be the next big thing in Atlantic City’s economic recovery, and lottery officials at the congress also predicted that online gambling could spur tremendous growth in and throughout the gambling industry as it prepares for the next generation of gambler.
Loveman stated in his presentation that his company recognizes the expanding technically savvy customer base, and those customers will demand the convenience of Internet gambling. Caesars owns four of the 12 Atlantic City resorts.
Though Internet gambling was the hot topic, the discussion also turned local with discussion on the state of the Atlantic City recovery.
Stabilization was a key word used by some members of the Wall Street panel in reference to the current Atlantic City market’s seven-year decline. Contributing to this stabilization is the fact that there will not be a new casino in the Philadelphia market this year. In addition, new experiences are being added to Atlantic City, such as the $35 million Margaritaville complex at Resorts Casino Hotel, now operated by the Mohegan Tribal Gaming Authority. The complex, which opened in May, includes a Margaritaville-themed casino space, as well as related restaurants, bars and a retail store.
Commenting on the new Margaritaville experience at Resorts was Mitchell Etess, chief executive officer of the Mohegan Tribal Gaming Authority. According to Etess, the addition of the Margaritaville experience to Resorts is not about adding just another food and beverage outlet. “It’s about an attitude,” he said, referencing the style of the Margaritaville brand and its demographic base. He also praised partner Morris Bailey for his continued commitment to the property and Atlantic City.
Throughout the conference, several speakers and panel members commended Gov. Chris Christie’s current administration for the tremendous job he has done in supporting the industry in Atlantic City.
Tony Rodio, CEO of Tropicana Casino and Resort and current president of the Casino Association of New Jersey, said in his keynote address that Atlantic City is on the verge of a comeback.
Loveman echoed Rodio’s comments, saying: “The news is quite good in referencing the Atlantic City market. We’ve been through a difficult time. We are in a period where we can feel more optimistic.”
The return of the Miss America Pageant to the city is predicted to have a $32 million impact, and the continuation of other attractions, such as the Atlantic City Air Show, also supports the city, bringing millions to the bottom line annually.
Atlantic City is still trying to recover from inaccurate reporting by various national news organizations about the level of destruction from Hurricane Sandy that hit the New Jersey coast last fall. According to new research data from a national online poll commissioned by the Atlantic City Alliance: “15 percent of the adult U.S. population still believes that the famed Atlantic City Boardwalk was damaged due to Super Storm Sandy. Since Super Storm Sandy, media campaigns have been sending a focused message, trying to reverse the negative impact of the inaccurate reporting.”2
The poll was taken originally in November 2012. It showed that 41 percent of the American public believed the Boardwalk had been destroyed. New Jersey-based Russell Research conducted the studies.
As the topic of the newest property in Atlantic City, Revel, was sure to come up, there seemed to be a “wait and see” approach. Just coming out of bankruptcy, a revised business model in place and new marketing initiatives are just beginning, so it may be some time before the impact of these changes can be viewed.
The repositioning of Atlantic City in the marketplace has never been about just one thing. It is about the total hospitality experience. The customer experience is the market driver. This regional demographic base is as diverse as the products offered. The customers will judge their experiences on the variety of venues they visit, as well as their presentation. Each visitor will process their customer experience through their personal demographic viewpoint and make it their own. As the customer base takes ownership of their unique individual experiences, it will collectively generate that valued customer return visit.
This gaming congress convened at the right time and had the right topical discussions for identifying future paths. These meetings are about education through conversation, speaker forums and industry people connecting through the network.
I was also able to speak with Michael Pollock, managing director of Spectrum Gaming Group, a co-founder and co-producer of the event. Here is what he had to say:
Casino Enterprise Management: Assuming properties incorporate the right marketing strategies with Internet gambling, will it enhance visits?
Michael Pollock: The idea should be to use the Internet to identify players, “incent” them for their online play and market to them with offers to visit the property through the points that they earn online, as well as through special incentives. These are individuals with a proven willingness to gamble and who would be receptive to marketing messages. If used properly, Internet gaming in New Jersey can be an extraordinarily low-cost, effective means of getting the right message to the right person at the moment when they are particularly receptive to such messages.
CEM: Obviously as other states seek to add Internet gambling, it will no longer be unique to Atlantic City. Can you comment on any strategies that you could see developing to take this into consideration?
Pollock: Notably, the Atlantic City properties will have a long-term, perhaps even permanent, edge over competitors in other states, even when those states begin their own online offerings. That edge is in the capital investment in their properties and the full range of entertainment offerings. The basic thesis here is quite simple: If you put two offerings side by side and one of those offerings includes the opportunity to earn free visits to a regional destination, that offering—with all else being equal—will prove to be more popular. Hence, it will result in more online play, but also more land-based play.
CEM: Obviously New Jersey is in a prime spot to set some of the ground rules for Internet gaming going forward. The added publicity for Atlantic City is certainly a plus. Do you see any other positives for AC?
Pollock: If the operators execute properly on this opportunity—and I believe many, if not all of them, will—then this has the potential to be a catalyst for the industry in Atlantic City, which could result in more favorable publicity, as well as the possibility of more capital investment.