Good year for Atlantic City

Boardwalker boosters like Glenn Straub who says Atlantic City‘s still got plenty of life in it can point to today’s headlines: The city’s casinos increased their operating profit last year by 45%. Unless you count the defunct Revel (-$48.5 million) and Trump Plaza (-$13 million), only one casino finished in the red. It was — you guessed it — Trump Taj Mahal, where bungling CEO Bob Griffin turned 2013’s $20 million profit into a $1 million loss. Heck, even the Showboat, before Gary Loveman smothered it in the crib, posted a $13 million profit. Caesars Interactive managed to lose that money right back, registering a $12.5 million deficit. While the three remaining Caesars Entertainment casinos saw profitability tighten, most particularly at Bally’s Wild Wild West, all were safely (?) in the black.

The slimmest profit was Resorts Atlantic City‘s $2.5 million, a long distance from Borgata‘s phat $158.5 million or even Harrah’s Resort‘s handsome $97 million. A 3% increase in hotel occupancy and 1% growth in ADRs didn’t hurt, either. There are two contradictory but valid ways of interpreting this data. One is that the market has stabilized and even has room for new competition. The other is that Atlantic City has finally ‘rightsized’ and needs more casinos like it needs a hole in the hole in the head. Arguing for the latter viewpoint, Golden Nugget General Manager Tom Pohlman said, “The numbers speak for themselves.” (Easy to say that when you’re sitting atop a 144% increase in operating profit and vacuuming up customers from dead casinos.)

* Speaking of Revel, it has a new name. As of today, it’s Polo North. I’m not sure that isn’t a case of a change being mistaken for progress. One associates polo neither with mass appeal nor with pulling slot handles in lieu of swinging polo mallets. Straub’s proposed capex
investment has escalated to $150 million, as he plans add a water park and build the originally planned second hotel tower to house his projected global problem-solving university. And if you thought that Straub’s $500 million budget for a whale of Atlantic City infrastructure and amusement projects seemed inadequate to the task**, you were right: “$500 million is not enough,” Straub admitted, after saying, “I think everybody else will see what we’re going to spend here and they are going to spend five times more than what we’re going to spend.” That’s quite a burden of expectations.

Straub, with customary Delphic obscurity, said only that conflicts with Revel’s tenants were “all wrapped up.” If that’s truly behind him, Job One becomes getting a gaming license. Meanwhile, his purchase of the Showboat turns out to be in abeyance, a contingency plan unless Caesars and Stockton University can’t resolve Trump Entertainment Resorts‘ obstructionism.

(** — Straub’s grand vision is described as including “the redevelopment of Bader Field and the construction of an extreme sports complex, two marinas capable of hosting ‘super yachts,’ an equestrian facility, waterparks and two universities, as well as high-speed ferries and helicopters between Atlantic City and Manhattan. The project also includes a medical complex, independent living facilities and an entertainment hub.” Nope, no way $500 million buys all that.)