New Resorts owner: All ailing casino needs is love
ATLANTIC CITY, N.J. (AP) – Asked about his plans to save Resorts Atlantic City, the first casino in the United States to open outside Nevada, new owner Dennis Gomes briefly touches on spruced up hotel rooms, guest suites and a snazzier casino floor.
But what the place really needs, he says, is a whole lotta love, with some positive spiritual energy thrown in.
Despite his buttoned-down appearance, Gomes is not your typical casino executive.
“There’s something in the martial arts called ‘chi,’ the life energy that guides you … I think I give energy,” said Gomes, a veteran casino executive who got approval on Wednesday to buy the struggling casino with partner Morris Bailey for the fire-sale price of $31.5 million from lenders who had taken it over a year ago.
“I think love is the most powerful force in the universe. If you do everything from love, you can tap into that energy,” he told the Casino Control Commission, drawing big laughs by adding, “those Wall Street guys hate that.”
In his 30-plus years as a casino executive and regulator – his tenure as Nevada’s top casino corruption investigator was chronicled in the 1995 Martin Scorsese film “Casino” – Gomes has marched to the tune of a different drummer.
As head of Atlantic City’s Tropicana Casino and Resort, he pitted a tic-tac-toe-playing chicken against customers, and used billboards of Fidel Castro to hype a Cuban-themed shopping and dining mall.
To promote the opening of an Indiana racetrack casino, he hired a Barack Obama lookalike who pitched the gambling hall as a fiscal stimulus package, knowing the White House would object and generate free publicity.
But his latest challenge will be his biggest. The purchase of Resorts from a consortium of lenders is due to be finalized on Monday.
At 6 a.m. Tuesday, Gomes will be at his desk in the casino, starting work on promised upgrades to hotel rooms, new restaurants, the addition of suites on the top floor of the casino’s second hotel tower, and sexy 1920s-style flapper costumes for female employees.
He’s re-branding the casino with a roaring ’20s theme, in part to capitalize on the popularity of “Boardwalk Empire,” the hit HBO show about Prohibition-era Atlantic City. Highlights include a strolling violinist in a zoot suit, and a singing bartender “who can sit at the bar and sing in this angelic voice and mix drinks and make change and never miss a beat and never get out of tune.”
Those changes will come around New Year’s Eve; of more immediate concern is putting more people into more hotel rooms and getting them to spend more money at Resorts.
The casino reported a gross operating loss of $2.9 million for the third quarter compared with a gross operating profit of $706,000 a year ago. The casino took in an average of $446,011 a day in October, ranking it 10th out of Atlantic City’s 11 casinos. By comparison, the city’s top-earning casino, the Borgata Hotel Casino & Spa averaged more than $1.8 million a day the same month.
For the first 10 months of this year, Resorts has taken in $135.5 million, down 18.2 percent from the same period last year.
Gomes says the 942-room Resorts needs to immediately increase its hotel occupancy rate, which is averaging 65 percent compared to the citywide average of 85 percent. By concentrating on midweek convention and meeting business, Resorts should be able to show quick results in raising that number and increasing its overall revenues by spring, he said.
He said he has already heard from people interested in opening restaurants, a sports bar and a new nightclub at Resorts.
Of course, New Jersey regulators heard those same promises from Resorts’ prior owners, Los Angeles hedge fund Colony Capital LLC, when they got their last license renewal in January 2008.
Why, they asked Gomes, should we believe you?
“We’re committed that we’re going to make capital improvements,” Gomes told them. “You have our word. It’s going to happen.”
For that to happen, his partner Bailey will have to write some checks. The New York developer is the money behind the Resorts deal. A man who started out delivering newspapers in Atlantic City as a child, he became rich buying Burger King franchises in New Jersey (he once had 52 of them), before branching out to the hotel business.
His New York holdings once included Halloran House (now the Marriott East Side) and the Grand Bay Hotel, along with real estate holdings in Montreal and Scottsdale, Ariz.
“I’m bringing financial stability,” Bailey said. He’s also bringing $10 million in cash to keep the casino operating after the ownership switch happens, and an additional $10 million for capital expenses.
Gomes and Bailey project that Resorts will turn a profit in 2011 – even as the Atlantic City market continues to struggle. They base their optimism on plans to hire new player development executives, sponsor slot tournaments, and increase room comps, according to paperwork filed with the state Division of Gaming Enforcement.
Resorts has long catered to elderly gamblers who ride the bus here to play slots for a few hours, eat at a buffet and then go home the same day. But Gomes says the casino must adopt Atlantic City’s mantra of offering more non-gambling attractions in order to survive.
“It’s not about gambling anymore,” he said. “The convenience gamblers are gone. You need to create other things for people to do. Resorts is going to embody a lot of those things.”