Atlantic City doubles down on casinos
Trump Taj Mahal Hotel and Casino in Atlantic City, New Jersey
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Tess Vigeland: While we're on the subject of facelifts, Atlantic City is in the middle of one.
It's lost a whole lot of business to tribal casinos up and down the East Coast. New slot parlors in Delaware and Pennsylvania got the blame for the first drop in revenues in Atlantic City since the 1970s.
But big casino operators aren't ready to fold just yet. This week, they agreed to keep subsidizing New Jersey's horse tracks as long as they don't install video slot machines.
And as Joel Rose tells us, some casinos are doubling down.
Joel Rose: When you hear the words Atlantic City, the first thing that comes to mind might be little old ladies arriving in town by bargain bus.
Larry Mullen wants you to think valet parking.
Larry Mullen: What you're looking at there is what will be the retail space into the front lobby and then all surrounding that area is indoor and outdoor pools. Look up to the 32nd floor...
Mullen is CEO of the Borgata, a hotel and casino in Atlantic City. He's looking up at the Water Club, a $400 million luxury hotel and spa at the Borgata that's set to open this summer. Mullen says it will have four swimming pools, a rooftop spa and zero slot machines in the lobby.
Mullen: It allows us to go out and reach out to a customer who has been rejecting the market. We think now with the amenities we can offer, it's on par with any destination.
Resort destinations like Las Vegas or, closer to home, Foxwoods in Connecticut, which bills itself as the largest casino complex in North America.
By one estimate, Atlantic City has $10 billion worth of new hotels and casinos in the pipeline. This may seem an unlikely time for a building boom, since overall revenues here were off more than 5 percent last year.
Michael Pollock: Atlantic City is evolving and growing not despite the fact that it's lost its monopoly, because it's lost its monopoly.
Gaming industry analyst Michael Pollock says new slots parlors in Delaware and Pennsylvania have lured away some loyal customers who used to make day trips to the Jersey Shore.
Pollock: So Atlantic City is following the business model of Las Vegas, in that it's going after a much broader demographic: affluent adults who have the two commodities casinos need, one being time and the other being money.
Atlantic City is also following Las Vegas's lead by tearing down and starting over. Last October, Pinnacle Entertainment imploded the old Sands Casino Hotel to make way for a new one on the boardwalk.
Casino operators here are betting more luxury hotel rooms and more entertainment options will continue to draw people like Terry Higgins.
She drove all the way up from Maryland's Eastern Shore to gamble at the Borgata, even though she could have stayed closer to home.
Terry Higgins: It's beautiful. It's clean. It's a gorgeous hotel. In Delaware, they don't have the hotels in the facilities with the slot machines.
Rose: Do you like the restaurants and stuff?
Higgins: Excellent restaurants. And there's none around our area, yeah.
The table may soon get even more crowded on the east coast, with Massachusetts talking about legalized gambling. That could draw business away from Foxwoods, the massive Connecticut casino owned by the Mashantucket Pequot tribe.
Gary Armentrout is president of the Foxwoods Development Company.
Gary Armentrout: It will have an immediate impact, but I think experience has shown that those patrons, perhaps introduced to gaming for the first time in a local casino, will eventually want to come visit the mega-property at Foxwoods.
Armentrout insists the New England market isn't saturated yet, even though Foxwoods is putting its chips behind new casinos in Pennsylvania, Kansas and California.
In Philadelphia, I'm Joel Rose for Marketplace.