April 25th, 2011 | Published in Casino News
Resorts casino is attempting to win back the business they once experienced. Resorts was the first casino in the United States to open outside of Nevada. Unfortunately the rebuilding effort is proving to be difficult and expensive. Since its reopening, the casino has been giving away large amounts of money and discounted hotels rooms compared to the competition. The company is currently entangled in lawsuits with the former owners, a utility company and several cocktail waitresses.
Despite these efforts, the casino continues to lose money, just not as much as before. The owner and former casino executive Dennis Gomes predicts the casino will turn a profit under his management by in July 2011 thus breaking even for the year.
The Downfall of Resorts
Resorts opened on May 26th, 1978 and was incredible profitable for many years. As more casinos opened in Atlantic City, Resorts’ share of the market drastically fell. Once casinos began opening in the Philadelphia area in 2006, Resorts was hit even harder. Senior citizens have become their regular customer.
Dennis Gomes Resume
Gomes boasts an impressive resume in the casino industry holding management jobs with the Tropicana Casino and Resort, Trump Taj Mahal Casino and Resort, Hilton Nevada Properties and the Golden Nugget in Las Vegas. Additionally, he was Nevada’s top casino corruption investigator as chronicled by Martin Scorsese in the 1995 film, “Casino”.
The Opportunity of a Lifetime
The previous owners of Resorts Casino was Los Angeles-based hedge fund firm, Colony Capital, LLC. In 2009, they stopped paying the mortgage and handed the keys to their lenders. At this point, Gomes and New York real estate company Morris Bailey saw an opportunity to turn the resort around and make a large profit. Therefore, they purchased the business for $31.5 million, a small fraction of the $140 million Colony Capital paid for the casino in 2001.
The Rebuilding Effort
The first step was to slash payroll and downsize. Next, Gomes and staff rebranded the casino and 90-year old building as a roaring 20’s theme. Luckily, HBO created a series about 1920’s Atlantic City. Since the building was from that era, it did not need any type of makeover and was perfect for the show.
The combination of downsizing and rebranding significantly helped Resort’ Casino get back on their feet and become a competitive business entity. As business continues to grow, it appears as if this Atlantic City institution may make it after all.