Resorts Casino Was the First Resort Built in Atlantic City after Gaming Was Legalized
Resorts Casino is an example of a casino which figured out a way to thrive during and economic free fall. Five years ago, most gaming people through Resorts Casino was finished. Now, the casino is thriving, enough so that it recently underwent a $9.4 million expansion.
The casino went from losing $12 million in 2012 to making $2.5 million in 2014. In the first half of 2015, the Division of Gaming Enforcement reported that Resorts Casino has made $4.5 million, which represents an expected 153% in growth from last year to this one. All of this in a time when 4 of its 11 competitors closed their doors and a fifth declared bankruptcy.
The First Atlantic City Casino
In the annals of Atlantic City casino history, Resorts Casino was the first. In the 21st century, though, the older casino had acquired a particurly bad reputation. Colony Capital, a little-known holding company out of Tennessee, were the owners of the property, but the resort had bottomed-out financially.
Morris Bailey and Dennis Gomes
In December 2009, Resorts Casino’s owners were hours away from handing the resort over to lenders and letting them deal with the financial mess. Instead, New York real estate investor Morris Bailey teamed with casino executive Dennis Gomes to buy the property for $31.5 million. Starting in mid-2010, the two began to try to save the casino and turn around the business.
The turnaround was not overnight. Mark Giannantonio, who has served as Resorts President since 2012, said, “It was dead, and it has been brought back to life. The year I started here three years ago, this place lost $12 million. Last year we made $2.5 million. And this year we will do far better than that.”
Investments in Amenities
Several key factors played into the survival of Resorts Casino. Certainly, the business added amenities through Bailey’s cash infusions, just as it’s set to add more amenities after the renovations. The casino also learned how to cut costs, after it brought in a new management team: Mohegan Sun.
Mohegan Sun’s Management Team
The story of Resorts Casino highlights another fact not often reported: Mohegan Sun still knows how to run a casino. So much has been made of the billion-dollar renovations of the original Mohegan Sun property in Connecticut. Those renovations happened in 2007 and 2008, just before the stock market crash and the onset of the Global Recession.
In those economic conditions, Mohegan Sun’s expansion of their main casino seemed crass and irresponsible–even hubristic. But most business people failed to see the real estate market collapse. A good case can be made the Native American tribe simply got unlucky. It happens in the casino business.
When Morris Bailey brought in Mohegan Sun to manage the business, it brought a solid business plan and good horse sense. Morris Bailey takes a big share of the credit, too. After his partner, Gomes, died in 2012, Mr. Bailey continued to invest in the property.
How the Story Changed
Bailey recently told Island Packer, “We had a moment of truth: walk away or go forward. That’s why we decided to stay; we believe in Atlantic City. The key was making a financial commitment.”
In 2013, Morris Bailey saw the results of his earlier $35 million investments in the property. The Margaritaville Restaurant & Club opened. The establishment turned around the business.
Reasons for Confidence
With the $4.5 million in revenues in the first half of 2015, Morris Bailey’s casino appears like it is well on its way to rewarding him for the big investments. Having four competitors close has helped business, because many of those gamblers relocated to a new favorite casino. Those who liked the Showboat or the Atlantic Club are likely to play at the more understated Resorts Casino, just as the people who played at Trump Plaza might play at Trump Taj Mahal, which retains the same player rewards.
The future should be bright in other ways. New Jersey’s legislature eventually will enact a PILOT bill to being stability to the AC casinos’ yearly tax bill, along with a lower price tag. With several factors in its favor, Resorts Casino should be stable for the foreseeable future.
Morris Bailey could have even more good news soon. He told Times Union he expected PokerStars to receive a gaming license for New Jersey in “weeks, not months”. Resorts Casino has a contract to partner with an online poker room and casino with PokerStars, the #1 poker site in the world. If that were to happen, most expect Resorts Casino would have the top online card room in the state.
