Friday, June 27, 2003 | 12:03 p.m.
ATLANTIC CITY -- Atlantic City is trying to go from shabby to chic.
The opening of a $1 billion hotel and casino, the first major property added to the New Jersey seaside gambling resort in 13 years, is spurring rivals to spend millions of dollars to appeal to new and younger gamblers. The goal: Lose the reputation as a destination for busloads of slot-machine players, and become more of a hipster alternative to Las Vegas.
Some of the improvements are already on display. Caesars recently added a high-end slot-machine lounge, as well as beach cabanas offering cocktails on the strand. Bally's just underwent a $55 million renovation.
The catalyst for the Atlantic City makeover is the Borgata Hotel Casino & Spa, which is scheduled to open Thursday. To some, it has the potential to jump-start a city best known for its vintage boardwalk, and for inspiring a Depression-era board game, into a destination with tony shopping and dining for people who have little interest in the slots.
Atlantic City is hoping to follow the Las Vegas pattern, where the opening of The Mirage hotel in 1989 is credited with sparking the city's transformation into a 24-hour theme park. Since the early 1990s, Vegas has moved considerably away from its gaming roots, adding everything from high-end restaurants such as Spago to fashionable stores such as Prada.
"Vegas taught the industry that there's a world of profits to be made by answering the needs of people who are tired of gaming," says Paul Rubeli, chairman of Aztar Corp., which runs the Tropicanas in Atlantic City and Las Vegas. "The one problem that plagues us after 24 years is that after you're done gambling, there's absolutely nothing to do in Atlantic City."
To get around that problem, the Borgata -- a 2,000-room colossus with 3,650 slot machines -- will also have 11 restaurants, retail shops, a 50,000-square-foot spa and a theater. The point is to appeal to the "Atlantic City rejecter," says John Schadler of Schadler Kramer Group Advertising, which is handling the marketing effort.
Rivals nearby are scrambling to keep up. Tropicana is spending $225 million to add a 1,600-room hotel tower, a Palm steakhouse, an Imax theater, a nightclub dubbed Cuba Libre and retail stores. The goal is to be more like the Vegas mega-casinos, which make roughly half of their revenue from nongambling activities.
In all, Atlantic City operators including Aztar, Park Place Entertainment Corp. and Harrah's Entertainment Inc. are spending roughly $700 million to dress up their own local casinos.
One of the most dramatic additions to the city won't be a casino at all, but rather, a mall on a pier. The $80 million waterfront development, scheduled to open the summer after next, will have 325,000 square feet of restaurants, shopping and nightclubs.
The Atlantic City makeover is long overdue. The past decade has seen an explosion of gambling options, from riverboats to elaborate casinos on Indian reservations -- and people are lapping it up. Every year Americans spend more money on gambling than they do on movies. They spent $26.5 billion last year in commercial casinos alone, excluding Indian casinos, according to the American Gaming Association. But Atlantic City has done little to respond even as competition heated up.
Currently, gambling revenue in Las Vegas and Atlantic City is roughly equal -- each bringing in $4.3 billion in 2000, according to a study by Rutgers University School of Business. But visitors spend only a tenth as much on nongambling activities in Atlantic City -- about $12 per visitor in Atlantic City versus $120 in Las Vegas over the course of an average stay.
Until now, the newest resort in town was the Trump Taj Mahal, built back in 1990. It has the most to lose: Of the big casino operators, it's one of the few that hasn't yet unveiled plans to upgrade, and it doesn't have as much money on hand to play the high-stakes makeover game, analysts say.
Donald Trump insists he'll announce improvements within 90 days or so. "We have some very dramatic plans," he says. "I'm No. 1 in Atlantic City. There's a new guy -- they always like to shoot at me. But I'm used to that."
Located on the site of a former landfill several minutes' drive from the boardwalk, the Borgata is a 50-50 joint venture between Las Vegas-based Boyd Gaming Corp. and MGM MIRAGE, which owned the land. Boyd has done most of the work and will manage the property.
The casino is a shot at the big time for Boyd, a smallish casino company that runs casinos such as the Par-A-Dice in East Peoria, Ill., and Sam's Town Hotel & Gambling Hall in Las Vegas.
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