Hard Rock CEO Puts Atlantic City on Blast
Hard Rock CEO has not been impressed
The re-opening of the former Trump Taj Mahal casino as Hard Rock Atlantic City was an exciting development last year, but it sounds like the Hard Rock’s leadership is possibly regretting the decision to invest in the east coast gambling hub. In an interview published recently by Global Gaming Business magazine, Hard Rock International Chairman and CEO Jim Allen expressed his concern with the state of his casino’s host city.
“Candidly, we’re disappointed with Atlantic City,” he said. “There’s no other way to say it. … It’s a shame that they did not rise to the occasion of a company coming in, putting $500 million into that city.”
Despite an increase in gaming revenue in recent years and the rousing success of sports betting, Atlantic City has been struggling. Even with glitzy casinos, the people remain relatively poor and crime rates are high.
And as The Motley Fool says, gambling gains may be a bit deceiving. The two casinos who had the greatest profit increase on a percentage basis during the third quarter were the two newest ones: Hard Rock and Ocean Casino Resort, both of which opened last June.
“Yet therein lies the worry,” writes Rich Duprey. “Last year’s results were weighed down by the openings and the expenses incurred in marketing the new resorts, so this year’s gains are getting magnified. And though it’s not completely a zero-sum situation, Hard Rock and Ocean Casino do seem to be benefiting at the expense of some of their rivals.”
At the same time, sports betting and online gambling have boosted Atlantic City’s gambling numbers.
Golden Nugget owner sees mistakes being repeated
In an interview with The Press of Atlantic City in September, Golden Nugget and Houston Rockets owner Tilman Fertitta said the addition of Hard Rock and Ocean wasn’t a good thing for Atlantic City.
“It’s not a nine-casino market, and I don’t understand why nobody realizes that,” he said.
He elaborated:
This is what happened to Atlantic City the first time, and it’s how the casinos got all run down. People didn’t have the money to keep (their properties) new and fresh by putting money back into it. I think it’s a huge mistake again. It’s a seven-casino market, and when it was seven casinos, everybody was putting money back into the properties. Now, they won’t.
New mayor trying to fix things
Things got so bad a few years ago that in 2016, the New Jersey state government took over control of Atlantic City. The takeover was established as a five-year term during which the state government can override city council decisions, sell city assets, eliminate city agencies, and more. Current Governor Phil Murphy and Lt. Governor Sheila Oliver opposed the takeover, but said this spring that it would continue through 2021.
Not helping matters was the corruption of Atlantic City Mayor, who resigned on October 3rd after pleading guilty to wire fraud.
Current mayor Marty Small Jr. was not offended by Allen’s comments and is, in fact, grateful that Hard Rock took over the Taj and brought jobs to the city.
Small said he takes Allen’s opinion “as a challenge.”
“Going on what is 60 days (in office), I can only speak to the direction that I’m taking the city — the change in the climate and culture in City Hall, our clean-and-safe initiatives, pumping much-needed money via grants into the city — and all of the things that we’ve done in a short period of time, and we’re just getting started,” Small told The Press. “I’m excited and optimistic that this administration will change how he feels about the City of Atlantic City.”
Small recently went to bat for his city, urging the Governor and state legislature to allow the special 1.25 percent sports betting tax from Atlantic City casinos to go directly to the city government. The tax revenue is directed to the Casino Reinvestment Development Authority (CRDA) and is supposed to be used for “marketing and promotion” of Atlantic City.
East Rutherford and Oceanport, which get sports betting tax revenue from their racetracks, are given more flexibility than Atlantic City.
“In 14 months, New Jersey has overtaken Las Vegas as the No. 1 sports betting destination, and a lot of it has to with the success of Atlantic City and online,” he told the city’s Taxpayer’s Association in November. “But we don’t get one penny…that’s unacceptable.”
“We’re not asking for anything that no one else gets,” Small continued. “That’s going to be the fight. I represent the taxpayers. My number one priority, and it always will be, is to stand and fight for them.”
Last week, the Atlantic City Council passed a resolution backing Mayor Small.
COMMENTS