Atlantic City bets big, but not on gambling

Associated Press

ATLANTIC CITY, N.J. — Atlantic City's efforts to recapture some of the tourism dollars it has lost to casino competition in recent years finally appear to be working.

Nine years ago, the city's casinos started realizing they needed to offer more than just gambling if they still wanted visitors. They doubled down on expensive investments like additional hotel towers, restaurants, swimming pools, spas, shopping, nightclubs and concert venues.

Now, cash sales at non-gambling outlets within casinos represent 28.5 percent of revenue, up from 22.3 percent two years ago, and bars have increased their payrolls by nearly 39 percent in the past two years, according to a recent study conducted by the consulting firm Tourism Economics and commissioned by the Atlantic City Alliance, which promotes the resort to other parts of the country. The study didn't address profits, but many casinos have reported upturns in profits after adding extras.

"I'm not really a gambler," said Brandon Ferguson, of Oaklyn, New Jersey. "I don't like to give my money away; I like it to work for me. I like to chill on the beach, enjoy some good food, do some sightseeing and people-watching."

The Playground: He was one of many who turned out in late June for the opening of The Playground, developer Bart Blatstein's $52 million remake of the former Pier Shops complex into a music-themed entertainment facility. Its main attraction is T Street, a row of bars and performance venues meant to evoke Nashville's Music Row: a honky tonk here, a retro '80s bar there, an outdoor beer garden, and of course, an Irish pub.

A large concert space at the end of the pier can hold 2,000 fans, as well as meetings or even a wedding. Coming soon: a bowling alley and a sports bar designed for fantasy sports aficionados.

Casinos alone have become boring, Blatstein said.

"Would you go see the same movie over and over again?" Blatstein asked. "That's what's happening here. Atlantic City needs something else besides gambling."

Change: For nearly 30 years, Atlantic City's casinos drove busloads of people to their doors, let them play the slot machines or table games for a few hours, and sent them home. It worked fine — until other casinos started popping up nearby, and suddenly people could drive 20 minutes to play the slot machines and table games that otherwise would be a three- or four-hour round trip.

"All we really needed was gaming," said Tony Rodio, president of the Tropicana casino and a longtime Atlantic City casino executive. "We were the convenience option for the entire Northeast. We had more demand than we had supply. We didn't need conventions."

Now, he said, his casino and the city are both staking a good portion of their futures on offering more than gambling.

If revenue from third-party businesses that lease space at attractions like The Quarter, the Tropicana's Latin-themed dining and shopping complex, are included, Rodio said, his casino's gambling and non-gambling revenues would probably be close to even.

The Quarter is designed to evoke Old Havana. There are restaurants and bars, clothing shops, a somewhat risque candy store, and, every Christmas, an indoor light show.

Revenue: Atlantic City has plenty of company in banking on non-gambling attractions as a way to reinvent itself, among them Las Vegas and tribal casinos. But Atlantic City had far to fall and, some observers say, waited too long to shift its strategy.

Even with the extras, the city's casino revenue continues to plunge, from its high of $5.2 billion in 2006 to $2.74 billion last year, Four of the city's 12 casinos closed last year.

A poll released in June by Fairleigh Dickinson University found that non-gambling attractions are the most important factor for most New Jerseyans in choosing a casino to visit; 40 percent listed it as their main priority.

Also in June, the Borgata casino opened a $3.5 million outdoor concert center that can hold 5,000 fans. In April, Bass Pro Shops opened a $15 million superstore. In August, Caesars Entertainment will open its $126 million conference center.