Hard Rock has already established itself as a major player in the hyper-competitive Atlantic City market, finishing third in NJ land-based casino revenue.
Meanwhile, it appears Ocean Resort is still trying to find its sea legs, as it finished ninth in a nine-horse race in total casino revenue.
It seems clear-cut, but it’s important to not read too far into a single month’s revenue numbers.
“Hard Rock is doing better than I thought they’d be doing; Ocean is not doing as well as I thought they’d be doing,” David Rebuck, the director of the New Jersey Division of Gaming Enforcement told PlayNJ. “But it’s early. I remain optimistic for both.”
Hard Rock beats expectations
Hard Rock AC made quite a splash in its first full month.
With land-based revenue of $32.4 million, Hard Rock is likely to become the number two land-based casino in the Atlantic City casino market in short order.
Hard Rock brings a lot to the table and was expected to do well:
- Hard Rock spent about $500 million renovating and updating the aged Trump Taj Mahal.
- The company brings a unique marketing focus to the table (targeting younger customers), with concerts and live entertainment.
- As an international gaming company, Hard Rock AC possesses an expansive database, many of whom may not be known to other New Jersey casinos.
That said, Hard Rock AC beat Caesars, and nearly bested Tropicana in its first month in the market. Not too many people were predicting that.
Ocean Resort: ‘Slow and steady wins the race’
Despite being one of only two operators offering all three verticals: land-based casino, online casino, and NJ sports betting, Ocean Resort Casino struggled to gain market share in July.
Bruce Deifik, owner and chairman of Ocean Resort, is one person who isn’t concerned. In fact, Deifik told the Press of Atlantic City, he couldn’t be more pleased with the July revenue numbers.
Reason being, Ocean Resort doesn’t have the debt number Revel did.
According to Deifik, Ocean, unlike Revel, is EBITDA- (earnings before interest, taxes, depreciation, and amortization) and cash flow-positive.
DGE Director Rebuck agrees, explaining that it may take Ocean Resort some time to find its groove in the market.
“I don’t think they have the database others do,” Rebuck said. “There’s a lot of neat amenities. It’s a spectacular building and when I go through it seems active, there are crowds.”
One amenity Ocean Resort will be able to leverage for a while is its sportsbook, a 7,500-square-foot, centrally-located space that could be open by Sept. 1.
“No one is going to have anything like it on the east coast or in Atlantic City for a while,” Rebuck said. “They have an opportunity there. They will have the best sports betting facility (for a short period of time), so take advantage of it and get people in your property.”
Eight is enough?
The big question is: Can the AC market support nine casinos?
According to Rebuck, the market can definitely support eight casinos, and he feels there’s an opportunity to support nine, but only time will tell.
“I felt we gained stability in late Q3/Q4 of 2015 in an eight casino market.
“We had stability, even if there was a market downturn we could handle eight casinos.
“When it went to a seven casino market, they’re [really] happy. They’re doing well.
“But now we jump to seven to nine.
“I know that we can support eight, with all the changes we’ve had and the diversity I know we can, I’m not concerned.
“I think there’s an opportunity here to be successful with nine.”
The two new casinos did cannibalize the other properties in July, but the market grew by 12 percent. That’s a clear signal that the two new properties expanded the market and weren’t just cannibalistic.
Both will also be able to get a boost from legal sports betting and the continued growth of NJ online gambling. As will the existing casinos that are attempting to hold off the new entrants in the market.
If ever there was a time to launch two casinos into the market, it’s now, when the casinos can count on online casinos and sports betting revenue to bolster their bottom lines.
“The casino gambling market in the Northeast corridor, it’s a challenge,” said Rebuck. “You better not be faint of heart if you’re a casino operator in the Northeast corridor. It’s challenging and you better be really good at what you’re doing.”
Rebuck went on to explain what the DGE has been doing in order to give Atlantic City’s casinos every opportunity to compete:
“As a regulator what I’ve been trying to do for the past few years is provide the New Jersey operators with every possible tool that they can have at their disposal to be in a very strong competitive position.
“Whether it’s offering product no one else offers; reasonable tax rates; regulations conducive to innovation, change, and forward thinking without losing integrity; open lines of communication when they come to you with things you might not be aware of; or allowing them to reinvest money in non-gaming areas.
“We want to give them every tool to be successful and if they can’t be successful they can’t blame the state of New Jersey.
“They have to look in the mirror and say, these guys are better than us, they’re outworking us, and they’re putting a better product on the floor or through the internet or through sports wagering, or through the hotel and restaurant operations and they’re beating us.
“I think we’ve almost hit that in New Jersey. I think we’ve given our guys more tools than anyone else to compete in this market. I’m always open to their suggestions, but I can honestly tell you I don’t have any more suggestions for them. It’s on them.”