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Fruits of Their Labor

Five new casinos open across the country in past month

Fruits of Their Labor

It’s often a truism that recessions and difficult times for government spark gaming legalization drives. If that’s true, then the last month was the realization of some of those efforts, as five casinos debuted in new and existing jurisdictions.

But the opening of Revel and Margaritaville Biloxi were in spite of a recession and more regional competition. Observers hope that those casinos will revive a dormant gaming industry in those regions.

The openings are just the start. Two more casinos are expected to debut in Ohio next month, and at least two more in Maryland. Massachusetts has just started the implementation process after gaming was legalized last year.

Maryland Live! Opens
Twelve-acre facility constitutes record casino opening

Years of legal and political battles culminated last month with the opening of Maryland Live!, the massive new property of the Cordish Companies in Maryland’s Anne Arundel County. The $500 million, 330,000-square-foot facility, the fifth Cordish-developed casino property (but first wholly owned) and Maryland’s third casino, opened to a packed house of customers that had waited for hours in a line of traffic circling the adjacent Arundel Mills Mall.

“If there’s anything we like better than a good fight, it’s a great party!” declared Cordish Gaming President and Managing Partner Joseph Weinberg of the company’s struggles to bring the project to fruition. Weinberg thanked Anne Arundel officials, casino designers and the property’s 1,500 employees—mostly local residents who underwent an intense training program—before joining company Chairman David Cordish, Anne Arundel County Executive John Leopold and other dignitaries to cut the ribbon on the facility, which includes 160,000 square feet of gaming space and a complete lineup of restaurants and bars.

And a great party it was, starting with a three-hour VIP event marked by circus performers, stilt-walkers, hostesses dressed in costumes that actually formed moving refreshment tables, and servers pouring wine from Rube Goldberg-style contraptions built into tall tricycles. Guests included representatives from several of the slot manufacturers, executives from casinos in Delaware and Atlantic City, and government representatives including not only Maryland officials, but also Atlantic City Mayor Lorenzo Langford.

The doors opened to a waiting crowd at 10 p.m.

Weinberg said the facility’s size—it sits on 12 acres, and including all retail and parking area, comprises more than 2 million square feet—makes it the largest opening of a casino in U.S. history, even with only half of the facility open. The property opened with 3,700 gaming machines, and the slot floor will max out at 4,750 games by fall. Restaurants include local favorites like Chesapeake Bay legend Phillips Seafood and national favorites like Bobby’s Burger Palace, the newest restaurant by celebrity chef Bobby Flay.

Also debuting with the grand opening were the Cordish-branded Live! Market Buffet, the Noodles Asian restaurant, and the “R Bar” in the center of the casino floor. The Cheesecake Factory, another national brand, will open June 20. By October, The Prime Rib, a popular Baltimore steak restaurant, will open an outlet at the casino. Other additions in Phase 2 of construction will include Ram’s Head Center Stage, a 500-seat performance venue; the Shop Live! retail store, a bus lounge and an additional 1,550 slots and electronic table games.

“We’re very proud and very happy,” Cordish said.

Other than the fact that it’s close to home—Cordish is based in nearby Baltimore—he said the biggest difference Maryland Live! has over previous Cordish casinos is that it is adjacent to the huge Arundel Mills Mall. Cordish said that is the main reason the company pursued the Anne Arundel license instead of the Baltimore city license.

“We located next to one of the great retail malls in America,” he said. “It’s got Neiman Marcus, Saks Fifth Avenue, Bass Pro, a movie complex—and I didn’t have to pay for any of it!”

Robert J. Norton, the property’s president and general manager, commented to Global Gaming Business that Maryland Live! sets a new bar for Maryland casinos, starting with the fact that it’s twice the size of the first two Maryland casinos combined.

“That’s a good starting point,” he said, “but success is really going to come down to product, the customer service and friendliness of our staff, and the amenities we have in comparison to other casinos.” 

Ohio’s First Casinos Open
Horseshoe Cleveland and Hollywood Toledo debut within a month of each other

Three years after voters approved of the constitutional amendment that authorizes four casinos in Ohio’s largest cities, the first of those casinos, the Horseshoe Casino Cleveland and Hollywood Casino Toledo, debuted within a month of each other.

Ohio’s first casino, the $350 million Horseshoe Casino Cleveland, opened May 14. Instead of the traditional ribbon-cutting, the casino opened with a large music video projected onto the façade of the casino, whose final scene was of a curtain opening to let the 4,000 players waiting outside enter.

The first of four casinos that will eventually open in the Buckeye State, the Horseshoe has 2,100 slots, 63 gaming tables, and a World Series of Poker room, and is expected to attract about 5 million visitors annually—or 13,000 a day. It employs about 1,600 mainly local people. Opening night included about 1,000 invited VIPs. Dan Gilbert, majority owner in the casino, spoke, as did Mayor Frank Jackson.

Matthew Cullen, president of Rock Gaming, which owns the casino, told the opening-night crowd, “We will provide the very best in entertainment, the best community citizenship, the best quality experience for the people who work here.”

Some players said they plan to make this casino a regular stop, and to stop going to old standbys such as casinos in Detroit, Michigan and West Virginia. “I’m glad they are opening. We don’t have to go out of town to gamble,” said one of the opening-night customers, according to the Cleveland Plain Dealer. “I’m going to be here all the time.”

The Horseshoe Casino Cleveland will offer many close-by dining choices for players who don’t want to stray far from their games. Three restaurants will offer food on the casino’s second floor—its gaming floor. They include a burger restaurant, a “fast Italian” eatery and a deli. For players who prefer to take a longer break away from the pit, there is a 400-seat buffet known as The Spread, with seven themed food stations.

This is the first casino that Caesars, the largest casino company in the U.S., has opened in five years. Its expansion plans rely on using local partners to open new properties, since Caesars is operating under the burden of almost $20 billion in buyout debt, nearly 10 times gross earnings. Caesars owns 20 percent of the Cleveland casino in partnership with Gilbert, majority owner of Rock Gaming LLC. They have a similar arrangement for the casino opening in 2013 in Cincinnati and are also partnering on a proposed project in Baltimore.

Ohio’s second casino, the $320 million Hollywood Casino Toledo built and operated by Penn National Gaming, opened on May 28, a couple of hours ahead of schedule.

Visitors flooded into the new casino to the strains of Frank Sinatra music. In the morning Toledo Mayor Mike Bell, favorite son Jamie Farr, a star of TV’s M*A*S*H, and other dignitaries helped inaugurate the grand opening, which attracted an estimated 10,000. The daily average is expected to be closer to 7,500 and nearly 3 million visitors are expected annually. Hundreds of people stood in line to sign up for rewards cards on opening day.

The casino sports a Hollywood décor, as befits its name, and it is festooned with black-and-white photos of icons of the golden age of cinema, such as Bogart and Bacall, but will also cater to sports fanatics with hundreds of TVs that will carry all conceivable sporting events at any particular moment.

For the opening day, showgirls in feather headdresses vied for attention with live music. To control the influx of patrons so not too many people were in the casino at any one time, the parking lot was closed three times. The nearby interstate highway was also backed up a few times. Off-duty Toledo police, who were stationed throughout the casino for the day, encountered no big problems. They continued to supplement security the first few weeks.

But these were all challenges that the new casino took in stride. “It has been a great day, and a very steady flow of people are continuing to come into the casino,” said casino spokesman Brent Burkhardt.

Many patrons said the new casino reminded them so much of Las Vegas that they sometimes forgot that they were in Toledo.

The new facility employs more than 1,300, which is one of the reasons voters approved four casino resorts for the state’s four largest cities in the 2009 election that amended Ohio’s constitution. Bell said he believes the new facility will help lead Ohio into an economic comeback.

Raking It In At Revel?
Superstar Beyoncé welcomes First Lady and New Jersey governor for opening concert

Memorial Day weekend marked the official start of a new era at the northeast end of the Atlantic City Boardwalk, as the Revel resort staged a four-day grand opening celebration.

The first new Boardwalk property to open since the Trump Taj Mahal in 1990, Revel actually opened its doors April 2 for an eight-week “preview,” a time during which many technological problems were ironed out in preparation for the grand opening, dominated by four nights of performances by superstar Beyoncé in the $75 million, 5,050-seat Ovation Hall.

Beyoncé performed to sold-out crowds all four nights, including First Lady Michelle Obama and her two daughters and New Jersey Governor Chris Christie, who attended the Saturday night performance. It was her official return to performance after she and husband Jay-Z celebrated the birth of their daughter, Blue Ivy Carter.

Some 1,200 rooms of the 1,900-room hotel tower were available for the grand opening, and all were occupied. “We could have used another 1,000 rooms,” Revel CEO Kevin DeSanctis told Global Gaming Business. He said the second phase of the hotel, expected to open this month, is a 300-room “boutique” section that will cater specifically to group business.

Also opening last month were the first two retail shops of “The Row,” a retail lineup designed as a multi-colored maze of elegant hallways housing some 40 shops. Opening last month were the resort’s main gift shop and Denim Habit, a chain store featuring men’s wear, swimwear and fragrances. Men’s brands include Robert Graham, Theory, Vince and Zachary Prell.

DeSanctis says the retail portion of Revel is aimed at a broad, middle market, with no ultra-high-end boutiques.

“We wanted the majority of the shops to be in the mid-range so people can still buy it,” he said. “If you only feature high-end luxury stuff, people just don’t buy it. What we’ve done from a retail perspective is try to make sure that it’s very affordable, and very approachable. We don’t want anybody coming in and taking out a home equity loan to buy something in this place. It’s generally things that people need while they’re here.”

Revel also has a luxurious, 32,000-square-foot spa, 14 celebrity-chef restaurants and 10 pools, not to mention a 130,000-square-foot casino. The property is marketing itself as a “life-style” resort, emphasizing the overall luxury experience with gambling as just one of the many attractions. DeSanctis and company are also reaching out to the convention and meeting crowd, which he thinks is undervalued in Atlantic City.

That doesn’t mean the casino has forgotten gamblers. Along with free parking, T-shirts and giveaways, Revel was offering tier-level match for other loyalty cards in the market (Borgata, Total Rewards, and Trump One). The match includes up to $50 in instant free slot play, up to $500 bonus free slot play, and free rooms for select levels. The casino is expecting gaming revenue to contribute at least 40 percent to the overall bottom line.

The successful opening followed an eight-week test period where the hotel and its employees were put through their paces with little or no marketing. Online reviews were largely positive but were overshadowed by the casino posting only $13.4 million in gaming revenue in April, ranking it eighth among Atlantic City’s 12 casinos. DeSanctis stressed that few hotel rooms were occupied and no marketing was done to draw gamblers to the casino. Those numbers will certainly improve in the next several months as executives ramp up an aggressive program of promotions and events that will surely bring more people to the far end of the Boardwalk.

Will the $2.4 billion mega-resort be the savior of Atlantic City, which has suffered gaming losses for five straight years? Most analysts think it is too early to tell. However, if opening weekend was any indication, Revel is off to a good start. 

It’s 5 O’Clock Somewhere 
Margaritaville opens in Biloxi

Jimmy Buffett’s Margaritaville Casino and Restaurant opened with a private party for 4,000 at 5 p.m. on Tuesday, May 22, with doors opening to the public at 8 p.m. The $62 million, 26,000-square-foot property features a casino, restaurants and an events center, and employs 1,000 people. Still, it’s one of the smallest casinos the Mississippi Gaming Commission has approved. Commissioner John Hairston said, “The brand of Margaritaville is extremely powerful. The power of that brand deserved the risk we took by allowing a casino on the small side.”

Scott Fischer, president of Leisure Dynamics Research, said Margaritaville, lacking a hotel, “broke the rules that sort of said you have to be clearly additive to the market. Not having hotel rooms kind of limits the distance you can pull people from.” Fischer added the casino, located five blocks north of U.S. 90 on Biloxi Bay, may be too far from the city’s other casinos.

Margaritaville Casino is the first Gulf Coast casino to open since Hurricane Katrina and the Hard Rock in 2007. The facility is part-owned and operated by former Grand Casinos CEO Tom Brosig, and the general manager is former Grand Casinos Biloxi GM Karen Sock.

However, those acquainted with Buffett’s empire and his legions of loyal “parrotheads” say the casino’s success is a sure thing. Based on his 1977 hit song “Margaritaville,” Buffett’s partnerships and licensed products based on the lifestyle brand now include restaurants, Landshark beer, a hotel, a satellite radio station, packaged foods, shoes and blenders.

The Biloxi casino is Buffett’s second; a small Margaritaville Casino opened last fall in Las Vegas inside the Flamingo Hotel. Other owners are building a larger Margaritaville casino and hotel in Bossier City, Louisiana.

In 2007, Caesars Entertainment announced it would build a $700 million Margaritaville casino in Biloxi but scrapped the plans due to the recession. In fact, Caesars Entertainment recently announced it will not finish building its Grand Casino there. The former Casino Magic was declared a blighted building by the city, which told Caesars to repair or demolish it. Harrah’s Entertainment, now Caesars, bought the Casino Magic tower following Hurricane Katrina.

Buffett, 65, was born in Pascagoula, Mississippi and made his “first professional dollar” in Biloxi in the 1960s. He said the idea for the Biloxi casino “came on my radar after Katrina, when former Mississippi Governor Haley Barbour called my business partner and said, ‘It would be important to everybody if you were part of the attempt at economic recovery on the Gulf Coast. We’d love if you would consider doing a casino down here.’ It made sense for me from my historical perspective as a child of the Gulf Coast.”

All in all, he said, “I thought it was the right thing to do. The big payoff to me is, yeah, we’re going to have fun and have a big business over there, but there are a thousand people that have jobs now.”

Looking ahead, Buffett said, “There’s definitely a Phase 2 coming if we are fortunate enough to be successful, and we can expand.”

 

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