New Atlantic City casino draws younger set
The billion-dollar Borgata Hotel Casino & Spa is the first new casino to open in Atlantic City in 13 years.
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NEW YORK (Reuters) -- Matt Goscky -- a regular at the Borgata, the newest casino in the New Jersey gambling mecca of Atlantic City -- is young, bets big and loses steadily. He might be just what that city needs.
"I usually come here about once a month, and lose $1,000 each time," Goscky, 22, said.
"I might be crossing my limits tonight," he said, weaving his way around the slot machines and gaming tables, through clusters of hip, young people wearing designer clothes.
The billion-dollar, 43-story Borgata Hotel Casino & Spa dominates the skyline of once-fading Atlantic City. The first new casino to be built there in 13 years, it is luring a significantly younger crowd than the 55-plus players the East Coast resort city has generally attracted since gambling was legalized in 1977.
A joint venture between Boyd Gaming and MGM Mirage, the opulent 2,002-room Borgata brings Las Vegas-like glitz to the East Coast. European-style guest rooms have marble floors, wood-paneled walls and panoramic views. There are 11 upscale restaurants, gourmet chefs, high-end stores including its own private label and three nightclubs targeting a younger demographic-- one that Borgata likes to call the "rejector."
Twenty-somethings who previously "rejected" Atlantic City, now huddle around gaming tables in trendy attire, sipping martinis and guzzling name-brand beer.
"We are the only casino in town to serve bottled beer," said Larry Mullin, chief financial officer at the Borgata.
Casino executives pride themselves on appealing to a younger crowd. In a calendar titled "Borgata Babes," the casino's cocktail servers appear as scantily clad pinup girls.
The strategy seems to be working. The Borgata, which opened in late July in Atlantic City's Marina District, increased its profit margins to 23.9 percent this quarter from 20.4 percent in its opening quarter.
Table-game winnings were $48.6 million in the fourth quarter, catapulting the casino to No. 1 in table games in the Atlantic City market.
Even with all its successes, the Borgata has encountered some problems. Some customers have complained that service is not up to par. Some financial analysts fear that Borgata, by drawing visitors away from the other casinos, might cannibalize the Atlantic City market, and older patrons say they feel alienated by the youth-oriented atmosphere.
Borgata executives say their product is not geared toward "the Tuesday afternoon slot customer," which is evident in reactions from frequent visitors to Atlantic City.
"It's the 20s tower, or maybe even the 30s, but it's not for us in our 60s or 70s," laughed 72-year-old Dan Gretz, as he fed the slots at Caesars, a casino hotel on the Boardwalk.
Even so, some younger guests who have stayed at the Borgata say they were not satisfied with the service, describing the staff as "cold" and "inflexible."
When friends of New York sales executive Lisa Rayman booked a room for her bachelorette party, they were disappointed that their request for a bathrobe for the bride-to-be was denied. Since the room cost $300 a night, Rayman said her friends persisted, "but the people wouldn't budge."
"It sounds like there was a miscommunication," said Rob Stillwell, vice president of communications for Boyd Gaming. "That's not our policy. If someone needed a bathrobe, we would get them a bathrobe,"
Wall Street analysts are concerned about the effects of the new casino on the market. Even though Borgata has attracted thousands of curious customers, analysts remain divided on how long the new casino will keep its sparkle to continue drawing more visitors to Atlantic City.
Along with such concerns, the Borgata, like other casinos in the market, faces competition from American Indian-run casinos and the possibility of gambling being legalized in neighboring states.
But Boyd executives remain optimistic, already planning to expand the property to include new bars and additional space for gaming, conference rooms and retail stores.
The intention is to sell more beds and raise room rates while keeping a tight lid on costs. They say criticism about cannibalizing the market is not their concern.
The aim is to give shareholders a return, not to worry about the rest of the casino industry, Mullin said. "It is not our job to change the market. Maybe the competition we provide will."
Copyright 2004 Reuters
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