Rome has been sacked

The drama of the sacking as caught by French painter Jean Noel Sylvestre in 1890
The first sack of Rome helped hasten the end of the empire

The first casino to open in Atlantic City in May of 1978; in Nevada we watched in awe as people stood in lines for hours for a chance to take a chance at one of the table games or slot machines.  The streets may not have been paved with gold, but the casino was certainly awash in cash. From the beginning it was a calculated risk, instead of building a brand new property Resorts International remodeled an old hotel – Chalfonte-Haddon Hall Hotel that has originally opened in 1868, but had been moved and remodeled with additions at the beginning of the 20th century; using the old building gave Resorts a huge head start over the next casinos. Resorts was gambling that a year or so head start would guarantee, not only a year of huge profits, but a permanent position as a market leader.  The gamble was successful at first, but as other new and more exciting casinos opened Resorts slipped farther and farther back in revenues, until it was in last place and finally into bankruptcy and repossession.

Of course, today all of Atlantic City is in somewhat the same position, the upstarts in Pennsylvania are all newer, more exciting and more importantly much closer to what used to be the customers of the Atlantic City casinos.  This week Dennis Gomes purchased Resorts – no price has been released, but it is less than $140 million dollars the price last time it sold in 2001, but probably more than the $2.5 million Resorts International paid for the hotel in 1978.. Dennis has had a very successful and storied career; his rise to fame began when he uncovered a scam at the Stardust in Las Vegas – that case altered gaming control permanently and lead to significant advances in internal controls. He has also been successful in Atlantic City as an operator, but never the owner. Everyone from the head of the New Jersey gaming regulatory agency to the lowest level employee in the city hopes that Gomes can perform a miracle and restore the glory to Resorts and Atlantic City.

I wish him well and hopes he is able to return Resorts to a profitable state.  But I don’t believe it is possible to perform the miracle that is expected of him.  Change is permanent and irreversible – going back can’t and doesn’t happen.  It is not possible for the economy to return to 2006, I cannot ever be the runner I was 30 years ago (or even last year, aging is after all at its simplest level just change), marriages, business and everything else change and that change is not reversible. That does not mean a business cannot return to making profit after losing money, but to do so it must change and adapt to new conditions not return to some mystical past era.  That is true for everything.

The picture above is an example; this year marks the 1600th anniversary of the first sack of Rome.  At the time Rome ruled the world, it had a population of a million people – it was literally the center of the western world; all roads lead to Rome, it was the model for good government, education and focus of all scientific thought.  A couple of hundred years later it was a village with 30,000 uneducated, struggling villagers who did not even rule themselves much less the world.  Rome did not disappear, today it is a very viable important city, but it never returned to “the Glory That Was Rome.”  Atlantic City and Resorts have been sacked; Resorts was sacked by the other casinos in Atlantic City and they in turn were sacked by casinos in Pennsylvania. Change has happened, for any one or for the collective entity that is Atlantic City casinos (whatever and whoever that finally becomes) will require some radical change and a creative adaptation to the new conditions.

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August 2010
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