Where there is life there is hope


The Golden Nugget kicks off the Fourth of July weekend with a fireworks show in downtown Las Vegas.

Atlantic City has not had a lot of good news lately (actually it has been 4 years), every month there is more bad news from Pennsylvania; tomorrow a casino is opening in Philadelphia, the table games in the state generated $34 million in August, the first full month of operations and the total gaming revenue in Pennsylvania for August was $230 million. Couple that with New York City on its way to having a casino, slot machines coming to Maryland and Massachusetts probably passing casino legislation next year, competition is getting worse.  The city itself produces a seemingly never-ending stream of bad stories, lower revenues, bankruptcies and canceled projects; it is hard to find a silver lining in the clouds or to get any glimmer of hope when looking at Atlantic City.

But today there was a surprising and potential good piece of news from Atlantic City, Landry’s Restaurants, the parent corporation of the Golden Nugget in Las Vegas and Laughlin is interested in purchasing the Atlantic City Hilton. It would be ironic – as the Hilton once was the Golden Nugget – but fitting; in its heyday the Golden Nugget and its golden boy lead the market.  However, now it is the city’s smallest casino – according to the Press of Atlantic City it lost $6.3 million last quarter.   When Golden Nugget opened in 1980 – it was the east coast dream of Steve Wynn.  In 1987, growing tired he said of New Jersey regulations, Wynn sold the casino for $440 million to Bally; that sale lead to a a string of ownership and name changes and in 1996 it became a Hilton hotel.

Wynn used the $400 million to build the Mirage and begin his remake of the Las Vegas Strip; when MGM bought his empire the downtown Vegas Golden Nugget went also; it then suffered the same series of ownership changes its Atlantic City cousin experienced until Landry’s bought it in 2005.  Landry’s principle stock holder is a cousin of the famous Fertitta family of Stations fame – Landry’s bought the struggle Nugget properties in Nevada as a way to get into the family’s golden business – casinos.    Since buying the Nugget the corporation has  has spent more than $300 million to renovate and expand the downtown Golden Nugget.  In November, the company opened the Rush Tower, a $150 million hotel expansion that added 500 rooms to the resort.

Operating in downtown Las Vegas is challenging – much like Atlantic City it is besieged with competition.  The locals market moved to regional casinos like those owned by the Fertitta family and of course the ten thousand pound gorilla on the doorstep – the Strip – has taken the lion’s share of the tourist market.  But Landry’s has persisted and survived.  It is possible that this is just what AC needs, a company that understands the challenges and is really best fitted to make a go of Atlantic City.  Landry’s would also be a significant change in direction for the market, an operator not focused on past glories, but one who is coming into today’s competitive market battle-tested with its eyes open.


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