The Casino Formerly Known as the Atlantic City Hilton (and currently known as the ACH) has just announced its new name: the Atlantic Club. It's also got a new game: the locals and low-rollers market. I'm really undecided about this one, but I thought I'd share some of my thoughts.
First, some history. The soon-to-be Atlantic Club opened in 1980 as the Golden Nugget, Steve Wynn's first built-from-the-ground-up casino hotel. If you want to hear a little behind-the-scenes from the Wynn era, check out three UNLV Gaming podcasts: Rick Santoro, who worked security and executive protection for Steve, Paul Steelman, who helped design the building, and Roger Gros, who dealt for Wynn before starting his career in journalism.
Wynn sold the Nugget in 1987 to Bally's, which renamed the place Bally's Grand. I worked there briefly scooping ice cream (the ice cream shop, last I checked, had become a player's club counter) and had a few adventures there. Later, Bally's Grand became The Grand, A Bally's Casino Hotel, and, after the Bally's/Hilton merger that created Park Place Entertainment, the Atlantic City Hilton. The property also got a small tower expansion. Last year, Hilton's franchise agreement expired, and, much like in Las Vegas, negotiations to extend it failed.
Now, they're doing a few things right here. First, I like that parking is going to be free. This is a good move for them since they're pretty isolated at that end of the Boardwalk--no one's going to park there to go to a convention in Boardwalk Hall or to spend time on The Walk. They don't have much to lose. Of course, I don't think that the other casinos have much to lose by offering free parking, but we'll save that discussion for another time.
This ties into the second change: promoting the Atlantic Club as a value proposition. It's difficult for me to write that because of the place's history. We've seen The Mirage drift towards the middle of the pack on the Strip, but imagine the Bellagio being gradually eroded and, after a few years of neglect, becoming the only property in the market promoted strictly as a value play. In its day, the Golden Nugget was the Bellagio of Atlantic City. It's difficult to describe just how special the place was in the early 1980s, when Frank was headlining and Steve was regularly walking the floor. There was a real sense that the Nugget was not only leading the market, but was in its own category. So to see the building relegated to "the place you take your wife on Wednesday" is quite a comedown.
But what choice do they have? Absent a massive re-investment, it would be impossible to compete with Borgata, Harrah's, and, in a few months, Revel for the higher-end crowd, and Atlantic City isn't exactly swamped with high-end play these days anyway. So maybe retrenching as a "value proposition" (a polite euphemism for "grind joint" if I ever heard one) is the best way forward?
Right off the bat, they're reducing the number of tables by over 40%, and knocking minimums down to "$5 to $15." I'm not sure whether that means the lowest-bet table on the floor will be between $5 and $15, depending on the volume, or whether it means all tables will have minimums between $5 and $15. If its the latter, I'm sure the (remaining) dealers are very excited about what this will do to their toke rate.[/sarcasm]
They've already begun marketing the place with billboards that, frankly, strike me as defeatist. "The Fat Lady Ain't Singing" isn't exactly Steve Wynn standing on top of the first hotel with his name on it. That kind of self-deprecating wit might seem cute in a meeting, but it shows a pessimism that is hardly going to improve customer service or inspire much confidence. And I don't know what, "Finally, a Casino for the Rest of Us" means, because presumably you're marketing to people who already like to go to casinos.
This can work if the Atlantic Club can deliver what locals casinos in Vegas do (when they do it right): personalized service and appreciation for smaller-stakes players. That's not going to be easy to pull off. The property already has an absurdly high comp/revenue ratio, so it's not like they'll be able to offer significantly better deals to players. I guess there's some potential value in picking off lower-hanging fruit, like $5 table players, that other casinos ignore, but what's the value in a $5 table player?
Repositioning The First House That Steve Built as a "value proposition" might be the least objectionable of the alternatives. There's been a very real concern that the property could close outright, so at the very least they get another three quarters to become competitive and see where they fit in post-Revel Atlantic City.
With the news that the casino in the Claridge has finally closed, it's clear that other casinos are starting to position themselves for Revel's opening. The next year will be a crucial one for many properties and the city as a whole.