Market Commentary and Intraday News
Tribal company to manage NJ's Resorts casino
287 days ago
By GEOFF MULVIHILL
(AP:ATLANTIC CITY, N.J.) A Connecticut-based tribal gambling company is taking over the management of an Atlantic City's oldest casino.
Officials announced Tuesday that Mohegan Tribal Gaming Authority will be the new operator of Resorts Casino Hotel.
It's the first major foray for an American Indian-run firm into either of the United States' traditional gambling hotspots.
When it opened in 1978, Resorts was the first legal place to gamble in the U.S. outside of Las Vegas.
Like other casinos in the New Jersey resort city, it has struggled in recent years because of increased competition in nearby states.
Mohegan owns casinos in Connecticut and Pennsylvania.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
A tribal casino, once the main legal U.S. gambling alternative outside Las Vegas and Atlantic City, is expected to take over management of New Jersey's oldest gambling hall, Resorts Casino Hotel.
Resorts scheduled a news conference Tuesday afternoon to announce what it calls "an exciting new partnership." Citing several unidentified people familiar with the deal, The Press of Atlantic City ( http://bit.ly/P1XmpG ) reported the Mohegan Tribal Gaming Authority will become the new operator of the casino, which has been in flux. http://bit.ly/P1XmpG The move represents a major push for the firm to get into a long-established gambling market.
Casino industry consultant James Karmel says Mohegan may be seeking to become one of the major players in Atlantic City, where casinos have struggled for years.
"You're probably looking at consolidation," he said. And Mohegan, which runs casinos in Connecticut and Pennsylvania, could become one of a handful of firms to run the city's gambling businesses, he said.
Resorts opened in 1978 as the first place to gamble legally in the U.S. outside of Nevada.
Atlantic City flourished as a gambling resort for nearly 30 years, with revenues growing every year.
But in 2006, casino gambling came to nearby Pennsylvania. Coupled with a brewing recession, that spelled trouble for Atlantic City, which has seen gambling revenue dropping for six years.
Resorts was sold in 2010 to Dennis Gomes and Morris Bailey for $31.5 million.
Gomes, seen as a visionary in the industry, rebranded the casino in a roaring `20's theme to capitalize on the HBO series "Boardwalk Empire" about Atlantic City in the Prohibition era.
But Gomes died in February and his son, Aaron, has been helping to run the casino.
Last month, Resorts announced a new venture, teaming with Jimmy Buffett to develop a Margaritaville-branded entertainment complex in part of the casino. The Mohegan Sun's Connecticut flagship casino already has a Buffett-themed restaurant.
Karmel said Resort's owners will probably need to raze their historic building eventually and start anew to be able to compete with modern casino buildings.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.