Jim Allen, CEO of Hard Rock International, has a bone to pick with Atlantic City, N.J., the East Coast casino centre and home to one of the assets of his business.
The Hard Rock Atlantic City opened in June 2018, and the owner sprucing up the venue that was once the Trump Taj Mahal poured $500 million. The land was bought from banking billionaire Carl Icahn. Allen expressed dismay in a recent interview with Global Gaming Business (GGB) that the city did not do more, given the level of spending on the Boardwalk by Hard Rock.
In terms of gross gaming income (GGR) on the Boardwalk, Allen said Hard Rock is second, saying the company made a major statement in New Jersey. The nine operators in that market posted $239.4 million in gross operating profits (GOP) in the third quarter, an increase of 12.5% year-over-year.
Allen is not a company’s first CEO to worry about the competition in Atlantic City. Earlier this year, Tilman Fertitta, CEO of Golden Nugget, said the Boardwalk is not a nine-casino venue and the city is too crowded with gaming assets at the moment. Fertitta, who also owns the Houston Rockets, said that owners don’t make the necessary investments in keeping assets fresh with so much income competition, describing how the city “got all run down” during previous eras of struggles.
A recent research project conducted by professors at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy for the State of New Jersey noted that concentration concerns are relevant and that Atlantic City is facing increasing competition from other nearby markets such as Philadelphia and Delaware.
Allen’s Atlantic City quibbles aren’t concentrated. But he said the market today is worse than it was two years ago.
“I think we’re happy with where we are in our gross revenue,” Allen said. “We certainly admire and respect the amazing job MGM created with Borgata.” On the Boardwalk, the Borgata of MGM Resorts International is the top revenue-generating asset.
Today, Allen has trouble with the gaming mecca of the Garden State. “It’s a shame that they did not rise to the occasion of a company coming in, putting $500 million into that city,” said the Hard Rock chief executive in the GGB interview,” he said.
Allen was quick to note that the Seminole Tribe, the parent group behind Hard Rock, did not borrow money to fund their Atlantic City project, and the tribe wrote a check to get it started for over $500 million.
“There were all kinds of promises (from) Trenton and the CRDA (Casino Reinvestment Development Authority) and the city that things were going to change,” said Allen.
Among other things, the executive condemned political corruption in the city and poor maintenance of local parks.“Pacific Avenue has the identical problems it had for the last 20, 30 (years ago), and frankly, it’s worse than it was 10 years ago,” said Allen.