The Borgata is taking its customers to a place they haven't usually been directed to: outside.
On Saturday, on what was a small patch of grass sandwiched between two parking garages and a surface lot, the Borgata Hotel Casino & Spa will open Festival Park, a laid-back outdoor concert venue. The kick-off event, with a low price tag ($20, meant to build buzz), features bands with ties to New Jersey (Southside Johnny and the Asbury Jukes) and Philadelphia (the Hooters, G. Love and Special Sauce). The show begins at 5 p.m.
"We've long thought about doing an outdoor venue here," Borgata senior vice president of operations Joe Lupo said, recalling a temporary outdoor venue for a party held in the same space about 10 years ago.
The company considered many options, including a pool, but settled on an outdoor concert venue. "Entertainment is really coming around," Lupo said. "There was a time during the recession when people weren't spending their dollars more freely on entertainment." Live Nation, which books the Borgata and the Festival Pier in Philadelphia, provided advice on the project, which cost about $3 million to build.
The future of Atlantic City's resorts goes beyond casinos into non-gaming formats. Borgata, a joint venture of Las Vegas Strip stalwarts MGM Resorts International and Boyd Gaming, has found much success since its opening with what Lupo calls the "Las Vegas model." It is the highest-grossing casino in Atlantic City, with an operating profit of $38 million in the first quarter of 2015 (up from $21.5 million the year before).
All the marina casinos have been upgraded or are in the process of doing so. The three marina casinos are in a unique position to capture more non-gaming revenue from their patrons. The Atlantic City-Brigantine Connector, completed in 2001, has direct off-ramps to all three casinos in the marina. The three casinos are isolated from the rest of the island and don't have a boardwalk and beach just outside their doors to contend with.
The Golden Nugget underwent a complete overhaul when Landry's - a multi-brand company that predominantly owns seafood restaurants - bought the Trump Marina for $38 million in 2011. The company, notorious for its attention to cost control, had weathered the recession and invested $150 million in renovations. It also took over operations on the Frank S. Farley Marina (and installed one of its restaurants, Chart House, there).
Now, Farley Marina is thriving after years of neglect, attracting supersize yachts to its docks (Landry's owner Tilman Fertitta often docked his 164-foot Boardwalk yacht there last summer). It's attracting guests outside this year, too, with events not typically associated with casinos: Starting June 27, there will be yoga on Saturday mornings. In early July, the marina will host FakeFest - an entire weekend of tribute acts.
Golden Nugget on the marina was a money-loser in the first quarter of 2014; it made $4 million in the first quarter of this year. Revenue was $14 million higher in the first quarter than in the first quarter of last year.
Harrah's, a marina casino owned by Caesars Entertainment, is going in a different direction: In August, it will open a $125.8 million, 100,000-square-foot conference center. Eight years ago as part of a large expansion, the casino opened a shopping district and the Pool @ Harrah's, another popular non-gaming attraction.
Boardwalk casinos are expanding non-gaming attractions, too.
The Tropicana recently presented a redesigned Boardwalk facade, including a dramatic light show, as part of a $35 million renovation - only its most recent. Resorts spent $35 million to add a Jimmy Buffett's Margaritaville complex to the casino in 2013. The Tropicana is thriving as part of a complete turnaround since it emerged from bankruptcy in 2010, but Resorts was a money-loser in the first quarter of 2015.
Away from the beach, where there are no dead stretches from closed casinos, is where much of the action is this summer.
Festival Park is just one part of major upgrades to the Borgata this year, funded with $15 million from the Casino Redevelopment Authority. The casino is about a month away from finalizing designs for a new nightclub that will replace MIXX, which opened with the casino in 2003.
"We're going to be taking the MIXX space and basically blowing that space up," Lupo says. "And [we'll be] enlarging some space that we have adjacent to it on the other side of the venue." The new club will be built in the fall, with a soft launch planned for early December and a New Year's Eve blowout.
Lupo says he expects the non-gaming trend to continue - in part due to the lower tax rates for Atlantic City casinos as compared those in neighboring states.
"There's a lot of availability for us to create venues that are different than what neighboring jurisdictions can create," he said. "Atlantic City is not just a gaming city . . . it can facilitate other experiences that 30 million people in this region can experience."