Competition from Pennsylvania and New York slots parlors began in late November 2006, and a law that will convert a partial smoking ban on casino floors into a full ban beginning Oct. 15 will further test Atlantic City's staying power.

But despite gambling revenues falling almost 7 percent year-to-date this year from the same period in 2007, casino operators say don't count them out yet. As the resort's prime season is about to open, there are extensive plans to introduce new hotel rooms, top concert acts, gourmet restaurants, and of course, special rewards for the resort's most loyal customers, to stem the tide.

"This summer is as important as every summer - it's our peak season," said Mark Juliano, chief executive officer of Trump Entertainment Resorts Inc., which operates three casinos in Atlantic City. "But it's perhaps more important than others because we are coming off a negative trend, and we are trying to reverse that."

Gambling experts say the summer - which accounts for a substantial amount of the casinos' annual revenue - provides clear advantages for the resort.

"For Atlantic City, it's not that challenging in the summer," said gambling analyst Andrew Zarnett of Deutsche Bank AG in New York. "Demand significantly outpaces supply. People like to travel. They have more free time. The Shore population swells.

"The opportunity for [casino operators] in the summertime is to basically run an efficient casino," Zarnett said, "and try to deliver the best experience they can so demand doesn't trail off as much in the fall."

While Atlantic City has been on a tear, adding non-gaming attractions such as luxury spas, celebrity chef-laden restaurants, and upscale shopping malls, over the last few years, operators are also trying to increase convention and hotel business, particularly during the midweek.

An additional 2,500 rooms - thanks to new hotel towers at Harrah's Resort, the Borgata, and Trump Taj Mahal - are to help accelerate the gambling mecca's transformation from a daytime into an overnight destination.

Perhaps the most luxurious among the trio of towers is the Las Vegas-like, $400 million Water Club next to the Borgata, which opens early next month with upscale retail, luxury lofts, a giant spa and five pools - and no place to gamble.

"The Water Club is adding another level of experience that we can't offer today," said Larry Mullin, Borgata president and chief operating officer, "which is an abundance of quality hotel rooms with a spa, nightlife, and overall resort experience that we don't offer in the market in a large dose."

On a recent night at The Pool, Harrah's Resort's popular one-year-old attraction, a private luau party was taking place for counselors with D.A.R.E., or Drug Abuse Resistance Education.

Among them was Tom Wood from Burlington County. Wood, 29, who stayed overnight at Harrah's Resort for the first time last month, said he was impressed with the changes, particularly the $375 million Waterfront Tower, the centerpiece of a $550 million expansion at the casino.

"They did a real nice job in redesigning this hotel," Wood said of the 961-room lodging that debuted in early March, and where he stayed for two nights.

The Taj Mahal is undergoing its biggest expansion since it opened on Oct. 2, 1990, by adding a $255 million tower with 786 rooms that will open Labor Day weekend. "It's going to be spectacular," said Donald J. Trump at the topping-off ceremony for the Taj Tower on March 31. "It's going to set a new standard in Atlantic City for quality and luxury."

One demographic that Atlantic City continues to heavily target, especially in the summertime, is the 20- and 30-year-old crowd.

To lure them, the casinos are rolling out top concert acts and entertainers throughout the summer. They include Eric Clapton and Stevie Nicks at the Borgata; Boyz II Men and Smash Mouth at Showboat's House of Blues; and Clint Black and Boston at the Tropicana.

Starting Memorial Day weekend, the deck at The Pool at Harrah's Resort will feature live DJs on Friday and Saturday nights.

"It's going to be an unforgettable summer in Atlantic City," predicts Tony Rodio, regional president for the Atlantic City Hilton and Resorts casinos.

Resorts - the first gambling house to open its doors here - will launch Atlantic City's 30-year anniversary of hosting casinos with a four-day bash over Memorial Day weekend featuring fireworks, Natalie Cole, and partying till dawn in its popular retro '70s and '80s Boogie Nights nightclub. Its sister casino, the Atlantic City Hilton, will bring in the Beach Boys and Three Dog Night in a pair of free concerts over the Fourth of July weekend.

No one will go hungry either. The four Harrah's Entertainment Inc. casinos - Bally's, Caesars, Harrah's Resort and Showboat - will host the four-day "Toast to the Coast" food and wine spectacular from June 26 to 29.

McCormick & Schmick's Seafood Restaurant opens at Harrah's Resort next month. Not to be outdone, Patsy's Italian Restaurant - a New York favorite of Frank Sinatra's - debuts at the Atlantic City Hilton at the end of the month. And the Taj Mahal will open Il Mulino New York, after the famed Italian restaurant in New York's Greenwich Village, in late summer.

One of the biggest differences between Pennsylvania's slots and Atlantic City's casinos is the Shore resort's ability to "comp" its most loyal customers, or shower them with meals, gifts, rooms and other freebies because of New Jersey's low tax rate of 9.25 percent on gross gambling revenue. By comparison, Pennsylvania takes a 55 percent tax on gross slots revenue.

The loyalty programs among Atlantic City's casinos will kick into overdrive with slots and table-game play promotions. For instance, card-club members at the three Trump casinos and the Tropicana can use their earned Comp Dollars in the casinos' retail shops.

The Tropicana has a new area to earn points. Yesterday, the casino held a ribbon-cutting for Havana Rooftop Slots, a themed section with 165 slot machines, on its gaming floor.

"We have a choice," said Ed Palumbo, 59, a retired school administrator from Westchester County in New York. "We can go to Connecticut, Atlantic City or locally with Empire City [a slots parlor] in Yonkers.

"We choose to come down here," said Palumbo, who prefers trying his luck at roulette when he's in Atlantic City. That's something else New York and Pennsylvania don't offer - dealer-staffed table games. "As long as the comps keep coming, I'll keep coming."

Palumbo and his wife had just exited La Piazza Buffet at Caesars last month after enjoying a comped dinner, and headed back to their hotel room, which was also on the house.

Celeste Palumbo, 57, an avid slots player and shopper when she's in Atlantic City, summed it up: "To me, the ocean is the big attraction," she said. "There's no better place to be in the summer than here."

For video of the nightlife at Tropicana, Harrah's, Taj Mahal and Borgata in Atlantic City, go to http://go.philly.com/casino