Brookfield Manages Atlantis Casino in the Bahamas and Hard Rock Las Vegas, So It Has a Player Database
Local officials are enthusiastic to learn that the new owners of Revel Casino want to operate a casino at the property. On Tuesday, Toronto’s Brookfield Asset Management company bought Revel Casino for $110 million.
Brookfield won the rights to Revel in the second day of a bankruptcy auction against Glenn Straub, who bid $95.4 million after earlier making a stalking horse bid of $90 million. Straub hoped to turn the property into a rail link and a university, but Brookfield hopes to re-open a casino on the site. This would be good news for the flagging casino economy of Atlantic City.
Revel Casino and Local Competition
Some pundits and economists have wondered whether the reopening of Revel Casino would be a good idea or not, though. These people seem to believe that a non-gambling business might have added real growth to the economy, where a gaming-related business is likely to shift around a limited amount of gambling revenue, which already would have gone to another of the city’s seven casinos (that is, seven after Trump Taj Mahal closes next month).
Catania Believes Revel Is an Asset
Frank Catania of the Catania Consulting Group is one of those who believes a new gaming-related Revel Casino would be nothing but a positive. Catania believes a reopening would not only be an important symbolic moment for Atlantic City, but it could serve as a source of inspiration for the city as a whole.
Frank Catania is former director of the Division of Gaming Enforcement, so he understands the gaming mentality in New Jersey. He told NorthJersey.com, “You’ve got this $2.3 billion-dollar building sitting on the north end of the Boardwalk–for it to be vacant would be devastating,” said Catania, who is now president of the gaming analysis company in North Haledon told North Jersey which is his namesake. “You don’t want people to have the outlook that no one wants to go there anymore.”
Pollack Says It’s a Key to Recovery
Michael Pollack, Managing Director of Spectrum Gaming Group, an Atlantic County-based gambling research firm, said that the Revel Casino represented (and perhaps still represents) a pivotal factor in Atlantic City’s gaming-related growth. Referring to the city’s failed marketing push to promote local restaurants, spa resorts, and nightclubs instead of gambling opportunities, Pollack said, “Revel was designed to grow the market by appealing to a broader demographic. That strategy was not executed well, but it remains a goal. We know that–given the right message, with a well-executed strategy–the market can grow and new visitors can be tapped. There may very well be [more] casualties, as there have been in Las Vegas, but that does not mean that the market cannot still grow.”
When Revel Casino was built, it was meant to be a Las Vegas-style opulent resort. The design was built for high-priced clientele, while the gambling floor and the shows were also planned to appeal to high rollers. In a working class region depending more on local and not regional gamblers than ever, the ploy failed miserably. In its less-than two and a half years of operation, Revel Casino faced two bankruptcies.
New Marketing Strategy
That does not mean the property couldn’t work, under the right circumstances. The new ownership group bought Revel Casino for less than 5% of its original price. Under those circumstances, Brookfield Asset Management can afford to reopen the casino as an entirely different entity. With a different cost structure, different marketing plan, and the best-looking building in the city, Revel Casino has all the potential to be a success. As they say in sports, execution is everything.
David G. Schwartz, Director of the Center for Gaming Research at UNLV, agrees that Revel could help grow the gaming demographic of the city. Schwartz said, “I think that if you get an operator in who can attract people who are not already coming to Atlantic City, it can be a net gain. It is definitely a property that’s unique in that market.”
Appealing to New Demographics
People might believe the performance of the original Revel Casino would indicate such an appeal won’t work. The new owners don’t have to try the same concept to grow the customer base. Other demographics could be tapped. For instance, the Sands Bethlehem casino near Philadelphia appeals to Asian gamblers by stocking their casino with 50 baccarat tables (a favorite with ethnic Asians) and planning 50 bus trips from the Asian-American parts of New York City every week. Operators in Baltimore also market heavily to the area Asian population.
While Revel Casino might not go in that direction, those are examples of what can be done when the right management group hits on the right marketing concept. The idea is to make clear-eyed, rational assessments of the local market, design a plan which appeals to an undervalued demographic, and execute the plan with vision and efficiency. Building a client list is essential. When Atlantic Club was bought in a bankruptcy sale and closed in Janaury 2014, Caesars Entertainment and Tropicana Resorts combined to purchase the property. Caesars paid $23 million to buy the property and shut it down, while Tropicana paid $8 million-plus to buy the gaming equipment and the player database, which is considered a key part of any gambling operation.
Whelan Sees Brookfield Succeeding
State Senator James Whelan, who once was mayor of Atlantic City, discussed that same concept. Whelan said, “I think a lesson from Revel is that while having a new product is nice, what’s also important is ‘the book’–the database for customers. They (Brookfield) have got recognized brands that have a ‘book,’ and I think that is a real asset.”
Whelan is one of those who believes Brookfield Asset Management has the right tools for such a plan. Brookfield manages the Hard Rock-branded casino in Las Vegas, while operating an Atlantis Casino in the Bahamas. The player databases from these properties could prove instrumental in drawing new customers to Atlantic City.
