It's been a dizzying six months for the nation's first casino to open outside Nevada. Now it has culminated in a permanent casino license for the new regime.
The New Jersey Casino Control Commission on Wednesday granted the license to Resorts and its co-owners, Dennis Gomes, a former Nevada casino regulator credited with helping drive the mob out of Las Vegas, and Morris Bailey, a deep-pocketed New York real estate investor.
"I'm just excited and really happy," Gomes said. "I can't wait to get back to the casino and kick some butt."
Resorts was within days of having to close last December when Gomes and Bailey took it over. Gomes said the casino was in such a big hole it rivaled "the Grand Canyon."
When it opened its doors on May 26, 1978, Resorts became the nation's first casino outside Nevada. For years, it was fantastically profitable. But as more casinos opened in Atlantic City - there are now 11 - Resorts' share of the market fell. By the time casinos started opening in the Philadelphia suburbs in late 2006, Resorts already was in a steep decline, an afterthought for all but the bus-riding senior citizen slots player who remains its typical customer.
Gomes has a long career in the casino industry, with management jobs at the Tropicana Casino and Resort (where he famously made a tic-tac-toe-playing chicken into a top draw), Trump Taj Mahal Casino and Resort, the Golden Nugget in Las Vegas, and Hilton Nevada's properties. And his tenure as Nevada's top casino corruption investigator was chronicled in the 1995 Martin Scorsese film "Casino."
So when Resorts' previous owners, the Los Angeles hedge fund Colony Capital LLC stopped paying their mortgage and turned the casino's keys over to their lenders in 2009, Gomes saw an opportunity where others saw a money pit caught in a death spiral. He and Bailey, who had tried to open a casino in Pennsylvania, bought Resorts for $31.5 million, a fraction of the $140 million Colony paid for it in 2001.
The first thing he did was slash expenses, mostly payroll. The 2,000 workers on the payroll were all made to re-apply for their jobs. Ultimately, more than 200 were laid off, and nearly 500 others had their pay slashed by as much as 52 percent.
When Gomes took over, it soon became clear just how far things had fallen at Resorts. The casino's revenue from slot machines and table games was down 19 percent since the beginning of the year; it was taking in less than $436,000 a day, compared with $538,000 a day a year earlier, ranking it 10th out of Atlantic City's 11 casinos.
Resorts posted a gross operating loss of $18.5 million last year, a worsening of nearly 41 percent from 2009.
The first step was dreaming up a new identity for Resorts, taking what was widely considered a liability - its 90-year-old building that's smaller than the most successful casinos - and trying to turn it into a plus. Gomes and his staff rebranded Resorts in a roaring '20s theme, in part to capitalize on the success of the hit HBO series "Boardwalk Empire" about Prohibition-era Atlantic City. Because the place was built in the 1920s, it didn't need a makeover to fit in perfectly with the new theme: the marble floors and polished brass fixtures are luxurious reminders of that bygone era.
It didn't go completely smoothly; two groups of female cocktail servers sued the casino after they were let go, allegedly for not looking sexy enough in the new skimpy costumes. Celebrity lawyer Gloria Allred is representing some of them.
And six other workers who lost their jobs also sued, alleging age discrimination, among other things.
The casino still is losing money, though Gomes says he expects to reach the break-even point soon. In June, it was one of only four Atlantic City casinos to post an increase in monthly revenue compared to June 2010. It was up nearly 1 percent.
Timothy Ebling, Resorts chief financial officer, said the casino expects to have a positive cash flow in July and August.
Gomes said the casino hopes to add new restaurants, fix its aging roof, and possibly build a year-round glass-enclosed beach bar.
Under new rules New Jersey adopted earlier this year, Resorts' new license is considered permanent. It will be reviewed every five years by the state Division of Gaming Enforcement, but will only need to be renewed if major problems crop up.