Hard Rock Bets On Jersey
Hard Rock International announced plans to build a $300 million casino-hotel in Atlantic City, betting on a bill introduced March 22 in New Jersey’s legislature that would permit new resorts with as few as 200 rooms.
The current minimum is 500 rooms. But former Atlantic City mayor and current state Sen. James Whelan introduced the bill saying the struggling resort city desperately needs new gaming outlets, but the current $1 billion to $1.5 billion construction cost of mega-casinos is too high a cost of entry.
Hard Rock International, wholly owned by the Seminole Indian tribe of Florida, announced the lower threshhold would enable it to enter the market with a $300 million casino-hotel on the south end of the Atlantic City Boardwalk.
“We are intrigued by the newly proposed legislation, which makes entering the marketplace more manageable,” said company chairman Jim Allen. “Despite current headwinds, Atlantic City remains the country’s second-largest gaming market and would be an exciting location for a Hard Rock Hotel and Casino.”
The company said its project would include “an ultramodern gaming floor, luxury hotel, world-class dining and entertainment,” a beachfront pool and a spa.
Atlantic City’s most successful casinos each have about 2,000 rooms – part of a strategy of exceeding the minimum requirements to dominate the market.
So far the strategy has worked. The Borgata Hotel Casino & Spa, Harrah’s Atlantic City and the Trump Taj Majal Casino Resort each have about 2,000 rooms and are routinely among the leaders in revenue each month.
But another $1 billion mega-casino called “Revel” has sat unfinished for more than two years and needs new financing before it can be completed.
Operators of the smaller casinos would pay a higher tax rate – more than 14 percent, compared with just more than 9 percent for casinos that had to build larger hotels to get licensed.