Five years ago, there were mixed emotions in Atlantic City as two casinos that had failed and shut down were set to reopen with new owners and new identities.
People were glad that the 6,000 jobs that were lost when the former Trump Taj Mahal and Revel casinos closed were coming back. Yet some worried that the market that forced them to shut down in the first place could not handle two additional casinos, and that reopening them would be repeating the costly mistakes of the recent past.
Five years later, those two casinos — the Hard Rock and the Ocean Casino Resort — have become among the most successful in Atlantic City.
And while they have taken market share from their seven competitors, no one has gone out of business and the market as a whole seems to be adjusting to the new reality, in which there are three dominant casinos — and everyone else. Hard Rock and Ocean still have not dethroned the Borgata as Atlantic City's top casino, but they have taken some of its market share.
On June 27, 2018, the former Trump Taj Mahal reopened as Hard Rock, and the former Revel reopened as Ocean.
“If you were a Hard Rock or Ocean employee, it was an exciting, opportunistic time,” said Mike Sampson, Hard Rock's general manager, who has worked there since the day it opened. “If you were in some other place, there was some nervousness as to what might happen.”
What happened is that the two newest casinos have become among the most successful in town.
Last year, in terms of money won from in-person gamblers, the Borgata won over $724 million. Hard Rock was second at $492 million, and Ocean was third at $356 million. When internet and sports betting money is included, Golden Nugget ranked second, due to a strong online operation. But those revenue streams must be shared with other parties like sports books and tech platforms, and are not solely for the casinos to keep.
Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies the Atlantic City gambling market, said Hard Rock and Ocean have helped grow the overall market, even as individual properties lost share to them.
The Borgata was particularly affected. Hard Rock and Ocean both hired executives from Borgata, and went after the luxury segment of the market, which Borgata has long dominated. The Borgata declined comment.
In terms of total net revenue, Bokunewicz said Hard Rock and Ocean’s respective 17.5% and 13.4% market shares seem to have come primarily at the expense of the Borgata, which lost 9.2 percentage points in the last five years, down to 22.3%.
Perhaps no casino was less expected to succeed than Ocean, the successor to the ill-fated Revel, which shut down in 2014 without ever having come close to turning a profit. And for awhile, it looked as though history was repeating itself.
Ocean got off to a slow start and ran out of money under the ownership of Colorado developer Bruce Deifik, who bought the casino sight unseen. He was in the process of turning over his majority ownership of the casino to New York hedge fund Luxor Capital in April 2019 when he was killed in a car crash in Denver.
Luxor installed a new management team and focused on profitability. In 2021, Luxor sold a 50% interest in Ocean to the Ilitch family, which owns professional sports teams, a nationwide pizza chain and a casino in Detroit.
“We were definitely the underdog,” said Kelly Burke, Ocean's senior vice president. “Every month it was ‘how are we going to pay the next bill?’ But the owners felt that if there ever was a time to reinvest and start over, this was the time.”
The owners pumped millions into Ocean for projects like the completion of hundreds of half-finished hotel rooms and a casino floor makeover.
By the end of 2022, Ocean had a $96 million gross operating profit, up 5.5% from a year earlier. Hard Rock's profit was $128 million, up nearly 20%, compared with $140 million for Borgata, which was down nearly 20%.
“Hard Rock and Ocean each took on the unenviable task of rehabilitating shuttered casinos that sat as a blight on the northern end of the Atlantic City Boardwalk,” Bokunewicz said. “They re-energized the local casino market and significantly contributed to a period of reinvestment and development for the city overall. It is a bit hard to imagine where Atlantic City might be today if not for the events of the summer of 2018.”
