Top gaming executives draw up growth plans

Gary Thompson

Wednesday, June 9, 1999 | 11:38 a.m.

Two top gaming executives gave bullish predictions for gaming Tuesday at a lawyers' conference on industry issues.

Aztar Corp. Chairman Paul Rubeli said Atlantic City is poised for explosive growth if casino operators build more hotel rooms there, while Boyd Gaming Corp. President Don Snyder said adding non-gaming attractions to new resorts will capture a much larger share of the leisure-travel market.

Snyder said consolidation and strategic affiliations will play a significant role in the gaming industry's evolution as the new millennium begins. Indian gaming will be the most important growth factor in new markets, he said.

"The quality of management and the ability to execute a complicated business strategy will be critical to success," he said.

That strategy must encompass efforts to broaden market bases, product mix and marketing campaigns because the traditional customer base isn't large enough to support all the new projects coming on line around the country.

"We have to rethink how we compete as an industry," Snyder said. "By broadening our appeal to the whole leisure market, we can tap into a customer base that's seven times as large as the gaming market.

"But it's not a theme thing, it's an experience thing. We have to offer a total experience to the customers ... to provide more of a complete vacation identity."

Rubeli said commercial gaming revenues nationwide have more than doubled since 1992, and that the biggest growth has occurred outside Nevada. He predicted gaming revenues from the Northeast region, which includes Atlantic City, will surpass the total from Nevada within five years.

"This is a business that doesn't carve up a finite amount of dollars spent on gambling," he said. "Atlantic City's revenues have grown despite the Indian casinos in Connecticut and the legalization of slot machines at race tracks in Delaware."

Rubeli said the major limitation to revenue growth in Atlantic City is a lack of hotel rooms.

"In Las Vegas, which has 110,000 hotel rooms, 85 percent are sold for cash, while 15 percent are comped to big players," he said. "In Atlantic City, where we have just 12,000 rooms, only 35 percent are sold for cash."

The Aztar executive said 42 million adults live within a 300-mile radius of Atlantic City. "Right now, we attract about 3 million to 4 million of that total, or about 8 percent. We have the potential for 25 percent to 30 percent penetration if we can get enough hotel rooms."