Borgata CEO: Resort will grow A.C. market

John Curran

Wednesday, Feb. 12, 2003 | 9:47 a.m.

TRENTON, N.J. -- The first new hotel-casino in Atlantic City in 13 years will ultimately mean business for other casinos, too, even if they lose gamblers and employees to it in the short term, its chief executive predicted Tuesday.

The Borgata, a $1 billion colossus slated to open this summer, will bring a dramatic new product to the Atlantic City market, generating visits by gamblers and others who don't normally venture there, said CEO Robert Boughner.

"In our business, historically, new supply has created new demand. We absolutely believe that will be the case here," he said in an interview with the Associated Press.

"We're creating a destination," he said. "I don't believe that Atlantic City, by the addition of Borgata, fundamentally changes as destination, even though Borgata is a fundamentally different destination within Atlantic City."

In a wide-ranging interview with AP correspondents and editors, Boughner also predicted Gov. James E. McGreevey's plan to impose new taxes on the casino industry will not be approved as proposed and said New Jersey would make a mistake if it permitted slot machines or video lottery terminals at the Meadowlands.

"To say, on the one hand, that you want to encourage growth and development in Atlantic City -- there's not exactly been a lot of takers on that proposition -- and then allow some entity to get in the game for a very nominal amount of money, it's not an even playing field. That's really our objection to it," Boughner said.

The 2,002-room Borgata, a joint venture of Las Vegas casino companies Boyd Gaming Corp. and MGM MIRAGE, will be the first new casino-hotel in Atlantic City since the opening of Trump Taj Mahal in 1990.

Though it is months from opening, it is already cutting into its competitors' business: Of the 35,000 people who have applied for Borgata jobs, about 15,000 are employed by Atlantic City's existing 11 casinos.

Gamblers will likely follow suit in flocking to the new game in town.

With its glassy 480-foot hotel tower, 7,000 parking spaces and a landscaped 30-acre site in the city's marina district, Borgata will be a marked departure from the "box with slot machines" that Atlantic City's other casinos offer, Boughner said.

"We are bringing a Las Vegas-style operation to Atlantic City, and we believe it will be very well-received," he said.

Asked if Borgata might drive other casinos out of business, Boughner was circumspect.

"It's very had to predict the impact our business will have on others. Frankly, we don't spend much time thinking about that. The companies that have strong balance sheets, strong infrastructure and strong management will continue to do well."

He dismissed the competitive threat posed to Borgata and Atlantic City by online gaming and slot machine-equipped racetracks, saying they offer only a portion of the overall experience available at casinos.

And he was reluctant to criticize McGreevey over the tax increase plans that have infuriated Atlantic City executives, deferring comment to the Casino Association of New Jersey, which is leading opposition to the plans.

McGreevey has proposed boosting the state's 8 percent tax on casinos, to 10 percent, and adding a tax on freebies given to gamblers by casinos.

"That is the governor's tax proposal," Boughner said. "As we all know, it has to go through the Legislature and ultimately be approved. In our view, we don't believe what's currently on the table will be approved."