Mohegan Sun Takes Over Atlantic City Resorts Casino Hotel

ATLANTIC CITY, N.J. — (Associated Press) - The tribe that owns the Mohegan Sun casino extended its reach in the East on Tuesday by taking over operations of Atlantic City’s oldest casino, planting itself in the region’s gambling mecca as an alternative to luring tourists to its slot machines and poker tables in eastern Connecticut.

If regulators approve the plan, it would expand the reach of one of the nation’s main tribal casinos. At the same time, the Mogehan Tribal Gaming Authority is trying to get a piece of the fledgling casino industry in Massachusetts.

By taking over management of Resorts Casino Hotel, Mohegan becomes the first American Indian-run firm to expand into the established gambling destinations of Atlantic City and Las Vegas.

“It’s a total reversal in the way the capital and management is going,” said David Schwartz, director of the Center for Gaming Research at the University of Nevada at Las Vegas. Before, it was Indian casinos trying to attract investment and management from Las Vegas and Atlantic City.

It also means Mohegan, which has its flagship casino in Connecticut and Pennsylvania’s Mohegan Sun at Pocono Downs, would have properties a few hours’ drive from New York City in three different directions — establishing it as an even bigger name-brand in the Northeast.

“The timing is right,” MTGA CEO Mitchell Etess said Tuesday in Atlantic City. “We have long looked at the Atlantic City market as an excellent opportunity.”

He said a bold citywide marketing campaign that invites people to “Do A.C.” and the May opening of the new Revel casino show the city is heading in the right direction, even as gambling revenues shrink.

Under the deal, Mohegan would invest an undisclosed sum in Resorts, where the Art Deco building in 1978 became the first place to gamble legally in the U.S. outside of Las Vegas.

The company would also manage the casino, which has had a tumultuous run even by the tumultuous standards of Atlantic City over the past six years.

Etess said the company, which is also seeking a casino license in Massachusetts, would have shared marketing programs for its three casinos, though Resorts would not get a name change.

In a gambling world where customer loyalty is rewarded, Etess said a Mohegan connection would mean that the people who visit its other properties would likely stay and play at Resorts when they visit Atlantic City.

The Jersey shore town flourished as a gambling resort for nearly 30 years, with revenues growing every year.

But in 2006, casino gambling came to nearby Pennsylvania. Coupled with a brewing recession, that spelled trouble for Atlantic City, which has seen gambling revenue dropping for six years.

Resorts was sold in 2010 to Dennis Gomes and Morris Bailey for $31.5 million.

Gomes, seen as a visionary in the industry, rebranded the casino in a roaring ‘20’s theme to capitalize on the HBO series “Boardwalk Empire” about Atlantic City in the Prohibition era.

But Gomes died in February and his son, Aaron, has been helping to run the casino. Etess said at a news conference with Aaron Gomes sitting nearby that he hoped that Gomes and other current executives and lower-level employees would remain.

Bailey said Tuesday that he and Dennis Gomes began searching for a management partner soon after they bought Resorts.

Last month, Resorts announced another new venture, teaming with Jimmy Buffett to develop a Margaritaville-branded entertainment complex in part of the casino. The Mohegan Sun’s Connecticut casino, which opened in 1996, already has a Buffett-themed restaurant.

James Kamel, a casino industry analyst, said he expects Atlantic City’s 12 casinos to undergo consolidations. By being in the city, he said, Mohegan sets itself up to be a player when that happens.

And UNLV’s Schwartz said the price is probably right for the company. Buying into an existing casino he said, is far more affordable than buying one whole.