Exam 5: The Modern ERA - New Jersey

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In the early 1980s, Showboat Inc. was a small casino company that ran a popular locals casino in Las Vegas that featured a large bowling center. It could barely afford to get into the Atlantic City market, but was able to lease land from Resorts International in the urban renewal tract that firm had tied up in 1976. Officials effectively bet the company on the success of the project - a bet that paid off handsomely. The opening of its Atlantic City casino in 1987 thrust a small Nevada gaming company into the big leagues.There was some concern about the company and the affiliation some had with some of the less reputable elements from Las Vegas. For example, one director had been apart-owner of a major Las Vegas casino at a time when the mob controlled it. But he convinced regulators his stake was so small and he had no real contact with the mobsters that he really was qualified under New Jersey's law. The regulators, who were clearly aware that investment in the city had slowed to a trickle, agreed and all of its officers and directors were found qualified.Showboat initially marketed the property to a mass audience - the quarter slot player. It attracted people with blue hair, not blue blood, and did quite well. Instead of a theater, like other casino hotels, it had a bowling center that it hoped would attract the locals, just like it did in Las Vegas. But what worked in Vegas did not work in Atlantic City. The bowling center was never successful and the company turned its attention to expansion as a way of generating more business. It opened a new hotel tower in 1994, just at the time the city and state were looking for more rooms to support a new convention center that was being built. Four years later, the company was acquired by Harrah's which started another expansion that opened in 2003. As the market changed and the competition started drawing a younger crowd, Harrah's cut a deal with the House of Blues to open a venue within Showboat. The result was a facility where Wayne Newton fans felt comfortable were suddenly rubbing elbows with fans of Eminem and Nine Inch Nails. The expansion and new focus on drawing a younger crowd apparently worked. Revenues increased and the property started to shed a dowdy image without alienating its existing customer base.