Of all the encouraging figures in the most recent New Jersey gaming revenue report, perhaps the most eye-catching was the number 1,908,742. That was the revenue, in dollars, generated by the live sportsbook at Ocean Resort Casino in November, good for No. 1 by a healthy margin among Atlantic City casinos — more than doubling runner-up Borgata.
Ocean has a tough act to follow, but not in the traditional sense of a predecessor setting a high standard. Quite the opposite. Revel Atlantic City occupied that same space at the end of the Boardwalk for 29 inglorious months from 2012-2014, going down as one of the biggest all-time financial failures in casino history. It set a precedent that had many in the industry expecting Ocean to fail from the moment it re-opened with its new ownership, new management, and new name in June 2018.
It’s far too early to say what the ultimate fate of Ocean will be, but certainly there’s some reason for concern. In terms of overall casino win this past November, Ocean was ninth out of nine AC properties, with $11.7 million. The average tally for its eight competitors was $24.7 million.
But the folks at Ocean are confident their waves are swelling. And that sports betting win — which rises to more than $2.8 million if you count online betting through partner William Hill’s New Jersey site — is not just a bright spot, but one that should shine its light on other Ocean offerings.
“The ancillary benefit to the property has been incredible,” Ocean CEO Frank Leone tells NJ Online Gambling. “We have customers that come and they specifically stay in the hotel so they can spend time in the sportsbook. With the popularity of the sportsbook, you have food and beverage revenue that you generate, and hotel revenue that you generate. I would say that we’ve tripled our forecast revenue for the room since it’s been open.”
While some other AC casinos opened relatively modest temporary sportsbooks (Borgata, for example, still uses its cramped racebook as its sportsbook) or tucked their books somewhere in a hard-to-find corner, Ocean has found success by taking a bold approach. You couldn’t miss the William Hill Sports Book if you tried.
“Most properties that have a sportsbook, it’s kind of off the beaten path. You have to have a search party to find it usually,” Leone says. “Our property, it’s dead center, in the middle of the casino floor. So essentially, it’s on Main Street. You could fall off of a slot stool or a table game chair and land in the sportsbook.”
The inspiration for the location of the 7,500-square-foot space comes from what might seem at first glance like an unlikely spot: an illegal gambling house from several generations ago called The Rex Cigar Store in Steubenville, Ohio.
Steubenville is where both Jimmy “The Greek” Snyder and Dean Martin grew up — they knew each other as kids, in fact — and The Rex was in the middle of the underground gambling hotbed.
“Dean Martin actually dealt craps at The Rex, he worked in that illegal casino,” Leone recalls. “The sportsbook was located on Market Street in Steubenville, the busiest street in the city, and it was the busiest and most successful book, and that became the inspiration for locating it essentially on Main Street in our casino.
“We knew that the sportsbook could be the heart of the casino. It could essentially be the heart of it all. And that’s really what it’s turned out to be. Look, if you come in here on Friday, Saturday, Sunday, or you’re here for Monday night games or Thursday night games, there’s no experience like it.”
The permanent sportsbook at Ocean, which opened on Sept. 1, features about 300 seats with standing room for about 300 more, a center bar with eight TV screens, and giant boards and TV screens in every direction.
Ocean put serious effort and expense into it, and based on the revenue and handle numbers relative to its Atlantic City competitors, it’s paying off.
Here’s the catch, though, when it comes to going all in on a brick-and-mortar sportsbook: The big money will be online. In fact, it already is; in that November NJ Division of Gaming Enforcement report, 72.1% of the sports betting handle came via computer or mobile device.
Ocean understands that, and though its live revenue is more than doubling its digital betting revenue for now, Leone knows that won’t last.
“That will eventually flip,” he says. “We were late to the game from a mobile perspective, as far as launching the app, but now the app has been launched and we’re aggressively promoting the online component. And at some point, you’re going to see the online component, I believe, far surpass the land-based component.”
Leone says it’s not at all uncommon to see customers place their bets online for the convenience but then come and sweat the games live in the casino sportsbook.
He also says that an online sports betting expansion of sorts might be coming. Each New Jersey property with a sports betting license can have up to three online “skins,” and so far, Ocean is only using one.
“We’re tossing around the possibility of an Ocean-branded skin,” Leone says. “That may or may not come to fruition. But we’re thrilled to have William Hill as a partner, we feel very fortunate to be associated with them.”
It’s a constant battle for Ocean to leave the memories of Revel behind, but sports betting and online gaming certainly open up avenues that weren’t available to the property in its initial incarnation.
Leone refers to those gambling verticals as “the rising tide that will lift all boats in this market.” But he and his team aren’t stopping there when it comes to differentiating Ocean from Revel. They’ve reconfigured the casino floor, brought in a Topgolf Swing Suite, and just last month opened a Wahlburgers. They’re also expecting to be more competitive in the entertainment market than they were in 2018, after missing a key booking window by not taking ownership of the property until January.
“We’re pleased with the overall 2018 numbers for the property,” Leone says, “but, look, you always want to get better and it’s a work in progress.”
He says in its run as Revel, the property didn’t generate positive earnings before interest, tax, depreciation and amortization (EBITDA) in any single month of its existence, whereas Ocean, Leone claims, had positive EBITDA in the summer months of June, July, and August, and came close in the fall months. The CEO says, in fact, that a worse-than-expected hold on table games in those months was all that put the casino on the wrong side of that line — and that’s a struggle he’s fine with.
“Going forward, eventually, we’re gonna hold,” Leone says. “And those customers, they have our money in escrow, and eventually, if you treat them right and you provide them with a high-level service and you have the amenities and proper programming in place at the property, they’ll return and you’ll get that money back.
“The key is to provide the highest level of service to those customers and give them a reason to want to return.”