(The following article by Thomas Barlas was posted on the Press of Atlantic City website on June 21.)
ATLANTIC CITY — They know gambling.
Now, they’re getting a lesson in something completely different.
“We’re just learning about railroads,” said John Payne, president of Harrah’s Atlantic City operations.
A day after the announcement of a casino-funded Atlantic City-New York City express train run, gaming officials admitted they still have a lot to figure out before the train begins running late next year.
At a news conference at the Atlantic City Rail Terminal on Tuesday, officials with casinos who are bankrolling the train line said they have to figure out where the train will stop, how to market it and what to offer riders.
They at least have a target round-trip price: $100 or less.
“To go round trip from New York for under $100 is a fair price,” said Larry Mullin, chief operating officer for the Borgata Hotel Casino & Spa.
Casino officials hope so, given their investment in the line.
Borgata, Harrah’s and Caesars will form a partnership called Atlantic City Express Service, or ACES, and kick in $15 million to buy eight bi-level rail cars. The Casino Reinvestment Development Authority, or CRDA, will provide $4.5 million to lease four diesel locomotives from Amtrak for the line’s three-year trial period. ACES and the CRDA will jointly provide another $4 million annually for operating costs.
At least one gaming analyst believes the line could be good for the casinos.
Based on the average win figures for a 12-month period ending in May, “we calculate the train service could conservatively contribute approximately $45 million in gross gaming revenue on a yearly basis,” according to Adam Steinberg, a gaming analyst for Morgan Joseph & Co.
Steinberg said additional revenue would be generated by hotel, entertainment and food and beverage sales.
“Since the average (win) is higher on weekends, we believe the potential contribution could be somewhat more meaningful,” he said.
Service will involve 18 express trains that will run from about noon on Friday through Sunday night. Three trains will run Fridays, eight on Saturdays and seven Sundays.
The train will run between the Atlantic City Rail Terminal and New York’s Penn Station. It will make one or more stops in New Jersey, with the final number based on market demand. The train won’t stop in Philadelphia.
NJ Transit estimates the trains will provide round-trip transportation for about 1,100 people each weekend.
Casino and NJ Transit officials say one reason for optimism is that line riders will find more to do in Atlantic City than those who took Amtrak’s “Gamblers Express” — a line that also began with high hopes but ended in 1995 after a six-year run that wound up being one of Amtrak’s biggest financial flops.
Casinos want to tap the New York market in a continuing effort to woo younger, free-spending gamblers to a city that is reinventing itself from a low-rolling daytripper town to a more affluent overnight tourist destination. The main difference between the Gamblers Express and the proposed express run is that casinos are buying into the line and will pick up all operating costs.
NJ Transit Executive Director George Warrington said that leaves NJ Transit with little liability should the line fail, and the opportunity to take control of what he called the “state of the art” multi-level cars bought by the casinos.
The main goal, casino officials said Tuesday, is to get as many gamblers from New York City to Atlantic City on the line as possible.
While the marketing base is still being discussed, Payne said it in part involves Manhattan residents who don’t have cars.
Otherwise, Mullin said, the operation will target as many New York City residents as possible.
“We believe we’re going to get a lot more people,” he said.
Casino officials admitted that the creation of ACES is unusual, given that the city’s gaming halls traditionally battle each other for customers.
Payne said the new partnership is an example of how competing gaming halls can “sit at the table” and figure out ways to grow the industry here.