Atlantic City commission approves license for new owners of Resorts

"We still like the investment and the product," Bailey said of the decision to buy Resorts. "But it is a challenge to operate in a market that is being exacerbated by the economic conditions in this country."

Resorts continue to be supported by a line of credit from Bailey. Timothy Ebling, Resorts' chief financial officer, said Bailey initially gave Resorts US$ 5 million, then contributed an extra US$ 7 million later on through the credit agreement.

During his testimony at Resorts' license hearing, Gomes laid out his blueprint to continue the casino's comeback in the struggling Atlantic City market. In two or three weeks, Resorts will complete the renovation of all 480 hotel rooms in the Ocean Tower, a key part of its strategy to attract more overnight guests. "It looks like a brand new tower," Gomes said.

Resorts increased its hotel occupancy from about 62 % to 73 % in the past six months. For the summer, the hotel is running at about 100 % capacity, Gomes said.

Resorts is talking to development partners about other possible new attractions to enhance its business. They may include new restaurants and a glass-enclosed beach bar that would operate year-round, Gomes added.

A crucial part of Resorts' turnaround was its rebranding into a Roaring '20s theme to capitalize on the national publicity of the hit HBO series "Boardwalk Empire," which is about Prohibition-era Atlantic City. The old Haddon Hall hotel, dating to the 1920s, was used to create Resorts when the casino first opened in 1978.

"Where else to create a Roaring '20s theme than in a building that was here in the 1920s?" said Linda M. Kassekert, chair of the Casino Control Commission. "Back then, Haddon Hall was a place where flappers danced and rumrunners conspired. Mr. Gomes is trying to recapture some of that mystique throughout the property."

Kassekert drew laughs from the audience by joking that Gomes bears an uncanny resemblance to Nucky Thompson, the fictional 1920s Atlantic City crime boss played by Steve Buscemi in "Boardwalk Empire."

Resorts unveiled its new theme during Memorial Day weekend. Hotel rooms have been remodeled with Art Deco touches, employees are decked out in snazzy new costumes reminiscent of the Roaring '20s and a new gay nightclub called Prohibition is now open.

Prohibition is the first gay nightclub in an Atlantic City casino. Gomes characterized the club as an overwhelming success, saying that it has attracted new customers and generated extra business for the gaming floor. "From a revenue standpoint, it's doing tremendous," Gomes said.

Resorts' retheming has not been without controversy, however. Cocktail waitresses are clad in revealing costumes inspired by the outfits worn by the flamboyant flapper girls of the 1920s. Two groups of middle-aged former cocktail servers have sued Resorts, claiming they were fired because they weren't considered sexy enough to wear the new costumes.

Local 54 of unite-here, Atlantic City's largest casino union, has criticized Gomes for slashing wages. Gomes explained that Resorts had to reduce its operating costs just to survive. "As opposed to being in a hole, we found we were somewhat closer to the bottom of the Grand Canyon," he said of Resorts' financial plight when he took charge.

Resorts posted an US$ 18.6 million operating loss last year, followed by a US$ 5.3 million loss in the first quarter of 2011. Gomes and Ebling predicted the casino will begin to turn a profit this summer.

Resorts was one of just four Atlantic City casinos to post higher gaming revenue in June. In addition, Resorts is the only casino to have higher gaming revenue through the first six months of 2011, although just fractionally.

"Our gaming revenue has increased over industry averages, but we still have a long way to go," Gomes said.