Jun. 27, 2008 - ATLANTIC CITY -- Bill Boyd ignored the naysayers and, with MGM Mirage, placed a $1.1 billion bet here five years ago to build a Las Vegas-style megacasino, the Borgata, in the city's Marina District.

Almost since the day it opened in July 2003, the Borgata Hotel Casino & Spa has been Atlantic City's most profitable casino. And Boyd, as executive chairman of Boyd Gaming Corp., is rolling the dice once again.

Boyd and his top executives will officially unveil the $400 million Water Club -- an 800-room luxury hotel that sits next to the Borgata -- at noon today. The property, which seems to have everything but a casino floor, is expected to accelerate Atlantic City's transformation into an overnight destination.

"The Water Club will fill an untapped niche in this market for a cosmopolitan hotel experience," Boyd said earlier this week, "one that will provide an escape for Atlantic City customers seeking an unforgettable experience."

The new hotel provides something else, too.

"Eight hundred more rooms is a big deal for us from a convention and marketing perspective," said Jeffrey Vasser, executive director of the Atlantic City Convention and Visitors Authority, the resort's chief marketing arm. "We just need more room inventory to accommodate the meeting planners that are reaching out to us to hold their conventions here."

The Water Club is the second hotel among a triumvirate to open in Atlantic City this year. Harrah's Resort casino added the 960-room Waterfront Tower in March as the centerpiece of a $550 million expansion. Trump Taj Mahal will roll out its $255 million, 786-room tower over Labor Day weekend.

Combined, the three towers will add about 2,500 rooms to the market and push Atlantic City's current inventory to more than 17,500 rooms, according to the New Jersey Casino Control Commission.

The Water Club, adorned with limestone columns, marble detailing, and plush handmade rugs, is claiming bragging rights as the most luxurious among the trio.

While the ribbon cutting is today, the hotel has been renting rooms since June 4, and was sold last weekend.

The hotel features five pools, a 38,000-square-foot spa on the 32d floor, fine-dining restaurants, six retail stores, and luxury lofts. The hotel employs 800 workers. The 1-to-1 employee-to-room ratio will ensure close and personal service, says management, and comes with the average $300 to $499 per-room weeknight rate in the summertime, and $629 per room on weekends.

For Boyd Gaming, today's ribbon cutting marks the completion of a $600 million expansion at the Borgata.

MGM also plans to build a $5 billion gambling palace on land near the Borgata that will be connected to the casino by an enclosed walkway.

"The significance to Boyd is that [the Water Club] will help make a successful property, the Borgata, even more successful" said gambling analyst Andrew Zarnett of Deutsche Bank AG in New York. "They [management] were constantly in need of additional rooms, and the Water Club will satisfy much of the excess demand."

On whether the Water Club will trigger more projects of similar scope, analyst Zarnett said it was "too early to tell" because of other factors.

"There are a number of major issues facing Atlantic City, including a consumer with significantly less discretionary income, continued [slots] supply additions from Pennsylvania, and a full smoking ban set to hit the city on Oct. 15," he said.

But soaring fuel costs may actually work to the Water Club's and Atlantic City's favor.

Wall Street analysts issued reports earlier this week warning of a difficult year for Las Vegas as rising jet-fuel costs exert pressure on major airlines to cut flights and seating to the nation's No. 1 gambling destination.

Who better to benefit than the No. 2 gaming market?

Said Borgata chief operating officer and president Larry Mullin, "Fact of the matter is, people that are usually getting on airplanes may not be getting on airplanes, and might decide this is a great way to change out that budget."

Contact staff writer Suzette Parmley at 215-854-2594 or [email protected].

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