|By Donald Wittkowski, The Press of
Atlantic City, Pleasantville, N.J.McClatchy-Tribune Regional News
Feb. 26, 2012--Morris Bailey, owner of Atlantic City's Resorts Casino Hotel, faces the pivotal decision of whether to put the company in the hands of the 29-year-old son of the late CEO or appoint a more experienced executive.
Dennis Gomes, Resorts' 68-year-old chief executive officer, died Friday of complications from kidney dialysis, creating a leadership void at the city's oldest casino. Gomes, a 40-year veteran of the Atlantic City and Las Vegas markets, was such a dominant figure at the casino that he was known as "Mr. Resorts."
Whoever replaces Gomes as chief executive officer will have to steer Resorts through Atlantic City's ultra-competitive market. The new CEO must transform Resorts into a profitable casino after three straight years of losses.
Resorts has been making progress under Gomes' turnaround plans, increasing its gaming revenue for each of the past five months.
"I'm sure it's going to take some time to regroup. He really was Resorts," said Linda M. Kassekert, chair of the New Jersey Casino Control Commission.
Serving as the casino's second-in-command has been Aaron Gomes, the executive vice president of operations and Dennis Gomes' son. Aaron Gomes appears to be the heir presumptive, but no decision has been made yet by Bailey on the new CEO.
"Right now, the executive team is in place and we are going to work directly with Morris Bailey and will be continuing with the operating and marketing plans we have," Sherry Amos, vice president of marketing for Resorts, said Saturday.
Gaming analysts describe Aaron Gomes as a bright and capable up-and-comer who has benefited from his father's casino experience.
"I do know that Aaron had one of the best mentors you could imagine, on a daily basis, from the youngest possible age. That alone speaks volumes," said Michael Pollock, managing director of Spectrum Gaming Group, a casino consulting firm.
Joseph Weinert, senior vice president at Spectrum Gaming, noted that the elder Gomes took pride in his son's abilities. Dennis Gomes often spoke glowingly about Aaron's development as a casino executive, portraying him more as his own man than an apprentice to his famous father.
"Aaron is a bright, young mind in the industry, well-regarded, and he certainly learned from one of the best, his father," Weinert said.
While speculation has focused on Aaron Gomes as the front-runner to replace his father, Bailey may be tempted to put the casino in the control of a more experienced executive at Resorts, or recruit someone from outside the company.
Steve Norton, a private gaming consultant who served as a senior executive at Resorts from 1976 to 1990, mentioned another possibility -- Bailey now taking on a bigger role in the casino's operations. Bailey, 73, a New York real estate magnate, has been the money man at Resorts, while Dennis Gomes oversaw the day-to-day operations.
"He may have to get more personally involved," Norton said of Bailey.
Bailey and Gomes teamed to buy Resorts in December 2010 for the very-reduced price $31.5 million after the casino defaulted on its mortgage and was taken over by lenders.
Norton said Resorts has other talent in its ranks if Bailey opts for a more experienced executive than Aaron Gomes. He said one candidate is Jon Arnesen, vice president and chief administrative officer. Arnesen, in his 60s, originally was hired by Norton at Resorts in 1987. He spent time at other gaming and hotel companies before returning to Resorts in 2010 under Dennis Gomes.
"Jon Arnesen has certainly much more seasoning than Aaron, but I don't know whether his background in gaming would satisfy Morris Bailey," Norton said.
Whatever happens, analysts say it will be crucial for Resorts to follow the same path -- or "vision" -- set by Dennis Gomes, who established a reputation as a turnaround artist for troubled casinos during his long career. To revive Resorts, Gomes rebranded the property with a Roaring '20s theme, remodeled the hotel rooms and added new attractions, such as an Asian gambling parlor and Atlantic City's first gay nightclub inside a casino.
"It's going to be very difficult, because they're going to have to achieve the same motivation and level of support that Dennis was able to achieve," Pollock said. "They can't take their eye off that vision. They have to make clear to their customers, employees, suppliers and other stakeholders that there is not a change of vision."
But even Gomes was tested by Atlantic City's slump. The sluggish economy and competition from rival casinos in surrounding states have combined to drive down Atlantic City gaming revenue from a peak of $5.2 billion in 2006 to $3.3 billion last year.
Resorts lost $18 million in 2009, $18.5 million in 2010 and nearly $16 million through the first three quarters of 2011. Final figures for 2011 casino operating profits will be released in April.
On the positive side, Resorts has posted higher gaming revenue in each month since September. For all of 2011, Resorts' gaming revenue -- the amount won from slot machines and table games -- was $154.2 million, compared with $154.5 million in 2010. Resorts' fractional decline in 2011 gaming revenue compared favorably to an average decrease of 7 percent for the entire industry.
Staff writer Emily Previti contributed to this report.
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