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ATLANTIC CITY - Bally's Atlantic City once was the runner-up to Borgata Hotel Casino & Spa in earnings power among the resort's 11 gaming halls.

At its peak, Bally's churned out more than $65 million in monthly revenue, but those pre-recession days are long gone. In the past year, it has slipped from being the second-highest grossing casino to No. 3 in a troubling trend that has wiped away millions in revenue.

Harrah's Entertainment Inc., Bally's owner, blames the decline largely on the slump in the convention trade, so it is planning to refurbish the casino hotel to make it more attractive to business customers.

"Bally's is our convention facility," said Don Marrandino, president of the four Atlantic City casinos operated by Harrah's Entertainment. "Now we will look to rejuvenate that space."

A glimpse at casino revenue figures shows how the convention downturn has helped other properties overtake Bally's. In October, Borgata held its usual place as the top grosser, but Caesars Atlantic City was second and Harrah's Resort third. Bally's was fourth, grossing $38.3 million in October, down 6.6 percent from a year ago.

Through the first 10 months of this year, Bally's is in third place with gross revenue of $405 million, off 17.2 percent compared with the same period in 2008. Harrah's has grabbed the second spot at $413.5 million, and Caesars is fourth at $390.5 million. Borgata is far ahead of everyone else at $593.6 million.

Bally's decline has not gone unnoticed by Marrandino, a former Las Vegas gaming executive who recently took charge of Harrah's Eastern Division. He is concerned about the performance of what Harrah's says is the biggest convention earner in town.

"The convention business has been affected more than any other segment," Marrandino said of the soft economy.

Opened in 1979, Bally's is one of Atlantic City's oldest casinos. One gaming analyst noted that the property is showing its age.

"It has been upgraded in portions. But overall, it could use a facelift in order to be competitive," said Harvey Perkins, senior vice president of Spectrum Gaming Group, a Linwood-based casino consulting firm.

Renovation plans include freshening up Bally's convention facilities, refurbishing the 500-room Claridge hotel tower and other upgrades that Marrandino declined to make public at this time. Harrah's did not disclose the cost of the project.

The sprawling Bally's property is an amalgamation of buildings and themes patched together over the years. The complex incorporates the Victorian-era Dennis Hotel, the Depression-era Claridge, the modern glass-covered Bally's tower and the cowboy-themed Wild Wild West Casino.

Bally's refurbished the Dennis Hotel last year, spending $19 million to renovate the 330 rooms and another $4 million to spruce up the facade. Other recent improvements to Bally's include an Asian gaming area, the Diamond Lounge and new bars and restaurants, Harrah's spokeswoman Alyce Parker said.

Perkins cautioned that Bally's has a lot of casino capacity - perhaps too much in an industry hurt by the weak economy and tighter spending by its customers. He suggested that Bally's may have to close the Wild Wild West or use it only on a seasonal basis.

"If anything, the space could be shut down permanently, as they have done with much of the casino space in the Claridge," Perkins said. "It's really an unnecessary casino space at this time."

Marrandino hinted at changes ahead for the Wild Wild West but declined to say what is being planned.

The Claridge, meanwhile, will have its rooms redone as part of Bally's renovation. Claridge operated as a separate casino hotel before it was folded into Bally's in 2002. Marrandino said the Claridge will take on a boutique atmosphere, comparable with the luxury W Hotels chain, when its rooms are refurbished.

"It will have more of a W vibe to the hotel. An older W," he said.

Before it was transformed into a casino in the 1980s, the 24-story Claridge made its reputation during the Depression as the elegant "skyscraper by the sea." Marrandino recalled when his grandfather played the clarinet and saxophone in the Claridge house band.

The Claridge's stately brick exterior was marred in 2004 by a coating of moisture sealant that runs down the Pacific Avenue side of the building like a giant reddish scar. Marrandino said the renovation project will remove the sealant to make that part of the building compatible with the rest of the facade.

Contact Donald Wittkowski:

609-272-7258

DWittkowski@pressofac.com

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