As reported by: New York Times
The Borgata Hotel Casino and Spa's gamble that there was an appetite in Atlantic City for something beyond games of chance has apparently paid off. The operators of the Borgata have announced a $200 million expansion of their Renaissance Pointe location that will add not only slots and table games, but also spa, restaurant, nightclub and high-end retail space.

The announcement was part of a second-quarter earnings report released Wednesday by the Boyd Gaming Group, a Las Vegas-based casino operator, which along with MGM-Mirage owns the $1.1 billion Borgata.

Company officials had seen the casino - with 2,002 hotel rooms as well as spas and upscale shops - as a destination resort of a type more common in Las Vegas. They had brashly predicted that it would prove so effective in attracting visitors to Atlantic City and drawing from other casinos that expansion was inevitable.

While the Borgata has been thriving, the dozen other casinos in the city have barely stayed even with 2002 figures for house winnings and player losses.

"Borgata has now operated for four quarters, and every quarter since its opening has been better than the quarter before," said William S. Boyd, chairman and chief executive officer of Boyd Gaming. "When we developed Borgata we knew were building the right product for Atlantic City and the Northeast gaming market, but it is exceeding our expectations both in how fast its revenues and earnings are ramping up and in how quickly we need to expand the property." Because the Borgata is a joint venture, there is no clear indication of how its success affected the company's quarterly reports.

Officials of the state's Casino Control Commission agreed that the Borgata's performance had shaken things up in Atlantic City, where no new casino had opened in 13 years. At least four other casinos have recently announced plans for new hotel rooms, retail areas and other nongambling operations, said Linda Kassekert, commission chairwoman.

"I think we are beginning to feel more like Las Vegas," Ms. Kassekert said.

Robert Boughner, the Borgata's chief executive, said the expansion would include a three-story addition with space for 600 new slot machines, bringing the casino's total to 4,100; 36 additional gambling tables; and 56 new poker tables. Off-track betting counter slots would be doubled to 90.

The plans call for two more restaurants, bringing the total to seven; one casual dining spot, bringing the total to eight; and a large food court. Two nightclubs would be housed in the addition, along with a half-dozen retail shops. Mr. Boughner said space would be added to a spa operation that has had eight-week waiting lists for weekend appointments for its $150 facials.

Construction is to begin in December, and completion is projected for 2006.

Mr. Boughner said that although hotel occupancy was in "the mid-90 percent range," the company had no plans to add more rooms. That would have to wait, he said, until "we are absolutely certain that the tax climate in Atlantic City and the state of New Jersey as a whole would warrant our expansion."

Casino Control Commission officials noted that Atlantic City is updating the calculation of casino property values for property tax purposes and that the Legislature has passed a bill repealing a state tax on free hotel and nongambling services casinos offered to high rollers, although Gov. James E. McGreevey has not yet signed it. Ms. Kassekert said she expected the governor to allow the bill repealing the tax to become law.