The Atlantis' annual license to operate a casino-hotel in New Jersey will expire Monday, and the commission is holding hearings this week to determine whether the gambling hall is financially stable enough to continue operating. The commission must determine, among other things, whether the Atlantis will remain able to pay its employees and cover the cost of progressive jackpots and other large winnings by gamblers.
The Atlantis, which is hampered by an unpopular three-story casino layout, filed in November to reorganize under Chapter 11 of the U.S. Bankruptcy Code. All legal actions and debts against the casino are frozen while the Atlantis reorganizes, and two attorneys testified yesterday that the casino-hotel might well emerge a stronger company.
Hood tried to assure the five members of the Casino Control Commission that the Atlantis was in no danger of collapsing. She said the amount of cash in the casino-hotel's bank accounts had risen from $500,000 in November to $4 million today. She also told the commissioners that the gambling hall expected to have a "positive cash flow" of $14 million in 1986.
In an interview, Hood said the $14 million did not represent profit, but rather cash on hand before paying interest, expenses and depreciation. The interest payments have been deferred because of the bankruptcy-court action, and Hood said the casino-hotel would probably lose about $9 million this year - a $26 million improvement over 1985.
Atlantis officials have said that roughly 600 employees have either resigned, retired or been laid off recently, and that the company has cut $22 million from its annual budget. Hood said yesterday that the first thing she did upon assuming the presidency of the Atlantis in October was reduce costly and ineffective programs aimed at attracting high-rolling gamblers.
"Shortly after I came to the Atlantis, I realized I'd have to get a handle on expenses immediately," said Hood, who is also president of Elsinore Corp., which owns the Atlantis. "A disproportionate share was being spent on programs to attract high-rollers. . . . We found we did have a customer base of middle, average-American-type people who wanted to come to our casino."
It is that middle group that the casino now seeks to attract, Hood said. Programs aimed at high-rollers, such as hiring big-name entertainers and bringing in junkets from out of town, have been stopped, she said. In addition, Hood said the Atlantis had introduced a "much more restrictive" policy of giving gamblers free food, rooms and beverages, known as "comps."
The hearings are scheduled to continue today.