Revel Atlantic City May Soon Be Up For Sale
Revel Atlantic City, which was bankrupt within a year of its opening to much fanfare in Spring of 2012, may soon go up for sale, according to a recent report by Bloomberg News.
The operators of Revel are said to be “exploring strategic options” as they work to move the property – operating at an $81 million loss so far in 2013 – into the black.
Property emerged from bankruptcy last Spring
When it opened, Revel was attempting to offer a different type of hotel and resort experience than is the norm in Atlantic City, a destination with twelve land based casinos. The oldest, Resorts, dates back to 1978.
It cost a whopping $2.4 billion to construct and develop Revel.
Unfortunately the attempt to introduce a luxury resort experience in Atlantic City was poorly timed; in recent years the dozen casino properties in Atlantic City have limped along as nearby states, particularly Pennsylvania, were able to successfully poach gamblers and their attendant revenue by constructing brand new casinos offering more amenities. Since peaking in 2006, the New Jersey casino economy has seen declining revenue each consecutive year.
Revel was able to quickly enter and exit from bankruptcy protection earlier this year by entering into a deal with its creditors that essentially swapped equity for debt. The now-owners of Revel, which has attempted to offer innovative promotions to lure gamblers in addition to changing certain policies – including doing away with a previously-enforced ban on smoking – to attract the more typical Atlantic City patron, have also received $75 million in additional financing for the property, according to Bloomberg’s report.
Atlantic City continues to struggle even as regulated iGaming start looms
At the time that Revel emerged from bankruptcy, officials said that they hoped to have the property operating profitably by the Summer of 2014. Whether the casino is still on track to meet that goal seems doubtful, as word out of Atlantic City continues to be grim this year, with monthly revenues still on the decline.
One bright spot for the city is that revenue numbers are expected to be better for the city’s twelve casinos for October and November, but that is merely because last year’s Hurricane Sandy, a storm that pummeled the New Jersey coastline and from which residents are still recovering, forced casino patrons away during the same months in 2012.
The other bright spot is, of course, the November 26 launch of real money regulated online wagering in the state. New Jersey regulators have announced a flurry of license approvals and transactional waivers recently as the go date for iGaming now stands at under two weeks for the soft launch period, set to begin on November 21.
Should Revel decide to hang a “for sale” sign out front, it won’t be alone. Last week news broke that another struggling Atlantic City property, the Atlantic Club Casino Hotel, had on Wednesday declared bankruptcy ahead of a sale at auction.