The first new casino to open in Atlantic City in a decade will also be its most recent to go bankrupt, as stated by Bloomberg News. The Revel Casino will file for bankruptcy by the end of the month of March, according to information provided by unnamed sources who are not authorized to publicly comment on the development.
The casino opened just last April but is already looking to utilize the bankruptcy filing to cut debts of about $1 billion. By comparison, Revel was built with a budget of around $2.6 million. Its opening happened to coincide, unfortunately for the developers and investors behind the project, with a revenue and tourism downturn in Atlantic City as more would-be gamblers head to Pennsylvania and its new casinos in Philadelphia, only about an hour's drive away.
Revel has reached a deal with its creditors ahead of the legal filing of the bankruptcy wherein the creditors will agree to trade equity in a newly reorganized company for debt. Revel just took a loan of $150 million back in December, amidst revenue struggles in a continuing weak economy.
Speaking of its negotiations with creditors last month, Revel CEO Kevin DeSanctis said, "The agreement we have reached with our lenders will ensure that the hundreds of thousands of guests who visit Revel every year will continue to enjoy a signature Revel experience in our world-class facility."
The cooperation between Revel and its creditors will be the key to Revel pulling out from under its fiscal woes, according to attorney Charles A. Stanziale Jr., who worked with Trump Resorts in 2009 when it was forced to put its own Atlantic City casino property into bankruptcy.
"I’m not sure the value of the casino can ever match the debt, so there has got to be some give between those holding the debt [and the company]," Stanziale told Bloomberg.
Atlantic City has seen its revenue decline for six consecutive years, with the numbers falling again in January to $205.6 million, a decrease of 13.2 percent, this on word from the New Jersey Attorney General. The city was also badly damaged by Hurricane Sandy, which ravaged the East Coast last fall and was particularly destructive to the state of New Jersey and its coastline.
There is a bright spot for the city's future, however. Late last month the state's first-term Republican Governor, Chris Christie, signed into a law a broad-reaching Internet gambling bill requiring the new online gambling industry to be centered in Atlantic City. Sponsors of the legislation view it as having the potential to preserve Atlantic City jobs and spare at least a few land-based casinos from the wrecking ball as well.
