Revel Casino Is Negotiating with Potential Buyers Prior to Closure Deadline
Revel Casino is still negotiating with potential buyers, despite an earlier announcement it plans to shut its doors next month. Casino representatives told a bankruptcy judge a different story, though.
The information was released along with a notice adjourning the auction of Revel Casino, which is set for this coming Thursday. The negotiations are said to be with “certain potential bidders”. If no deal can be worked, then Revel plans to shut down operations on September 10.
Revel Winding Down Revenues
Already, the casino is winding down operations. If the September 10 deadline is reached without a new ownership group, then it would become much harder to reopen. When a business with 1,000 trained employees closes, most of the staff moves on to find new jobs. Many employees move out of the area in order to find work.
The paperwork did not specify either way, but experts who saw the filing say it does appear to “leave the door open” for successful bidders to re-open the Revel Casino as a non-gambling facility. When asked to comment by ABC News, Revel Casino officials and attorney would not comment.
July 2014 down 11% from July 2013
Last week, it was announced that Atlantic City casinos collected 11% less in July revenues than they did the previous July. A certain drop-off is to be expected in the summer, because the warm weather months include a lot of vacation travel and outdoor activities. Many gamblers find other things to do in the summer, which is why revenues are compared year-to-year and not month-to-month. Such a steep decline in revenue is particularly bad news. One less casino was operating this July, due to the loss of the Atlantic Club to closing back in January 2014. Even if Atlantic Club is removed from the figures, the decline from 2013 to 2014 was 6.6%.
The statistics include the online gambling revenue, which was up $500,000 from the $9.6 million in winnings in June 2013. The total revenue for July 2014 was $274 million, while it was $297.1 million in July 2013.
Fitch Ratings: “Illustrates the Depth of Distress”
Fitch Ratings sent a report on the closing of Revel Casino on Wednesday, saying the closing “illustrates the depth of distress for the Atlantic City gaming market.” By the time fall gets here, Atlantic City will have 8 remaining casinos–down from 12 at the beginning the year. Showboat and Trump Plaza are also on the verge of closing.
In many ways, Revel Casino is the starkest and most emblematic of all the 2014 Atlantic City casino closings. Revel was the latest casino to be built. It was built at a cost of over $2.4 billion, but had problems even before it opened. One financier pulled out of the development with a $900 million loss.
Legacy of Financial Troubles
When Revel Casino opened in 2012, it was supposed to be the most expensive and grandest of the Atlantic City casinos, and Revel was billed as a rival to the opulence of Las Vegas. The casino attracted gamblers, but was saddled with too much debt and filed for bankruptcy in February 2013. Only 15 months later, the resort had to file for bankruptcy again. The second time, management announced it would close its doors on August 18. It appears the closure date won’t be too far off.
Last Friday, Chris Christie announced a gambling summit for sometime in early September. He wants to discuss with politicians, executives, gaming regulators, and trade union officials ways to save the Atlantic City land-based casino gambling industry.
$74 Million in Online Gambling Revenues
Over the first seven months of 2014, New Jersey’s online gambling industry has taken in $74 million. In all but one month, the licensed Internet gaming industry has increased its revenues. The final 5 months of the year therefore could double the total so far, but even $150 million in revenues would be a major disappointment.
When online gambling was being pushed by New Jersey lawmakers, Governor Chris Christie suggested that state could see $1 billion in revenues in a year’s time from iGaming. Those predictions have proven to be wildly inaccurate. Such numbers might have been able to save the casino properties which are closing, but online gambling is simply not a replacement for the lost winnings over the past 8 years. In 2006, Atlantic City casinos collected $5.2 billion in winnings, compared to the $2.7 billion last year.
Revenues could be increased soon. Amaya Gaming recently purchased the Rational Group, which owns PokerStars and Full Tilt. The $4.9 billion buyout opens the door for PokerStars to be licensed to operate an online casino and poker site in New Jersey, likely in partnership with Resorts Casino. If so, then the biggest poker room in the world soon could be available to New Jersey gamblers.
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