Tuesday, August 12, 2014
ATLANTIC CITY, N.J. (AP) — When it opened just over two years ago, many people hoped Revel would save Atlantic City's struggling casino industry, which has been bleeding money and jobs for years.
But now the $2.4 billion resort that was widely seen as the last, best chance for Atlantic City's gambling market is shutting down, unable to find a buyer for even pennies on the dollar.
In addition to putting 3,100 people out of jobs and hurting state and local budgets, Revel's demise shows just how cutthroat the East Coast casino market has become, and how difficult it is for even the newest and nicest gambling halls to survive in an oversaturated market.
Revel Entertainment said the casino and its 1,399 hotel rooms will close on Sept. 10, never having turned a profit.
"We regret the impact this decision has on our Revel employees who have worked so hard to maximize the potential of the property," Revel said in a statement Tuesday. "We thank them for their professionalism and dedication; however we are faced with several unavoidable circumstances.
"Despite the effort to improve the financial performance of Revel, it has not proven to be enough to put the property on a stable financial footing," the company wrote.
Revel's most recent Chapter 11 filing listed assets of $486.9 million and liabilities of $476.1 million.
The company said its situation was compounded by a "considerable non-controllable expense structure" that financially burdened the property. It said it had no choice but "an orderly wind-down of the business at this time."
Revel said it still hopes to find a buyer through the bankruptcy process. But it acknowledged that if that happened, it would be after the facility had already shut down.
Matthew Levinson, chairman of the New Jersey Casino Control Commission, called the closing "enormously disappointing," but held out hope for a future sale.
"I sincerely hope that possibility materializes, especially for the employees who face the loss of their jobs," he said.
Israel Posner, who runs a tourism and gambling study institute at Richard Stockton College, said he expects Revel to sell as a non-casino building.
"I still believe Revel will sell, for pennies on the dollar, to someone who will figure out that it is the most modern, beautiful structure that's going to be built for generations to come," he said.
The casino was due to be sold at a bankruptcy court auction last week, but that was postponed to allow casino officials to study bids that were received. After Revel's board met on Monday, the decision was made to shutter the glittering glass-covered casino at the north end of the Boardwalk.
Revel opened in April 2012 as the first new casino in Atlantic City since the Borgata opened nine years earlier, and carried great hopes for many that it would be the catalyst to jolt what had been the nation's second-largest gambling market back to life. Atlantic City has since slipped to third place behind Nevada and Pennsylvania, whose casinos touched off the New Jersey resort town's revenue and employment plunge in 2007.
Since 2006, when the first Pennsylvania casino opened, Atlantic City's casino revenue has fallen from $5.2 billion to $2.86 billion last year.
So far this year, the Atlantic Club closed in January, bought at a bankruptcy auction by the parent companies of Tropicana and Caesars and shuttered in the name of reducing competition. Caesars Entertainment will close the Showboat on Aug. 31, also to reduce the competition in Atlantic City, where it currently owns 4 of the 11 casinos. And Trump Plaza is due to close Sept. 16.
Revel has ranked near the bottom of Atlantic City's casinos in terms of the amount of money won from gamblers since the day it opened.
Its original owners envisioned it as a luxury resort that just happened to have a casino, and eschewed many staples of casino culture, including a buffet and bus trips for day-trippers. But that strategy — as well as the only overall smoking ban in Atlantic City — turned off customers, and Revel filed for bankruptcy in 2013, a little over a year after opening.
That led to new ownership and a "Gamblers Wanted" promotional campaign to emphasize the company's new emphasis on its casino.
But despite some improvement, Revel's finances never recovered enough, and it filed for bankruptcy a second time in June.
Wayne Parry can be reached at http://twitter.com/WayneParryAC