Atlantic City Revel Casino to Close in September
Atlantic City’s Revel Casino announced its pending closure after a bankruptcy-induced auction failed to produce a buyer for the troubled property. Revel, which will close on or before September 10th, becomes the fourth of 12 Atlantic City casinos to announce its closure within a year, a harsh economic correction in the face of Atlantic City’s and New Jersey’s struggling casino fortunes.
The $2.4 billion Revel opened in 2012 amid much hoopla as Atlantic City’s first new casino property in nearly a decade, but never came close to turning a profit in its two yeas of operation. The casino’s parent company, Revel Entertainment Group, currently carries nearly a half billion dollars in debt, with no realistic avenue for reversing the casino’s fortunes.
Revel’s pending closure will mean the loss of nearly 3,200 Atlantic City casino jobs, adding to the thousands of other jobs lost from the industry with the closing or announced closing of three other properties. The Atlantic Club, the city’s oldest casino, closed in February. Since then, the Trump Plaza and the Caesars-owned Showboat Casino AC have also announced their pending shuttering.
The Revel, like the Showboat and the Trump Plaza, offered poker to customers in addition to its other casino games. The Atlantic Club did not offer poker, though it was scheduled to as part of a planned purchase by PokerStars parent Rational Group which collapsed amid regulatory controversy.
Revel’s pending closure will reduce the count of Atlantic City casinos to eight, the maximum number that some industry analysts believe Atlantic City can support. The state’s one-time draw as the East Coast’s preeminent gambling destination has long been eroded by the opening of competing casinos in neighboring states, combined with Atlantic City’s own sagging reputation as a tourist-friendly destination, apart from the immediate vicinity of its fabled boardwalk and nearby casinos.
The closing of Revel will also provide additional ammunition for political foes of New Jersey Governor Chris Christie, who on Friday vetoed a bill that would have indirectly allowed sports betting to take place at casino properties such as Revel. The state’s gambling industry had looked to the possible introduction of legalized New Jersey sportsbetting as a possible short-term lifeline to help bolster the state’s sagging casino fortunes. A nj.com report states that since 2006, when the first casino in nearby Pennsylvania opened its doors, gambling revenue in Atlantic City has declined by 40%, from $5.2 billion to $2.86 billion.
Revel itself announced the closing via a terse press release published on its corporate web site. The text of that release:
Revel AC, Inc. (the “Company” or “Revel”), the parent company of Revel Entertainment Group, LLC, announced today that Revel Casino and Hotel will cease operations no later than September 10, 2014, subject to receipt of regulatory approvals.
We regret the impact this decision has on our Revel employees who have worked so hard to maximize the potential of the property. 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. This situation is compounded by the considerable non-controllable expense structure that has financially burdened the property.
In addition, challenges have arisen in our attempts to sell Revel as a going concern. While we continue to hope for a sale of Revel, in some form, through the pending bankruptcy process, Revel cannot avoid an orderly wind down of the business at this time.
Thoughtful consideration was given to the impact on our guests, our employees and the employees of our associated tenants. We hope that Revel can be a successful and vital component of Atlantic City under a proper ownership and reorganized expense structure.
We will continue to endeavor toward a placement with such an owner, but there can be no assurance as to the outcome of the pending bankruptcy process.
Revel will honor reservations and deposits while Revel remains open.