Atlantic City’s biggest, newest and most expensive casino has failed to find a buyer at bankruptcy auction and is closing.
Revel Entertainment said the US$2.4 billion, 1,399-room Revel will shut its doors 10th September, putting 3,100 people out of work and adding to Atlantic City’s woes at a time when the seaside gambling enclave is struggling for relevancy in an oversaturated Northeast casino market.
Revel debuted 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. Since 2006, when the first casinos opened in neighboring Pennsylvania, Atlantic City’s gaming revenue has fallen from $5.2 billion to $2.86 billion last year.
Revel will be the fourth of the city’s 12 casinos that have closed or will if buyers are not found. The Atlantic Club closed in January, bought at a bankruptcy auction by the parent companies of Tropicana and Caesars and sold for parts in the name of reducing competition. Caesars, which owns four of the city’s casinos, is struggling under the weight of $20 billion in debt and plans to close the Showboat, which is profitable, on 31st August, likewise in the name of reducing competition. The perennially struggling Trump Plaza is due to close 16th September.
In all, some 8,000 jobs are slated to go by the boards.
Revel Entertainment and partner Morgan Stanley envisioned a 3,800-room resort when the project was announced in 2007. Then the recession hit and the project ran out of money and was $1 billion shy of completion when the bank exited in 2010 halfway through construction, taking a $932 million loss. The promise of state tax incentives helped the company assemble new backers, but since its opening the property has consistently ranked near the bottom of the market in terms of gaming revenue and has never turned a profit. It made its first trip into federal bankruptcy protection 11 months after opening in order to reduce and restructure debt. The company filed for a second bankruptcy reorganization in June, listing assets of $486.9 million and liabilities of $476.1 million.
Revel said it still hopes to find a buyer through the bankruptcy process. But it acknowledged that if that happened it would only be after the facility had already shut down.
Israel Posner, who runs a tourism and gambling study institute at Richard Stockton College, told The Associated Press he expects it to sell, but as a non-casino hotel, and “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”.
