Revel Casino To File For Bankruptcy In March

When the Revel casino opened in Atlantic City on April 2, 2012, there was much hope that the massive $2.4 billion project would help reverse the fortunes of the beleaguered city, whose gambling revenues have been on the decline since 2006.
However, less than a year after it opened, the Revel Atlantic City has run aground with the business stating on Tuesday that it will file for Chapter 11 bankruptcy come March. The move should see Revel shave away around two-thirds of its $1.5 billion debt which, in the long run, should give the business more flexibility in which to operate. As Revel’s CEO Kevin DeSanctis, explains:
“Today’s announcement is a positive step for Revel. 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.”
Despite dwarfing Atlantic City’s other 11 casinos in terms of building cost, Revel has been firmly near the bottom of the city’s earners in terms of revenue. In January, it earned less than $8 million and for Q2 and Q3 made an average gross operating loss of $36 million.
After running up debts of around $1.5 billion, Revel was then left with the unenviable tasks of having to generate around $33 million each month in revenues just to meet its interest payments. It is now hoped that carrying less debt will help the beachfront casino to operate more effectively, and as David Rebuck, director of the state Division of Gaming Enforcement, explains:
“The agreement between Revel and its lenders will allow for a necessary financial restructuring and improve the property’s financial condition going forward. We see this as a positive step that will allow Revel to comprehensively address its financial needs while continuing normal business operations.”