Revel Casino's Debts Could Soon Reach $1.6bn

Revel Casino's Debts Could Soon Reach $1.6bnIn April this year, the $2.4 billion Revel Casino opened in Atlantic City and was being touted as the cure for the beleaguered gambling resorts financial woes. A few months on, however, and its Revel itself which seems to be headed for major difficulties as it seeks out a second round of financing.
The first round took place in August when Revel secured $100 million and now, according to casino workers union Local 54, the business will need a further $300 million to carry it through 2013. However, the union then estimates Revel’s borrowings will reach a massive $1.6 billion resulting in $175 million of annual debt payments.
By the union’s calculations Revel will subsequently need to generate up to $33 million each month in gambling revenues just to to meet the interest payments on its debts. This could spell disaster for the casino whose best month in its 8½ months of operation came in August when just over $20 million was taken. Compounding Revel’s woes further, the casino took in just $6.2 million in November as Superstorm Sandy forced Atlantic City’s 12 casinos to shut shop for a week.
Meanwhile, Revel’s casino workers union is currently locked in a dispute with its employer and has been warning investors against making further loans to the struggling casino. The union’s advice would seem to be born out by New Jersey’s state senate president Stephen Sweeney, who recently commented that “Revel’s finances have deteriorated considerably, and that the situation has become dire. The casino appears to be burning cash at an alarming rate.”
For the third quarter of 2012, Revel made a loss of almost $37 million, but striking an optimistic note Revel executives said they anticipated the business would eventually generate as much income as the Borgata Hotel Casino & Spa which has generated around $558 million in revenue so far this year.

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