Revel Casino Borrowing $150m "An Act Of Desperation"

Revel Casino Borrowing $150m "An Act Of Desperation"According to a source for the New York Post, investors in Atlantic City’s Revel casino have loaned the business a further $150 million in funding as they seek to keep their $1 billion investment in the $2.4 million project afloat.
The same source apparently described the funding as “an act of desperation” designed to allow Revel’s investors time to restructure and then sell the casino, and said that without the recent loan the business would have been forced to close within weeks thus rendering their funding worthless.
However, it is believed Revel’s debts are fast approaching the $1.6 billion mark meaning that the casino will need to generate around $33 million in revenue per month in order to service an annual debt payment of up to $175 million. Meanwhile, the signs are not good as since opening in April, Revel has ranked near the bottom of Atlantic City’s 12 casinos and made a loss of $35 million in the second quarter, followed by a further loss of $37 million in the third quarter.
Marketing would seem to be a huge factor in Revel’s disappointing performance as the casino originally sought to attract high-end client, whilst neglecting less ritzy sections of the market such as slot players. Revel management has now said they intend to compliment these other areas by providing more slots as well as more affordable restaurants. As Revel CEO Kevin DeSanctis explains:
“This additional funding will enable us to execute our strategic build-out of exciting new gaming, food and beverage, and entertainment amenities. These new offerings will allow us to enhance and improve both the gaming and leisure experience for our customers.”
The Revel casino was originally touted as a means to raise Atlantic City’s beleaguered gambling industry out of the doldrums. However, it soon ran into trouble and Revels’ first major backer, Morgan Stanley, wrote down its $1.2 billion investment in the project before selling its stake to four hedge funds, the biggest backer of which is  Canyon Partners.

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