What Does Bankruptcy Mean for Revel?
Less than a year since opening to the public, Atlantic City's newest casino has announced it will file for Chapter 11 bankruptcy protection next month. What does this mean for Revel and the entire gaming town?
Mirroring the comments of Revel's CEO, Roger Gros with Global Gaming Business magazine said the move could be a positive step for Revel, which has been performing below expectations month after month.
"When you get so far underwater, you've got to be able to refinance the debt that you're holding," Gros said. "They'll be able to focus on the operations right now without having to worry about the looming debt."
Operating losses hit the tens of millions in the third and final quarters of last year. January's numbers were dismal as well. However, Gros said the bankruptcy filing does not symbolize a closure any time soon.
"We've seen many Atlantic City casinos go through multiple bankruptcies," he explained.
His main concern is how long creditors will stick with current management, which is staying the same. Despite the lackluster performance, Revel's business plan has been constant - attracting the non-gamer and proving itself as a total destination resort. Gros said he believes investors still value that vision, for now.
"If they don't start turning around some time soon, I think the investors are going to start questioning whether or not management has the right vision," Gros said.
Atlantic City is dealing with a new economic reality, according to Gros. Last week, Trump Plaza was sold for a bargain price of $20 million. He said the struggling city's casinos will have to become much more flexible in who they attract and how they attract them.