Revel Casino Emerges From Bankruptcy Filing
ATLANTIC CITY, N.J. (CBSNewYork/AP) - Just over a year after it opened, Atlantic City's newest casino has gone into bankruptcy and gotten out of it, ready to start again.
Revel formally completed a Chapter 11 restructuring Tuesday that saw it wipe away $1.2 billion of its $1.5 billion in debt, in return for granting lenders an 82 percent ownership stake.
The struggling-yet-sleek $2.4 billion casino-hotel, whose glass exterior topped by a white ball has become an indelible image at the northern end of Atlantic City's Boardwalk, opened in April 2012 with hopes as high as its 47-story pinnacle. But from the start it struggled to win a following and remained mired near the bottom of Atlantic City's 12 casinos in terms of the amount of money it won from gamblers each month.
The casino is now "singularly focused on attracting guests to the property through an expanding range of amenities and exciting new programming,'' said Jeffrey Hartmann, Revel's interim CEO. He took over leadership of the resort from Kevin DeSanctis, who helped shepherd the project through its tortured construction, during which it ran out of money and lost its major backer, Morgan Stanley. DeSanctis remains with the company in a different capacity.
From the day it opened, Revel presented itself as a different kind of attraction, not a casino resort, but as a resort that just happened to have a casino. Its emphasis on attracting high-end leisure customers and group meetings showed some success, but it did not pay as much attention as it could to the gambling side of the operation.
Hartmann has promised that will change. Revel recently opened a high-end slot lounge and player's club, and is adding new attractions including a beach club, an Asian noodle bar and more affordable eateries to complement its high-priced celebrity restaurants.
It joins other Atlantic City casinos that have gone through bankruptcy court in recent years, including the three casinos that at the time comprised Trump Entertainment Resorts (one was since sold); and the Tropicana Casino and Resort.
Revel posted a $149 million operating loss from its April 2, 2012, opening through the end of March 2013. It has ranked near the bottom of Atlantic City's 12 casinos in terms of the amount of money won from gamblers.
It now has $272 million in debt. Yet it still does not expect to turn a steady profit until the summer of 2014.
Dennis Stogsdill, Revel's chief restructuring officer, called the bankruptcy court exit "a monumental day for Revel.''
"With a right-sized balance sheet, reduced debt load and improved cash flow, we have emerged from this process stronger and better positioned for success,'' he said.
The casino predicts its net revenue will rise from $152 million last year to $256.4 million this year, $322.8 million in 2014 and $378.9 million in 2015. Revel also submitted documents to state regulators last week predicting it will reduce last year's operating loss of $111 million to less than $43 million this year. But Revel already has lost more than $38 million in just the first three months of this year, meaning it can lose only $4.4 million in the following nine months to meet its own target.
Revel has 1,399 hotel rooms, and a casino with more than 2,400 slot machines and 130 table games.
As part of the bankruptcy filing, Revel will begin to allow patrons to light up on 25 percent of the gambling floor, adopting the same standards as the city's other 11 casinos. Revel had been Atlantic City's only smoke-free casino.
This year's Miss America Pageant will be held in Atlantic City's Boardwalk Hotel in September. The pageant had been held in Las Vegas for the past six years.
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