This week’s Inside Gaming starts with the announcement — finally! — of the sale of the closed Revel Casino in Atlantic City, with the new owners intending to reopen the property this summer. Also included are reports on recent thefts at Las Vegas casinos, a lawsuit against Pennsylvania’s new expanded gambling law, and recent revenue numbers for Maryland casinos.
Closed Revel Goes for $200M, To Reopen as Ocean Resort Casino This Summer
This week came another episode in the more than three-year-long saga of the Revel Casino Hotel in Atlantic City that closed in September 2014 just two-and-a-half years after its grand opening. The Press of Atlantic Cityreported on Tuesday that owner Glenn Straub has sold the property to the Colorado-based group AC Ocean Walk LLC who plan to reopen it this summer as Ocean Resort Casino.
If all goes according to schedule, the reopening will come shortly after the Hard Rock Hotel & Casino Atlantic City opens its doors on the site of the old Trump Taj Mahal in late May over the Memorial Day weekend.
Back in June, owner Glen Straub proudly announced that the Revel Casino Hotel would once more open to the public that month – the very next day, in fact. But that plan fell through when Atlantic City officials assessed the property, deeming it unfit to multiple approve permits necessary for the re-opening. Revel casino reopening rejected; rescheduling required Atlantic City officials rejected the former Revel resort’s plans to begin reopening on Wednesday, saying inspections need to be done.
The sale was for $200 million and confirms a report of AC Ocean Walk's interest in the purchase made public last month by Moody Investors Service, the news of which at the time prompted repeated denials from the property's mercurial owner Straub.
The Florida-based developer bought the $2.4 billion Revel in bankruptcy court for just $82 million in 2015. Straub then rebranded it as TEN the following year amid frequently revised announcements of plans to open that never quite materialized.
The Moody Investors Service report in December described the intentions of AC Ocean Walk and its leader Bruce Deifik to invest another $175 million renovating the property in advance of the summer opening.
'We are incredibly excited that we were able to take advantage of the opportunity to acquire this tremendous property at a time when Atlantic City is seeing great economic strides,' said Deifik this week who alluded as well to the Hard Rock opening and other growth soon coming to the city.
Atlantic City's new mayor Frank Gilliam who took office 10 days ago echoed that optimism, characterizing the news of Ocean Resort Casino's plans to open as being like 'Christmas in January.'
The new property will provide 138,000 square feet of gaming space, including 2,200 slot machines and a 100 table games. Plans are in place as well to add a sports book should the Supreme Court rule in favor of New Jersey's appeal of the federal prohibition against sports betting this spring. Deifik says he also intends to bring back previously successful Revel restaurants.
Of course, while the seven currently operating Boardwalk casinos have managed to enjoy a modest rebound in terms of revenue following the closure of four casinos in 2014 and the Trump Taj Mahal in 2016, adding two new properties might be difficult for the market to absorb, thus reintroducing stress into an industry still in recovery mode.
Such is the thinking of gaming analyst Colin Mansfield of Fitch Ratings, who told the Press of Atlantic City that while there exists 'a healthy level of profitability when it comes to gross gaming revenues' and that currently the AC 'market is in a good spot,' he also thinks 'the introduction of two properties is not great for Atlantic City.'
Two More Robberies at Las Vegas Strip Casinos
Las Vegas police are currently searching for three people suspected of stealing chips Wednesday night from Harrah's Las Vegas Hotel and Casino, reports the Las Vegas Sun. Officials have released no further details from the robbery.
That theft comes just a day after another robbery at the New York New York. On Tuesday night a man armed with a handgun demanded cash at the casino cage and made off with an undisclosed amount of money.
In late November the poker cage at the Bellagio was robbed on a weekday afternoon at gunpoint by a man wearing a mask. The suspect remains at large.
Penn National Sues Over New Law Expanding Pennsylvania Gambing
As expected, on Tuesday Penn National Gaming Inc. sued the state over the recently-passed law allowing for numerous types of gambling expansion in the state, reports philly.com.
While the new law paves the way for current casino operators to obtain licenses to offer various online gambling games, the lawsuit more particularly objects to the provision allowing for the operation of 10 additional 'satellite' casinos in the state.
The lawsuit filed in federal court states 'that provisions allowing 10 more mini-casinos would cause 'significant and unique' harm to [Penn National's] suburban Harrisburg casino, Hollywood Casino.'
We noted here back in October how Penn National was not at all happy about the new law. At the time Eric Schippers, senior VP of public affairs at Penn National, said the group was 'beyond disappointed by the legislature's ill-conceived and hasty gaming expansion plan,' indicating in particular its expected punitive effects upon Hollywood Casino.
Penn National maintains the law 'violates its constitutional rights to equal protection and due process, as well as Pennsylvania's constitutional prohibitions over legislation that benefits a particular person or entity.'
It's not the first lawsuit targeting the new bill. Las Vegas Sands has also filed one since it was signed into law by Governor Tom Wolf, and Penn National has filed a second suit as well.
Maryland Casinos Post Second-Best Month Ever
Revenue from Maryland's six casinos continues to increase, with the latest numbers showing a total of $141 million generated in December, reports The Baltimore Sun. That's the second-highest total for the state since opening its first casino in 2010, only barely missing eclipsing the record $141.2 million revenue in March 2017.
That near-record is thanks largely to MGM National Harbor's $56.5 million total, followed by Live Casino ($47.2 million) formerly known as Maryland Live!. Maryland Live! had been the state's largest casino before MGM National Harbor opened in December 2016, with the National passing Live in revenue last year.
MGM National Harbor was up significantly year-over-year (34.9 percent), although December 2016 was only a partial month for the property as it had just opened. The Rocky Gap Casino Resort was also up for the month (6.8 percent), while the other four casinos saw decreases from a year ago — Horseshoe Casino Baltimore (down 19.5 percent), Ocean Downs Casino (down 9 percent), Hollywood Casino Perryville (down 5.5 percent), and Live Maryland (down 1.7 percent).
Photo: Wikimedia Commons.
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TagsIndustryNew JerseyAtlantic CityRevel Casino HotelOcean Resort CasinoGlenn StraubLas VegasNevadaHarrah’s Las VegasNew York New YorkBellagoPennsylvaniaPenn NationalHollywood CasinoMarylandMGM National HarborLive Maryland
Is it Possible the Former Revel Will Re-Open?
One of the largest (and fastest) failures in the history of casinos has to be Atlantic City's Revel Casino. There are a myriad of factors that contributed to a downfall of bizarrely epic proportions. Among these contributing factors was the absence of a buffet, the attempt to be 100% non-smoking in a market heavy on smokers and originally being stingy on comps that inevitably led to the perception that they were stingy on comps.
Essentially, CEO Kevin DeSanctis, in perhaps the most blatant and overt way conceivable, urinated on the very notion of attracting value gamblers.
The overwhelming debt load upon opening obviously didn't help either.
The Revel went out in every bit of a bizarre fashion as it came in. After a pair of bankruptcies, the casino was eventually forced to liquidate.
To summarize, there were any number of potential buyers, but in an unusual turn of fortune, this resulted in a race to the bottom for bidders as opposed to one to the top. Multiple entities, at one point or another, deposited ten million dollars for the right to consider purchasing the establishment, and multiple entities subsequently forfeited said deposits. In fact, it was often joked that the bankrupt company would garner more revenue from the forfeited deposits than the amount for which it would eventually sell.
The ultimate buyer of the property was known real estate developer Glenn Straub. Unfortunately, he found himself at odds with ACR Energy Partners, an entity that built a power station exclusively for Revel and was the only means by which Revel might enjoy electricity and running water.
ACR Energy Partners was also a not insignificant contributor to Revel's catastrophic demise as Revel was forced to pay unbelievably exorbitant amounts for its utilities. The problem, of course, is that they didn't.
The result was that ACR, until recently, held steadfastly to the position that it was due compensation, in full, for the debt to them accrued by Revel. The resulting stalemate was interesting as Straub cannot operate without that power station and that power station has no other entity for which its services are required to operate.
However, ACR Energy Partners and Straub have reportedly reached an agreement by which Straub will purchase and operate the power station. It is difficult to speculate the degree to which the lack of utilities has damaged Revel and the costs that will necessarily be associated with rectifying any such damage, but the purchase of the power station is certainly a step in the right direction. Furthermore, it can be assumed that Straub took such purchase and costs into consideration and arrived at the conclusion that the transaction will prove worthwhile.
There have been murmurings for a wide variety of possible features the former Revel might offer, amongst these are polo grounds, an enormous indoor water park and housing for Syrian refugees. Perhaps the goal is to utilize some of said refugees as a potentially cheap source of labor for some of the necessary upkeep and renovations.
In any event, a Revel Casino with competent top brass and a small fraction of the debt load may prove profitable in the long run. There is certainly untapped potential there and, I would suggest that the final product may eventually be superior to other Atlantic City casinos, even after being inoperable for such an unusual length of time.
Furthermore, from a standpoint for potential revenues, we will note that casino profits are up, almost across-the-board for Atlantic City this year as opposed to last year. What that should indicate to Glenn Straub is that the potential exists for, perhaps not another profitable casino in Atlantic City, but rather a, 'New,' casino that could be profitable by virtue of siphoning market share from other casinos.
In fairness, I realize that this sort of reasoning is the Atlantic City problem all over again which is what caused four casinos to close within the span of a year in the first place, but if only the strong survived once, then only the strong will survive again.
I certainly hope that, if Revel does indeed reopen and operate, in part, as a casino that Straub has a measurable degree of input in the direction that the Marketing Department takes. For those of you who have been following the Revel story, you'll likely be aware that Straub has been full of zany antics throughout this entire process, and I don't expect the Promotions at the newly reopened casino to be any different. Hopefully, by zany antics, I mean, 'Profitable for AP's.'
In fact, that would be an intriguing theme for the entire casino as a whole, perhaps not to a Circus Circus type extent, but close in being as hysterically wacky as possible. You could have days where the dealers dress in all sorts of unique garb, including clown outfits, and basically just have a good time with the whole affair. If there is one person on Earth for whom having a good time is a matter of high priority, then I would suggest that person is Glenn Straub.
For my part, I would certainly find it disheartening for another casino to close in the Atlantic City market, but if the former Revel could devise some strategy that results in profitability, then it can be almost certain that a casino of that scope and measure will bring with it more jobs that those that would be lost by whatever casino(s) ends up shutting its doors as a result. There is also no guarantee that the market cannot sustain another casino, though I tend to doubt if it could.
It is equally important to note that this casino is the FORMER Revel, so anyone considering a potential visit to the property is giving it a first chance rather than a second.
If there's one thing of which people can be virtually assured it is that the process of this property reopening, if indeed it does, should be just as interesting (and perhaps entertaining) as the process that led to the property being where it's at now.
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