Atlantic City Revel Problem isn’t getting any Better

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Earlier this year, Atlantic City was banking on the $2.4 billion Revel Hotel & Casino to turn around sagging revenue throughout the town. This resort and casino was supposed to be the city’s crown jewel with 1,800 hotel rooms, fine dining, a nightclub, a spa, the 160,000-square foot “Mezz” theater and the “InOut Pool” (goes from indoors to outdoors).

But even with all of the amenities and hype in the world, the Revel has been a huge flop up to this point. In Q3, the Revel reported operating losses of $37 million, which has many people wondering if the resort will even be able to stay in business. Besides the massive amount of losses the Revel is taking, there are several other financial problems too including the following:

Late on Bills

There are a number of companies that this hotel and casino still owes money to. A collective $37.8 million is owed to 40 different construction companies, while total debts for the failing casino amount to $1.3 billion.

Back Taxes

The Revel hasn’t even had much luck paying their taxes since Atlantic City is due $12 million. In writing to a state gaming office, New Jersey’s state senate president Stephen Sweeney penned the following words, “Since your letter, I have received a number of additional reports 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.”

Line of Credit

Because they’re not bringing enough money in to be self-sustainable, the Atlantic City Revel needed to secure an additional $100 million line of credit for operating costs. And it’s questionable how or when they’ll be able to pay this back with everything else that’s going wrong.

Based on everything we’ve discussed, it’s no secret that the Revel is struggling big-time. But if the hotel and casino were to go under, it would have seriously bad implications for Atlantic City as a whole. Roger Gros of Global Gaming Business Magazine addressed this matter with the following statement:

It would be pretty serious, because Revel is the model that Atlantic City needs to go after if it wants to survive as a city. They need to go after other areas of marketing, the restaurants, the shops, the shows, ways to make money other than gambling revenue.

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