The situation at the Revel Casino Hotel in Atlantic City went even worse, if the management in the past week sent a letter to all employees. The letter reportedly warned that efforts to find a buyer for the property have not been successful and the company will be forced its doors as soon as August 18 without a new owner to close.
The casino stressed, however, that the date is not a deadline, but just a requirement of federal law.
“The employees in the letter does not mention August deadline for an appointment, if applicable., The WARN Act generally requires at least 60 days in advance and the selected data to meet such requirements and on current information available to Revel based,” said the company in a press release. “The sale process will run its course, and we will revise the date specified in the notice, as circumstances require.
“Revel has the means to continue operations as usual and makes a sale to a new owner who will help you to ensure that they receive the financial and operational flexibility required for the future. However, as stated in the announcement, if not successful in Revel to complete a sale immediately or to find a better solution to their efforts, it may decide to cease all operations and closed down permanently in which case would that result in employee layoffs.
“Although Revel believes that it may not be required to provide notice pursuant to Federal Worker Adjustment and Retraining Notification Act (WARN Act which), this conditional dismissal notice, which was sent to the employee, shall meet all applicable requirements of WARN Act notice.
“Revel management team is working to reach an agreement with a new owner as quickly and efficiently as possible. Whatever Revel is decisions and adjustments on future employment afford based on their business needs.”
The casino later confirmed that it has filed for bankruptcy a second time this year. For most of the year Revel has been actively courting a buyer. Rumour has it interested large gaming companies like Caesars Entertainment and Hard Rock International, but the owner price of approximately 300 million U.S. dollars, it is not attractive. The Casino is powered by a group of investors who control after the first bankruptcy took deletion apparently not heard 82 percent of the debt of the property, but enough.
Hard Rock President and CEO Jim Allen has said that his company would be interested, for “the right price”, but apparently $ 300 million is too much. The property has lost more than $ 250 million since it opened.
Since the casino leases most of its food and beverage outlets, as well as the nightclub operations, says Union Gaming Group in a not to investors, the Revel “can not on a cash flow multiple, the evaluation makes it difficult to be evaluated., We have the seen to increase, the property especially the sales recently. Year-to-date gaming win is continue to make until May by 29.3 percent to 59.6 million dollars.’s new management team, a number of positive operational changes to come closer so as not to involve the break-even point., the property in the state of the online game industry, as it remains, is helped to improve laser surgery. During the changes have the property, we do not expect it to be a dominant player on the market to be sudden. ”
The casino opened in 2012 after nearly six years begins and ends in the construction. In a casino of $ 2400000000, built and owned originally by Morgan Stanley, construction of the property came to a halt in 2009. Arranged A year later, Governor Chris Christie of tax credits for successful Revel (none of which has ever been claimed), and build again recorded.
As a non-gaming Mecca before the Great Recession, Kevin DeSanctis and management of Revel designed strategy does not change after the financial crisis and its “build it and they will come” assumption proved to be wrong. Also victim was the hope that Revel would be a “game changer” in Atlantic City be and help pull back the thousands of players who have given up the promenade for a casino closer to home, with legalized gambling in surrounding states.
After the first bankruptcy was by former Mohegan DeSanctis President Jeff Hartmann, the way was current president and former Station Casinos exec Scott Kreeger replaced.
A marketing program designed to attract players debuted last summer. “You can not lose,” promised a discount of up to $ 100,000 of losses. While the program was complicated and not viable, it has attracted attention, and since then traditional marketing campaigns have gaming revenues improved significantly. But not enough.
The current financial difficulties were exacerbated two weeks ago, when the employee elected to allow Local 54 of UNITE HERE to negotiate a contract. Under DeSanctis Local 54 has a campaign to run to stop the construction of Revel at every step, because DeSanctis refused his restaurant tenants to commit organizing it was unfair that to force them. But now the organizing campaign is was perhaps the last straw be.
Should near Revel, says Union Gaming Group, that it operates a positive for Boyd Gaming, the city’s leading casino, the Borgata and Caesars Atlantic City, who have “similarities in the market positioning.”
“Borgata would probably get an excessive proportion of Revel customers,” Gaming Union wrote. “Last year, generated profit of $ 168.7 million Revel game. High-end accommodations, dining and nightlife focus draw a similar demographic as Borgata. During some of the customer base is similar, there are a number of important differences, including Borgata Focus on Games , several restaurants price points and the location, be allowed to it by the marquee property on the market., if we assume the Borgata gets about a 20 percent share of customers Revel this would equate approximately 35 million U.S. dollars incremental GGR. ”