The story of Revel is arguably one of the most confounding and surreal stories to come out of Atlantic City this year – and that’s not saying a whole lot.
It opened earlier this year to enormous hype and expectations, yet the only thing the casino has had to show for it since then has been a continuous run of bad news, including numerous instances when the casino has had to be bailed out by investors in order to keep the business operations afloat. Now, it appears that they’re heading down that path again.
According to the Wall Street Journal, the luxury casino is likely to receive a new batch of loans to the amount of about $150 million. The financial assistance is expected to be used on operations and investments in the property and will be funded by the casino’s existing lenders. There’s still no guarantee that this latest development would push through, but if it does, a timetable for the completion of the deal could be finalized as early as next week.
This isn’t the first time Revel has resorted to seeking financial help from its investor group. Back in August, it was reported that Revel received $100 million from its lenders, a number that the company quoted as enough to last them until 2013. Apparently, even that wasn’t enough to get them through 2012. The current financial package is being touted as one that would include a $125 million term loan and a $125 million revolving credit. Of that number, $100 million will be used to pay the existing loan with the remaining $150 million to be used for operations and investment.
The argument, it seems, is that the new loan could be used to improve the overall customer experience for the hotel and casino’s guests. Remember when Revel executives were packaging the establishment as a lifestyle resort first and a casino second? We’re guessing that they’d like to take that back.
It’s gotten so bad for the resort that it’s now become a microcosm of Atlantic City’s struggles. In November alone, the casino only generated gambling revenue of $6.2 million, a far cry from their initial expectations to hit $30 million in revenue a month just to stay afloat. Even worse, that $6.2 million number represented a 30-odd percent decline from their October revenue figures of $9.3 million and ranked 11th out of the 12 casinos in the town with only the Trump Plaza making less.
Make no mistake, we’re rooting for Revel to get out of the massive hole it has dug for itself and regain their business footing. The worry here is that it just might be too late. It’s never a good sign when you’re in need of financial assistance five months into your opening. So imagine what it’s like if they’re expected to go about the same route before even seeing the turn of the calendar year.