Revel Reopening Could Negatively Impact Atlantic City’s Teetering Market, Experts Warn
Posted on: June 27, 2016, 05:33h.
Last updated on: June 27, 2016, 06:23h.
The Revel Casino in Atlantic City probably needs some sage, or a witch doctor, or possibly an implosion. Whatever curse has lain like a black cloud over this once-touted property from Day One just doesn’t seem to be in any danger of going away.
According to reports from the Press of Atlantic City (PAC), the casino’s next stage spells even more disaster. But this time, it’s for the other gaming houses still operating in town.
The 47-story casino resort, which cost $2.4 billion to build and was closed in 2014 having never once turned a penny’s profit, was bought last year by eccentric Florida property developer Glenn Straub for just $82 million, which is considered a fire sale bargain.
Straub initially said that he would reopen Revel not as a casino, but as an “elite university” where the world’s finest minds would be free to ruminate on solving global issues such as famine, cancer, and nuclear waste storage. But then Straub changed his mind and decided that he would reopen it as a casino after all.
To put a unique twist on it, he said the new Revel U would offer such untraditional courses as scuba diving, windsurfing, cooking lessons, and a 13-floor endurance cycling course. Maybe Dan Bilzerian would be interested in the latter.
Straub, who is currently engaged in licensing wrangles with New Jersey’s Casino Control Commission, wants to reopen the casino as soon as possible. But analysts said this week it would have been better for the Atlantic City casino industry, which is currently enjoying a period of stability after years of decline, if he had stuck with the wacky university idea.
“The market has been rightsized,” Colin Mansfield of Fitch Ratings told the PAC. “But any more competition in the city would take shares from the existing properties.”
While Atlantic City itself is close to bankrupt, there is hope that the casino industry is at last showing signs of a bounce back after almost a decade on the skids. But Revel, coupled with a proposal to expand casino gaming into North Jersey, could tip the market back into oversaturation.
Mark Giannantonio recently warned that expansion in the north, which is due to go to a referendum in November, would result in the closure of three to five Atlantic City casinos.
“Our findings are quite clear,” he told the East Coast Gaming Conference last month. “The fallout of those three to five casinos will be, potentially, 23,000 job losses. Foreclosures will double, unemployment will double.”
Straub has been arguing with New Jersey regulators that he shouldn’t need to apply for a gaming license because he will be leasing the casino area to a third-party operator. State regulators beg to differ.
“Instead of welcoming this prospect, New Jersey’s Division of Gaming Enforcement has imposed a roadblock that is inappropriate and unnecessary,” complained Straub in an official statement last week.
Despite his disagreement with the regulators, Straub is determined to reopen Revel before summer’s end.
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