Revel announces a closing date
The Revel casino in Atlantic City has sent a closing date after failing to find a buyer.
The company said it will close its doors on September 10. In a statement to the Press of Atlantic CIty, the hotel explained that efforts to improve Revel's financial performance have come up short. "While we continue to hope for a sale of Revel, in some form, through the pending bankruptcy process, Revel cannot avoid an orderly wind down of the business at this time," explained an email.
The move comes two years after the $2.4 billion casino opened. It has never turned a profit.
Talk Radio 1450 WPG host Harry Hurley first reported on Monday that the hotel failed to receive "a qualified bid" to buy the hotel and continue its operation.
Speaking on a conference call, Bloomberg News reports Caesar's CEO Gary Loveman said that the lack of bids “suggests that even at a de minimis price, people are finding it hard to imagine they can make money operating the Revel."
Caesar's is closing its Showboat casino, one of three Atlantic City properties scheduled to close, putting 8,000 workers out of work.Revel's closure alone will mean the loss of 3,100 jobs.
Atlantic City Mayor Don Guardian (R) said last month there were 6 potential buyers for the casino but did not reveal details about any of the bids. A bankruptcy auction scheduled for last Thursday was postponed to this week because lawyers need more time to review the bids.Hurley says the lack of qualified reasons is why the auction was postponed.
Meanwhile, Hurley learned some of the requirements of the bids for Revel. Among them:
- Successful bidders must have either demonstrated that they had or could obtain the financing required to make the purchase.
- 10 percent down payment was required.
- The bidder had the cash flow to meet payroll and operating expenses, pursuant to New Jersey Casino Control Commission.
- Hold or can obtain a New Jersey Casino Control Commission gaming license.
There are monetary issues clouding Revel's future as well. Hurley says that the initial investors in Revel who invested a total of $125 million in the facility accepted equity status in an earlier reorganization. They would be "first in line" to be repaid but the $125million seems to be "unachievable at this time in terms of a purchase price."
State casino regulators say there is nothing they can do to keep the properties open.
In an Aug. 1 letter, commission Chairman Matthew Levinson told state Sen. James Whelan and Assemblymen Vince Mazzeo and Chris Brown that deciding when to close a casino is a private business decision and beyond the commission’s authority.
“The commission simply does not have the authority to direct a casino licensee to forestall a business decision to cease its gaming operations,” Levinson wrote.
- Revel to close by September 10 / Press of Atlantic City
- Caesars’ CEO Loveman Says No Qualified Bidders for Revel / Bloomberg
The Associated Press contributed to this report