Six months after exiting bankruptcy court, Atlantic City’s newest casino may be up for sale – or headed back to bankruptcy.
Revel Casino Hotel says it is pursuing “strategic alternatives,” which in this gambling resort town usually means the property is being marketed for sale, or considering a bankruptcy filing. But the company stressed it has not decided on any specific course of action, and cautioned it is possible that no transaction will result from the exercise.
Revel, now under new ownership led by Chatham Asset management, won’t say what options are under consideration.
“Revel has not made any decision to pursue any specific strategic transaction or alternative, and there can be no assurance that the exploration of strategic alternatives will result in the consummation of any transaction,” the company said in a statement issued late Friday night. “Revel does not intend to comment further regarding its evaluation of strategic alternatives until such time as the board has determined the outcome of the process or otherwise has deemed that disclosure is appropriate.”
Since it opened in April 2012, the $2.4 billion casino-hotel has struggled in the cutthroat East Coast casino market. Once eagerly awaited as the potential savior of Atlantic City, it operated less than a year before filing for Chapter 11 bankruptcy protection in March. That transaction wiped away $1.2 billion of its $1.5 billion in debt, in return for granting lenders an 82 percent ownership stake.
Revel exited bankruptcy court in May and set out to boost its casino business, which has remained stuck near the bottom of the city’s 12 casinos. But that went awry, with a widely promoted “you can’t lose” slots promotion angering many customers who thought their losses would be refunded in cash. Instead, they were gradually credited to a Revel player account over a period of several months, with restrictions on when they could be used.
For the first nine months of this year, Revel ranks eighth among the city’s 12 casinos in terms of the amount of money won from gamblers, at $116.3 million. October figures are due out on Tuesday.
Revel also announced it has received additional financing and it intends to operate normally while it considers its future.
One of the advisers it hired last week helped it through its bankruptcy case in March. Moelis & Co. also helped the Tropicana Casino and Resort look for a buyer in bankruptcy court in 2009, eventually helping it complete a sale to Carl Icahn.
When Revel opened, its owners viewed it as a destination resort that just happened to have a casino, and marketed the property to high-end leisure travelers and companies seeking to book group events. Some customers complained its restaurant prices were too high and took their business elsewhere.
After the bankruptcy, new ownership led by Chatham Asset management, part of a lender group, took over.
The casino set out to increase its share of the gambling market and appeal to lower-end customers. A day before the “strategic alternatives” announcement was made, Revel issued a press release about low-cost dining options; one of its restaurants offers breakfast for $3.99, including eggs, bacon and potato wedges.
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