Less than five months after opening with distressingly low revenues, Atlantic City's newest casino is seeking some breathing room from its lenders.
Source: revelresorts.com
Revel, which spans 6.3 million square feet and stands 47 stories tall, provides a comprehensive beachfront resort experience with many levels.
Following a slow start out of the gate and a $35 million operating loss, Revel is asking its lenders to increase the amount of credit it can draw on.
The casino, which opened in April, currently has $30 million worth of credit, but wants to increase that to $100 million.
Revel has been mired in eighth place out of Atlantic City's 12 casinos in terms of the amount of money won from gamblers, and analysts say it is not taking in nearly enough to make its interest payments.
Revel CEO Kevin DeSanctis says the extra credit will get Revel through 2013 with a significant cushion.
"We appreciate the support of our investors," he said in a statement Monday. "Upon completion of this facility, we will have significant liquidity cushion through 2013 and beyond. We are excited about what we have delivered from a product and experience perspective, and remain confident our strategy and differentiated economic model will result in significant value creation for our stakeholders."
Revel said it currently has a $50 million credit facility, but only has firm commitments for $30 million. Once the deal is completed, it would have commitments for a full $100 million. No timetable for closing a deal was given.
The opening of the $2.4 billion casino resort at the northern end of the Boardwalk had been seen by many as crucial to the revival of Atlantic City, which recently lost its status as the nation's No. 2 gambling market to Pennsylvania.
But fierce competition from casinos in Pennsylvania, New York, Connecticut, Delaware and Maryland have cut deeply into Atlantic City's business, sending New Jersey's casino revenues plunging from $5.2 billion in 2006 to $3.3 billion last year.
Revel posted a second-quarter gross operating loss of $35 million, or $18 million excluding one-time preopening charges, according to the state Division of Gaming Enforcement.