2.4 billion dollar Revel Casino Hotel shuts down in Atlantic City after only 2 years

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LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
http://www.usatoday.com/story/money...-revel-starts-closing-after-2-years/14932507/

ATLANTIC CITY, New Jersey (AP) — The most spectacular and costly failure in Atlantic City's 36-year history of casino gambling began to play out Monday when the $2.4 billion Revel Casino Hotel emptied its hotel.

Its casino will close early Tuesday morning.

Revel is shutting down a little over two years after opening with high hopes of revitalizing Atlantic City's struggling gambling market. But mired in its second bankruptcy in two years, Revel has been unable to find anyone willing to buy the property and keep it open as a casino. It has never turned a profit.

"It's kind of sad," said Andrew Tannenbaum of Edison, who has stayed at Revel a dozen times in the past year. "Compared to other casinos, this was a lot nicer. There wasn't the riff-raff here. But I think they overspent, went overboard and got in over their heads. When the Borgata opened, that should have been the last of the high-end casinos for Atlantic City."

Revel will be the second of three Atlantic City casinos to close in a two-week span. The Showboat Casino Hotel closed its doors Sunday, and Trump Plaza is closing Sept. 16.

So what killed Revel?

Analysts and competitors say it was hampered by bad business decisions and a fundamental misunderstanding of the Atlantic City casino customer.

"The timing of it could not have been worse," said Mark Juliano, president of Sands Bethlehem in Pennsylvania and the former CEO of Trump Entertainment Resorts in Atlantic City. "The financial climate while Revel was developing and when it opened were completely different."

Revel officials declined to comment.

The casino broke ground just before the Great Recession. It ran out of money halfway through construction and had to drop its plans for a second hotel tower while scrambling for the remaining $1 billion or so it needed to finish the project. When it opened in April 2012, it was so laden with debt that it couldn't bring in enough revenue to cover it.

The idea behind Revel was to open a totally different resort, a seaside pleasure palace that just happened to have a casino as one of its features. That included Atlantic City's only total smoking ban, which alienated many gamblers; the lack of a buffet and daily bus trips to and from the casino; and the absence of a players' club. By the time those decisions were reversed, it was already too late. High room and restaurant prices hurt, too.

"If there had been a range of new attractions and potential customers with enough discretionary income, I think that Atlantic City could have absorbed the new capacity," said David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas. "That's certainly what happened with Borgata more than 10 years ago. But the market that Revel foresaw for its property just didn't materialize, partially because of the growing perception that the city wasn't ready for that kind of customer. At the same time, Revel didn't have a plan to successfully market to the traditional Atlantic City customer."
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Damn AND the Showboat is closing? Fuck I been there. It's gonna be an empty wasteland with all that real estate going dead soon
 
lol @ banning smoking

It's no wonder an establishment that treats its customers as children who can't perform their own cost-benefit analysis on use of a harmful substance shut down.
 
Well, looks like they... gambled and lost.

You've gotta know when to fold.

They went all in and got dealt a bad beat.

That's what happens when you're playing high stakes.

They let the chips fall where they may.
 
"Sorry guys, no riff raff, no smokers, no buses, no poors.

Hey wait come back!"

I feel like half of the AC gambling crowd is old ladies burning through their retirement funds, what the hell were they thinking?
 
Sub_Level said:
lol @ banning smoking

It's no wonder an establishment that treats its customers as children who can't perform their own cost-benefit analysis on use of a harmful substance shut down.
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I feel like having a hotel/casino/etc being smoke-free is less about making a statement on public health, and more about the comfort of guests. Atlantic City has a reputation of being a low-class destination - the sort of place where the smell of cigarettes and cheap seafood buffets has soaked into the walls. If they were serious about setting a new standard for the community, banning smoking the place to start. But the new audience just didn't arrive to support the change. A noble effort nonetheless.
 
Sub_Level said:
lol @ banning smoking

It's no wonder an establishment that treats its customers as children who can't perform their own cost-benefit analysis on use of a harmful substance shut down.
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No one gives a fuck if you want to destroy your own health (well, actually, that's a much bigger waste of tax payer money in the long run than pretty much anything else tax money is being spent on), but smoking has bad effects on people who don't want to subject themselves to people's stupid, irrational, inconsiderate, jerk-ish behaviour and not just the stupid people who smoke. It's more about protecting people who don't smoke from the harmful effects of being around people who are smoking than protecting people who smoke.
 
Yeah, the $300 million was ridiculous.

Also, the whole concept of putting that kind of place in the middle of a... sub-optimal spot that was as classy as a strip mall. They were never going to get the market they were going for. I can't believe this idea wasn't conceived by some dude was blowing through an mountain of coke while marathoning Bond.
 
Link said:
Good to see that $300 million in state pension funds was put to good use.
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It's a $300m investment in the hedge fund that owns the casino, it's not an investment into the actual casino.

According to hedge fund aggregator sites, Chatham has ~$2bn worth of assets under management. This is just one part of their portfolio that went bad.

EDIT
This quote seems relevant:

"Therefore no pension fund assets were expected to be invested in that enterprise," according to the minutes. But the minutes also note that Chris McDonough, the investment division's director, said the division could not guarantee what could happen in the future, since it could not override the managers' fiduciary duty and investment selection."
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Tons of Indian Casino opened in nearby states. You don't have to drive all the way to Atlantic City anymore.
 
Sub_Level said:
lol @ banning smoking

It's no wonder an establishment that treats its customers as children who can't perform their own cost-benefit analysis on use of a harmful substance shut down.
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It's a business tactic; and it might have attracted me.

Although I'm used to Vegas and it's massive air conditioning units that seem to suck much of the trace of cigarettes out of the air. Feel like I'm in a vacuum. So I also might have avoided the place if I read it was kind of dead.
 
It's really sad honestly. Atlantic City is a fun town, but so much of their revenue was stolen by surrounding states legalizing casinos. At first I was sort of on the side of legalizing it because it seem ridiculous that tax dollars should flow from surrounding states into Atlantic City, and I thought those tax dollars would be better spent in their home states. The problem is that be legalizing it they killed Atlantic City as a destination, and in the mean time we ended up with a bunch of casinos that are basically giant slot barns. None of them have the amenities, the hotels, the entertainment, the dining, etc. I've been to a few of them outside of AC and they are just frankly not as good as the AC experience was.

AC has its own blame though. They never marketed it properly. They never exploited the beach. There are so many NJ beach towns that are huge destinations just for the beach. Ocean City is minutes away and it's super popular. The casinos were so busy being insular and not focusing on family friendly aspects and exploiting that oceanfront that people never came for that. They just wanted to trap people on the casino floor, instead of treating the casino as a source of augmented profits of a beach resort.
 
The 47-story Revel, touted by Gov. Chris Christie as a model for Atlantic City's rebirth, has been a tremendous failure. It lost more than $100 million in its first year of operations.
Touted as a job creator, Revel was expected to employ 5,500 people but now has about 2,800 on staff.
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So the tunnel was a bad idea but this was a good idea? Genius.
 
AbortedWalrusFetus said:
It's really sad honestly. Atlantic City is a fun town, but so much of their revenue was stolen by surrounding states legalizing casinos. At first I was sort of on the side of legalizing it because it seem ridiculous that tax dollars should flow from surrounding states into Atlantic City, and I thought those tax dollars would be better spent in their home states. The problem is that be legalizing it they killed Atlantic City as a destination, and in the mean time we ended up with a bunch of casinos that are basically giant slot barns. None of them have the amenities, the hotels, the entertainment, the dining, etc. I've been to a few of them outside of AC and they are just frankly not as good as the AC experience was.

AC has its own blame though. They never marketed it properly. They never exploited the beach. There are so many NJ beach towns that are huge destinations just for the beach. Ocean City is minutes away and it's super popular. The casinos were so busy being insular and not focusing on family friendly aspects and exploiting that oceanfront that people never came for that. They just wanted to trap people on the casino floor, instead of treating the casino as a source of augmented profits of a beach resort.
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Well, according to the article that's exactly what Revel casino was trying to do. Though at this point it was probably too little too late for Atlantic City, and that probably needed to be adopted by the city as a whole instead of the one single casino.
 
I had a couple suites and rooms there and it was beautiful.... Weird to think that the whole building will be like those abandoned malls.... Would love to sneak in and walk around the building with everyone gone.

No comps, no smoking, and no bus service killed them before they had a chance.
 
Hasphat'sAnts said:
It's a $300m investment in the hedge fund that owns the casino, it's not an investment into the actual casino.

According to hedge fund aggregator sites, Chatham has ~$2bn worth of assets under management. This is just one part of their portfolio that went bad.

EDIT
This quote seems relevant:
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Exactly. Nothing bad happened. The money isn't tied to the hotel and it didn't suddenly vanish like some think. The deal in fact seems to have been made with the expectation that the hedge fund would dump the casino.

The state agency that oversees the multibillion-dollar employee pension funds voted late last year to invest $300 million with Chatham Asset Management, the hedge fund that owns 28 percent in the troubled casino property.

The investment deal is complex. Although the state plans to invest in Chatham, treasury officials say the transfer of funds won't happen until later this year — when Chatham said it hopes to shed itself from the faltering casino.
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EatinOlives said:
Well, according to the article that's exactly what Revel casino was trying to do. Though at this point it was probably too little too late for Atlantic City, and that probably needed to be adopted by the city as a whole instead of the one single casino.
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Yeah, and it was a good idea, just executed slightly wrong, and never advertise correctly. It wasn't something Revel could do on its own. It was very family un-friendly. It was very expensive to stay, and there were no cheap food options in it. It was basically more geared toward adults only from my experience, or too expensive to afford a family stay. I can get a room at the Borgata for like $60 sometimes. Still, the biggest factor in its demise was that it basically opened in the midst of the terrible economy.
 
"It's kind of sad," said Andrew Tannenbaum of Edison, who has stayed at Revel a dozen times in the past year. "Compared to other casinos, this was a lot nicer. There wasn't the riff-raff here. But I think they overspent, went overboard and got in over their heads. When the Borgata opened, that should have been the last of the high-end casinos for Atlantic City."

No it's not you daft twat, it's that "riff raff" that keeps these degenerate shitholes open. Afterall, they're not built on winners.
 
Atlantic City - "Speluking capital of the world in 2020"

Done Caves/Dead Malls?, now try to climb to the 48th floor of Revel Casino!
 
For 50 dollar chicken wings... it better be a spread that covers three tables.

Edit: Either that, or they hired Emeril to cook in the fucking kitchen.
 
^ Those must be the best potato chips ever.

Revel will be the second of three Atlantic City casinos to close in a two-week span. The Showboat Casino Hotel closed its doors Sunday, and Trump Plaza is closing Sept. 16.
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Please tell me Donald Trump is losing an assload of money...
 
xbhaskarx said:
Please tell me Donald Trump is losing an assload of money...
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From one article I found:

Trump Plaza, which cost $210 million to build, opened in May 1984 as one of Donald Trump's pet projects. The real estate mogul has since limited his dealings in Atlantic City to a 10 percent stake in Trump Entertainment Resorts and does not control its day-to-day operations.
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Depends on what he sold his stake for and when he did it. He could have leveraged his ownership of the casino at one point or another, might have done the opposite and put more money into it at some point, might have paid himself a salary at some point.

Possible he made out fine... possible he lost over the years.
 
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