If there ever was a physical monument to the struggles Atlantic City endured over the past five years, it was the Revel.
But now it appears fortunes have turned for the shuttered casino, as according to the AP, the property has been purchased by Colorado developer Bruce Deifik for $200 million.
Deifik’s purchase ends billionaire Glenn Straub‘s tumultuous reign as owner, a tenure which began in April 2015 when Straub bought the property in bankruptcy court for the bargain price of $82 million.
The Revel/TEN could reopen as early as this summer, ending its four-year distinction as Atlantic City’s biggest eyesore. It will be rebranded as Ocean Resort Casino.
A long and winding road
The Revel, which cost a staggering $2.4 billion to construct, first opened its doors in April 2012. But some odd management decisions, an even odder layout, and the general decline of the Atlantic City casino market quickly forced the upscale casino to file Chapter 11 in 2013. Revel survived its first bankruptcy scare, but not its second. In the absence of a bailout, the ill-fated casino was forced to close on September 2, 2014.
After Straub finalized the purchase of the site — for just 3.42 cents on the dollar no less — a second round of difficulties began. Straub argued incessantly with regulators over standard occupancy and liquor licensing procedures, insisting that as a landlord, and not a casino operator, he didn’t need an operating license.
The billionaire somewhat famously cited New Jersey as having “an anti-business attitude.”
Throughout his tenure, Straub floated myriad ideas for the rebranded casino, some ambitious, others downright wacky (i.e. the Tower of Geniuses). But ultimately, outside of a few modest improvements and the installation and then demolition of a rope-climbing course, no real progress was made toward a grand reopening, despite numerous promises from Straub.
An ambitious roadmap
Although any firm reopening date will likely be met with eye-rolls, Deifik appears committed to staying on point. Last month, Moody’s released a report outlining the roadmap for the casino, which includes $175 million in reinvestments, and details as to how AC Ocean Walk — the group controlled by Deifik — will finance the project.
Deifik plans for the new casino to house 100 table games, over 2,000 slot machines, and 1,399 hotel rooms, in addition to 13 restaurants and other amenities. Also, the casino will be poised to capitalize on legal sports betting, if and when it goes live, as Deifik is planning to build a dedicated facility. The fate of sports betting in New Jersey is currently in the hands of the US Supreme Court, which is expected to reveal its decision on the case in the first half of 2018.
According to the AP, “analysts are mixed on whether Atlantic City’s seven operating casinos can handle two more competitors.” And rightfully so. Consider that this is a city that supported 12 land-based casinos in 2014, but was desperately in need of consolidation.
The shuttering of five casinos was largely a positive for AC, resulting in a revenue uptick for the remaining properties.
However, total land-based revenue has yet to rebound, dropping from $3.05 billion in 2012 to $2.414 billion in 2015, and again to $2.406 billion in 2016. Throughout the first 11 months of 2017, brick and mortar casinos generated $2.227 billion, putting them on pace to roughly match the year-end totals of the past two years.
Despite the stagnant numbers, the launch of Hard Rock Casino, slated to open on Memorial Day, is generally being met with optimism. Hard Rock is a recognized and respected brand that through its unique attributes, “can bring new customers who otherwise would not have traveled to Atlantic City.”
Ocean Resorts Casino will likely face a more difficult path to profitability, as the name will mean relatively little to AC tourists. Its success may hinge on what Deifik and company bring to the table by way of innovation and luxury. And even should Ocean Resorts succeed, there is always the threat that its foot traffic will be cannibalized from existing casinos, prompting another possible closure.
Will there by an Ocean Resorts Casino online site?
It seems plausible, even likely, that a Ocean Resorts branded online casino will coincide with the launch of the land-based property. NJ online gambling has proven a boon for the city, accounting for 5.8% of total industry gaming revenue in 2015, and 7.6% in 2016.
That percentage should catapult to nearly 10% in 2017, as the online arm of the industry is expected to announce upwards of $250 million in gross gaming revenue when the final annual figures are released this Friday.
Admittedly, the days of explosive growth do appear to be coming to an end, replaced by more tempered gains. However, there does still appear to be an appetite for new online casinos in New Jersey.
For all its struggles, even TEN was able to launch a social casino site, which appeared to act as a precursor for a full real-money rollout. Expect both Hard Rock and Ocean Resorts to toss their hats into the arena in 2018.
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