When the Revel Casino Hotel opened its doors two years ago, it was hailed as the start of a new era for New Jersey's struggling Atlantic City gaming industry. Instead, it's proven to be yet another losing hand for the declining Jersey Shore town.
As many media reports noted, Revel declared bankruptcy Friday for the second time in as many years. The owner of the Atlantic City Boardwalk property has warned that the casino, which employs more than 3,100, will have to shut its doors if a buyer can't be found.
Casino Control Commission Chairman Matthew Levinson, who's in charge of regulating the state's 11 casinos, and Bob McDevitt, the head of the union representing 1,000 Revel workers, both told the Press of Atlantic City that they were optimistic that a white knight would emerge.
Others aren't so sure, given the struggles of Atlantic City's casinos and a glut of gaming properties throughout the Northeast.
"The casino is a loser," said Alan Woinski of the Gaming Industry Weekly Report, in an interview, adding that the resort was "doomed from failure from the beginning. There is only so much money that you are going to want to put in it."
Revel tried to attract customers by focusing on amenities other than gaming, a strategy that Woinski and other experts say backfired. Woinski says he found Revel to be "sterile." That view wasn't unique. Indeed, as The New York Times and others have noted, the resort has $260 million in debt and analysts estimate it it's worth less than $300 million.
Revel also has had a rocky history. Morgan Stanley (MS) was Revel's original backer but walked away from the project in 2010 and took a write-down on its investment. Later, the state of New Jersey invested $260 million in Revel when it had stalled.
According to the state Division of Gaming Enforcement, revenue at New Jersey casinos fell 8.2 percent in May. Even more worrisome was the decline in Internet gaming revenue, a business the state has touted as a growth engine.
Whoever buys Revel "will have to grow that market," said David Schwartz, director of the University of Nevada Las Vegas' Center for Gaming Research. "They can't keep stealing market share from other people."