The recently concluded East Coast Gaming Congress was filled with high-profile speakers. A few of these attendees made some headlines with their remarks, including Hard Rock president James Allen who told the assembled masses from the iGaming industry that the rumors were true, and the Hard Rock is indeed interested in adding the struggling Revel Casino in Atlantic City to their company portfolio, with the caveat, “if the price is right.”
The Hard Rock has long been rumored to be looking into purchasing the Revel Casino, taking it out of bankruptcy, and hopefully turning around the lavish property which has been an unmitigated disaster since it opened in 2012.
How bad has it been? In 2013 the Revel filed for Chapter 11 Bankruptcy protection, less than a year after opening.
The Revel’s struggles
The Revel was plagued with obstacles, setbacks, and failures from the start, and by the time the property opened in 2012 (needing a last minute bailout from the state to get over the final hump) the price tag of the Revel was in the neighborhood of $2.4 billion – that’s “Billion” with a “B” you are reading that right
The Revel may have been the newest, the swankiest, and the nicest property in Atlantic City, but its high cost really limited its ability to spend money in other areas. Even though James Earl Jones all but guaranteed it in Field of Dreams, the Revel learned, “If you build it they may not come.”
Further complicating matters was the Revel’s decision to go “high-end” with their casino / hotel. This move turned off a lot of locals, and visitors to Atlantic City who are more budgetary minded in their vacation getaways than the free-wheeling high-rollers who head to Las Vegas.
So instead of changing the Boardwalk and Atlantic City, Atlantic City changed the Revel, as the casino has now moved away from their high-end ambitions and now caters to a larger cross-section of society.
According to recent estimates, the $2.4 billion Revel Casino now has an estimated value of less than $100 million. The devaluation along with the Revel sitting in bankruptcy, yet still considered the nicest property in AC, may make it the perfect time for a company to swoop in and pick up the property.
Hard Rock Behind-The-Scenes
The rumors regarding the Hard Rock’s interest in the Revel began months ago when the company asked the New Jersey Division of Gaming Enforcement about licensing procedures in the state and what would be required of the Hard Rock to gain a license in New Jersey.
The Hard Rock was later deemed suitable by the DGE in a preliminary filing by the way.
But even with his “if the price is right” dictate, Allen also wondered aloud what they could bring to the property that would be able to turn it around, saying the property has a lot of design flaws. Thus, implying the property would still require a healthy renovation investment despite being fresh out of the box.
The Hard Rock isn’t the only corporation that has been linked to the Revel. In January some whispers were circulating that Caesars (of the $24 billion debt) was also sniffing around the Revel, and might put in a bid on the property according to Bloomberg.
New owners could shakeup online gambling
If the Hard Rock (or perhaps another AC outsider) adds the Revel to their balance sheet the already overcrowded online gambling market could have to make room for yet another body.
The Revel, like all AC casinos, comes with what amounts to a ready-made online casino license. The new owners might be able to capitalize on their new brand and the buzz surrounding the sale of the mega-casino to help launch a successful online poker /online casino site.
Of course, for this to happen everything would have to fall into place perfectly:
- The new Revel would have to be a marked improvement and create buzz and interest
- They would have to partner with a proven online poker provider
- They would have to have a perfect online launch to displace the companies already in the industry
The big question is whether the Hard Rock or any other company would be able to not only turn around the Revel but launch online gambling as well, or if they would even want to take on both sizable tasks at the same time.