Sun | Feb 25, 2018

Moody’s reports Revel casino sale, owner denies it

Published:Wednesday | December 13, 2017 | 12:00 AM
This May 10, 2012, photo shows the exterior of the former Revel casino in Atlantic City, NJ.
This May 10, 2012, photo shows the exterior of the former Revel casino in Atlantic City, NJ.
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A Wall Street ratings firm said Monday that a Colorado company is buying Atlantic City's former Revel casino for US$200 million, but the mercurial owner of the shuttered casino insists there is no deal.

Moody's Investors Service issued a report Monday saying the US$2.4-billion casino will reopen in May under the ownership of AC Ocean Walk LLC, a group controlled by developer Bruce Deifik. Moody's says its report was based on talks with the buyers, who outlined their plans to the agency.

But Glenn Straub, who bought Revel from bankruptcy for US$82 million, insists he has not sold it to anyone.

"No ... way," Straub told The Associated Press. "Categorically, there is no deal."

"If someone has a check, I do sell assets," he said. "We're not stopping anybody from bringing a check in. If you want to buy it, come in and we'll check you out. But nobody has."

Deifik's lawyer did not immediately respond to a request for comment.

Straub has maintained for months that there is no agreement to sell Revel, despite increasing evidence that things are moving towards a sale. For instance, filings in a court proceeding involving whether Straub needs a casino licence to open Revel under the name Ten include details of a mortgage the proposed buyers have obtained.

Moody's report includes previously unavailable details, including the proposed May 2018 opening of the casino; its plan to operate 100 table games, 2,000 slot machines, and 1,399 hotel rooms; several swimming pools; a spa; night clubs, and 13 restaurants. The report goes into detail about financing AC Ocean Walk has lined up, and assesses its chances of success.

Risks include reopening a business that failed once and has all its earnings concentrated in a single property. There are concerns about Atlantic City's ability to absorb two new casinos in 2018. The former Trump Taj Mahal casino is reopening in the summer as a Hard Rock casino resort.

 

GAME-CHANGER

 

Positives include the US$175 million the new owners plan to invest in the property, the likelihood it will gain market share given the newness and overall quality of the property, and what Moody's called the buyers' "good liquidity".

Revel opened in April 2012, intended to be a game-changer for Atlantic City's casino market by focusing on high-end leisure travellers. It was the only casino in town to ban smoking, eschewed bus-riding day trippers, and did not offer a buffet. Its concert tickets to events at its 5,000-seat auditorium set records for costliness in the Atlantic City market.

But Revel never caught on with most gamblers. Players who wanted Vegas-style glitz and glamour already had the Borgata, and lower rollers returned to more familiar gambling halls after checking out Revel a few times.

It went bankrupt twice, and shut down in September 2014, a little more than two years after opening, never having come close to turning a profit.

Since buying it in a bankruptcy court sale for US$82 million in April 2015 at 5 cents on the dollar from what it cost to build the casino Straub has zigged and zagged over his plans for the property. The latest of many lawsuits he launched involves his assertion that he should not be required to obtain a casino licence because he won't be running the casino; an outside operator would be tasked with running the gambling business.

New Jersey regulators have ruled that Straub does indeed need a licence to operate a casino, and he is challenging them in state appeals court in a case that remains pending.