Spin the tale however you choose, but the Emperor is naked and Revel et al misjudged the saturated market, overstated revenue projections. took a gamble and lost.
Atlantic City mostly attracts Low Rollers and always has. Governor Chris Christie gambled taxpayers' $$$ on New Jersey's Gambling Addiction and lost. Unfortunately, the Casinos are taking the Atlantic City taxpayers down with them.
Sweeney: Revel casino's finances 'dire'
ATLANTIC CITY, N.J. —ATLANTIC CITY, N.J. (AP) - New Jersey's state senate president says the new Revel casino's finances are "dire," and that he fears Atlantic City's newest resort could fail.Stephen Sweeney says Revel owes $12 million in unpaid taxes to Atlantic City, which had planned a tax sale to recoup the money. He's also concerned about contractors and vendors who still haven't been paid eight months after the casino opened.
Sweeney wrote Friday to David Rebuck, director of the state Division of Gaming Enforcement, asking for a detailed report on Revel's finances within a week. During the summer, Sweeney wrote a similar letter to the division, and was assured the state is keeping a close eye on all the casinos' finances.
"Since your letter, I have received a number of additional reports that Revel's finances have deteriorated considerably, and that the situation has become dire," Sweeney wrote in Friday's letter to Rebuck. "The casino appears to be burning cash at an alarming rate."
Revel received a $100 million line of credit in August to help it operate through 2013.
"I understand that these funds have evaporated and that the casino has reached out to secure additional funding to survive through the end of the year," Sweeney wrote.
In a prepared statement, Revel said it is starting to see signs of improvement. A spokeswoman also said Revel expects to lock down an unspecified amount of additional funding within the next 30 to 45 days.
"Revel's financial situation is not dire," the statement read. "Our investors and partners have shown a tremendous amount of support for Revel, and believe in our business model. The additional capital will provide us with the liquidity necessary to allow the market to recover from Hurricane Sandy, and execute our strategic build-out of exciting new gaming, food and beverage, and entertainment amenities. These new offerings will allow us to enhance our product, improve our customer experience, and create value for our stakeholders."
Lloyd Levenson, Revel's attorney, said the casino and the city both agreed to negotiate a settlement of three tax cases brought by the casino that challenges, among other things, the $2.4 billion assessed value Atlantic City has placed on Revel.
Asked how much the casino thinks it should be assessed at, Levenson would only say, "A lot less."
A joint statement issued Friday by the city and Revel said both sides hope to reach an agreement next month on Revel's true tax debt. Atlantic City is issuing $100 million in bonds this year for such refunds; last year's total was an additional $35 million in refunds.
Sweeney said he continues "to receive a flood of reports that (Revel's) creditors are still waiting to be paid for services rendered. I believe that serious attention to this issue is necessary to ensure that Revel's failures do not jeopardize the businesses that acted in good faith to provide various services to the casino. No business can afford to sit around and wait to be paid in this fragile economy.
"The consequences of the casino's collapse could have serious consequences for the region and the taxpayers, especially in light of the impact of Hurricane Sandy," Sweeney wrote. "I refuse to stand by and simply hope that the Revel will decide to meet its obligations and continue as a going concern."
In terms of gambling revenue, Revel has been mired near the bottom of Atlantic City's 12 casinos since opening in April. Revel says it is less dependent on gambling revenue than other casinos, but during the third quarter of this year, it reported a nearly $37 million gross operating loss.
Read more: http://www.vcstar.com/news/2012/nov/30/sweeney-revel-casinos-finances-dire/#ixzz2DqPVRGde
- vcstar.com
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