Revel Casino Hotel Proves to be a Real Gambling Disaster
Posted: September 4, 2014
Updated: June 4, 2017
The bad economy in the gaming industry doesn’t seem to be getting any better with Atlantic City’s Revel Hotel Casino among the recent facilities to have shut down.
The reason behind developing the highly touted Revel Casino Hotel was create a “hang-out” place for Wall Street financiers and bankers. Instead to travelling to Las Vegas to have a good gambling time, the casino was supposed to offer all the best gaming facilities including lavish US poker rooms to the New York high rollers.
However the once ambitious project has now succumbed to the same fate as all the other casinos in the miserable gaming economy that has befallen upon Atlantic City. Revel has cost a fortune to construct while now the closure has brought on another massive outlay for the investors.
Now, Wells Fargo & Co. and JPMorgan Chase & Co. may become the new owners of the company after getting approval from the court to take over with $125 million in funding. Morgan Stanley and Capital Group Cos. were the original investors, but due to the dire circumstances made the call to go ahead with the deal.
Experts believe that the reason why Revel was unsuccessful can be attributed to several factors. The local market was not ready for such an enterprise which was couple with bad timing in the economy, while the poor design also had it effect. The introduction of online gambling sites in the US also didn’t help.
Charles Geisst, finance professor at Manhattan College in New York and author of “Wall Street: A History,” commented on the matter of the complex. “The check-in desk at Revel was on the 11th floor, reached by escalator. That’s not planned or invested in by someone who understands the hotel business.”
Donald Trump is a well-known business magnate with strong ties to real estate, while also contributing his time to a number of other businesses. Before the onset of the current economic circumstances, his name used to bear the front of three casinos in Atlantic City. However, now he wants them all removed considering the climate.
Trump highlighted that state at which Atlantic City is now and that the town is desperate need of change for its survival. “I see what’s happening in Atlantic City; it’s just too much competition. There’s too much pressure from Pennsylvania, Maryland, and ultimately everybody’s going to do badly because they’re looking at casinos as a panacea.”
Michael Garrity was a principal in Morgan Stanley’s private-equity department in mid-2000s and previously an analyst at Putnam Investments and investment banker at Rothschild Group. He explained how bankers, analysts, and all the Wall Street guys don’t want to travel to gambling hubs solely for gaming but rather to have fun, according to gambling news.
“I’ve spent a lot of years on Wall Street. What’s always amazed me, the thousands of traders, analysts, private-equity guys, bankers that will jump on a plane, fly four to five hours to Vegas, lose the day on the way back. Because they’re gamblers? No. Because they want to have fun. And that was really the premise behind Revel.”
The reason behind developing the highly touted Revel Casino Hotel was create a “hang-out” place for Wall Street financiers and bankers. Instead to travelling to Las Vegas to have a good gambling time, the casino was supposed to offer all the best gaming facilities including lavish US poker rooms to the New York high rollers.
However the once ambitious project has now succumbed to the same fate as all the other casinos in the miserable gaming economy that has befallen upon Atlantic City. Revel has cost a fortune to construct while now the closure has brought on another massive outlay for the investors.
Revel cost a fortune but didn’t pay out in the end
• Revel Hotel Casino cost $2.4 billionOriginally, the price of building Revel Hotel Casino is rumored to have cost a staggering $2.4 billion. It didn’t manage to live up to its enormous price tag as it went through two bankruptcies and an exhaustive 10-month search for a new investor. After much deliberation the original backers decided to call it time on the casino as they couldn’t find any solutions.
• Revel went through two bankruptcies
• Atlantic City may have to revert to hospitality to save the town
Now, Wells Fargo & Co. and JPMorgan Chase & Co. may become the new owners of the company after getting approval from the court to take over with $125 million in funding. Morgan Stanley and Capital Group Cos. were the original investors, but due to the dire circumstances made the call to go ahead with the deal.
Experts believe that the reason why Revel was unsuccessful can be attributed to several factors. The local market was not ready for such an enterprise which was couple with bad timing in the economy, while the poor design also had it effect. The introduction of online gambling sites in the US also didn’t help.
Charles Geisst, finance professor at Manhattan College in New York and author of “Wall Street: A History,” commented on the matter of the complex. “The check-in desk at Revel was on the 11th floor, reached by escalator. That’s not planned or invested in by someone who understands the hotel business.”
Hospitality seems like a viable solution for Atlantic City
Now New Jersey Governor Chris Christie has to come up with a plan on how to save the economy of Atlantic City. The case of Revel Hotel Casino will serve as another pointer of where the future of AC may lie. There has been strong indication that they may revert back to the original purpose of the city by concentrating on hospitality instead of gambling.Donald Trump is a well-known business magnate with strong ties to real estate, while also contributing his time to a number of other businesses. Before the onset of the current economic circumstances, his name used to bear the front of three casinos in Atlantic City. However, now he wants them all removed considering the climate.
Trump highlighted that state at which Atlantic City is now and that the town is desperate need of change for its survival. “I see what’s happening in Atlantic City; it’s just too much competition. There’s too much pressure from Pennsylvania, Maryland, and ultimately everybody’s going to do badly because they’re looking at casinos as a panacea.”
Michael Garrity was a principal in Morgan Stanley’s private-equity department in mid-2000s and previously an analyst at Putnam Investments and investment banker at Rothschild Group. He explained how bankers, analysts, and all the Wall Street guys don’t want to travel to gambling hubs solely for gaming but rather to have fun, according to gambling news.
“I’ve spent a lot of years on Wall Street. What’s always amazed me, the thousands of traders, analysts, private-equity guys, bankers that will jump on a plane, fly four to five hours to Vegas, lose the day on the way back. Because they’re gamblers? No. Because they want to have fun. And that was really the premise behind Revel.”
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