It’s everyone’s dream to bust the house, but it’s kind of sad to see this happen.
It looks like New Jersey’s revitalization plans for Atlantic City aren’t going exactly as planned as the $2.4 billion Revel Casino Hotel filed for bankruptcy last week. While not a huge shock given the cost of the property and its failure to attract clientele, it’s still a bit of a crushing blow for the state.
But there is good news in all of this. While the property filed for creditor protection, it did manage to obtain a $125 million loan to make sure the resort stays open while it looks for a new owner. If the property doesn’t sell soon, doors could be shuttered by August 18th.
Will anyone buy the property? Definitely not for $2.4 billion. But it could be a bargain for the right investor. Analysts peg the property to be worth about $300 million.
At 57-storeys high, Revel is the tallest building in Atlantic City, towering over smaller casinos along the boardwalk. When it opened its doors, it was designed to be a lot like City Center in Las Vegas, so it was explicitly built to thrive even without gamblers.
Unfortunately, while people spend days or weeks in Vegas, most people head to Atlantic City for a few hours. It’s more of a day-trip type place during the week, much like the majority of Atlantic City. If Revel closes, this would be the second casino to go under in 2014. The Atlantic Club closed down in January.
So can New Jersey do anything to revive Atlantic City? Aside from injecting private enterprise with billions and billions of dollars to totally revamp the area, every hotel, every casino, and every nook and cranny, I’m not so sure.
Atlantic City is facing huge competition from casinos that are open or are opening in Delaware, Maryland, New York, and Pennsylvania. In 2006, New Jersey gambling revenue was at an all-time high of $5.2 billion. Last year, it fell to just $3 billion.
I think the main problem is that Atlantic City is still living in the past, focusing on gambling as its primary attraction. Considering there are tons of casinos within a few hours’ drive, plus Vegas within a 4-hour flight, Atlantic City isn’t as much of an attraction as it might have been 30 years ago.
The best way for Atlantic City to thrive? Re-invent itself. Do something completely different and leave the casino gambling to the online world.