An Atlantic City casino has signed a new credit deal allowing it to borrow up to $100 million to continue operating. The new Revel, which opened in April to great fanfare, has had a disappointing summer.
But Revel CEO Kevin DeSanctis says the credit deal guarantees the business adequate operating funds through 2013.
Atlantic City and N.J. officials hoped the luxury casino-resort could help the city turn around its finances. Atlantic City faces new competition from surrounding states and gaming revenues have fallen.
Gordon MacInnes of New Jersey Policy Perspective says it’s clearer why Revel’s early bankrollers backed out. Morgan Stanley decided to take a $1.4 billion loss rather than stay involved with the project.
MacInnes says expectations have been too high for a flawed idea — “building a large supposedly destination kind of resort in Atlantic City at a time when its share of the casino market is declining so rapidly.”
In a statement, DeSanctis continued to express optimism, despite major credit ratings agencies Moody’s and Standard & Poors both downgrading their outlook for Revel, which posted a quarterly loss of $35 million.
Bob McDevitt, president of the local Unite–HERE casino union, cited $27 million in liens and lawsuits filed against Revel by contractors and vendors as proof of financial weakness. But DeSanctis says those are normal post-construction claims that will be ironed out and paid within weeks.
The Associated Press contributed to this report.