It didn't take a crystal ball to see this coming. The Wall Street Journal reported this week that Revel, the struggling $2.4 billion casino hotel in Atlantic City, has hired bankers and lawyers to prepare for a possible bankruptcy. Revel warned federal regulators last year that a bankruptcy or foreclosure was possible. The Journal's latest report shows Revel is indeed headed in that direction.
Just last year, Gov. Chris Christie called Revel, a 20-acre boardwalk casino hotel with a planned 1,898 guest rooms, a key to the future of Atlantic City. If Revel is the key, the city's future looks bleak. Perhaps this latest disclosure about Revel teetering on the edge of bankruptcy will get Christie to rethink his stubborn insistence that casino-style gaming must be limited to Atlantic City.
Unless Atlantic City can attract one or more airlines that can bring travelers from all parts of the eastern half of the U.S. to town, it will have no shot of becoming the Las Vegas of the East some have envisioned for decades. Even with access to a wider market, the competition for the gambling dollar continues to intensify, with ever-expanding opportunities to gamble in nearby Philadelphia and other cities in Pennsylvania and New York.
While Christie has steadfastly refused to consider allowing New Jersey's gaming industry to extend beyond Atlantic City, many people are taking their dollars to other venues.
Meanwhile, Atlantic City casinos are on a losing streak, and Revel is leading the pack. This week, the state reported Revel took in less than $8 million in January - its second-worst month ever. And a filing Monday with the Securities and Exchange Commission by Revel said the company was amending an agreement with creditors for the fourth time.
Worse still, the state backed this behemoth with hundreds of millions of dollars in tax breaks. The state agreed to reimburse Revel $261.4 million in business, sales and hotel taxes over the next 20 years.
If the casino does fall victim to its own outsized vision and the growing gaming competition in nearby cities and states, the state will have dropped millions chasing a pot of gold at some rainbow's end.
Revel's troubles, coupled with the long string of annual revenue drops the casinos are experiencing, makes a mockery of Christie's rosy view that Atlantic City's monopoly on casinos is the recipe for financial success.
Staking so much on Atlantic City casinos as the exclusive venue for casino gambling in New Jersey was always a bad idea and a bad bet. It is time for the governor to consider the obvious: opening up gaming to other parts of the state.