Atlantic City Revenues Continue to Fall
It seems that times are getting tougher in Atlantic City as it was reported that earnings from this July were down 9.5% from the same month last year. There were large hopes that the new $2.4 billion Revel casino would grow the market and bring in new tourists; however, so far this has not happened.
Last month Revel generated just $17.5 million in revenue and according to industry observers the chances of an early bankruptcy has increased. Revel had the eighth highest revenue out of the twelve casinos in Atlantic City and only just ahead of its much smaller competitors.
However, it is not just Revel casino that is suffering. Every one of the casinos has reported a drop in revenue ranging from 30% at Bally’s to 0.6% at Tropicana. One of the reasons is that there was one less weekend this July than last and the fact that the Fourth of July fell in the middle of the week this year is unlikely to have helped.
While Revel did generate more Revenue in July than June (up from $14.9 million), it is still a long way off the $25 – $30 million per month that Wall Street projected it would need to stay solvent and pay its bonds.
Painting a very grim picture, Andrew Zarnett from Deutsche Bank AG said that “unless Revel can dramatically increase their gaming revenue, it will be hard for them to generate free cash flow and therefore, make their debut service payments.”
Of course, Kevin DeSanctis, Revel’s chairman and chief executive, had a more positive outlook. He commented that they have “built a great product, our operations are improving and we remain confident our economic model will result in significant value creation for our stakeholders.”