AC: Revel Close...Sale...Fail
Quote: aceofspadesA nicely done photo essay of Revel's last night
http://nickrayment.tumblr.com
Agreed. As much as I hated Kevin and UK, the place had so much potential and could have added and grown AC regardless of all the factors around the city. I just don't know if anyone can ever overcome the mess they created from a public and investor perception.
And the reality is if they come back under new ownership and do everything right it will be at the expense of other casinos and jobs in AC. The days of being a "game changer" are gone and not coming back for the casino previously known as Revel.
http://www.pressofatlanticcity.com/news/press/casinos_tourism/special_report/owner-of-hq-nightclub-in-revel-wants-to-stay-open/article_b9edc6f6-32eb-11e4-bc25-0019bb2963f4.html
Pythonese translation:
"Dead Collector: Bring out yer dead!
[A large man appears with a (seemingly) dead man over his shoulder]
Large Man: Here's one.
Dead Collector: Nine pence.
"Dead" Man: I'm not dead.
Dead Collector: What?
Large Man: Nothing. [hands the collector his money] There's your nine pence.
"Dead" Man: I'm not dead!
Dead Collector: 'Ere, he says he's not dead.
Large Man: Yes he is.
"Dead" Man: I'm not.
Dead Collector: He isn't.
Large Man: Well, he will be soon, he's very ill.
"Dead" Man: I'm getting better.
Large Man: No you're not, you'll be stone dead in a moment.
Dead Collector: Well, I can't take him like that. It's against regulations.
"Dead" Man: I don't want to go on the cart.
Large Man:' Oh, don't be such a baby.
Dead Collector: I can't take him.
"Dead" Man: I feel fine.
Large Man with Dead Body: Oh, do me a favor.
Dead Collector: I can't.
Large Man: Well, can you hang around for a couple of minutes? He won't be long.
Dead Collector: I promised I'd be at the Robinsons'. They've lost nine today.
Large Man: Well, when's your next round?
Dead Collector: Thursday.
"Dead" Man: I think I'll go for a walk.
Large Man: You're not fooling anyone, you know. Isn't there anything you could do?
"Dead" Man: I feel happy. I feel happy.
[The collecter paces for an idea, then whacks the body with his club, solving the problem]
" Some people might say the last thing in the world Atlantic City needs is another casino. I tend to differ. I think that the first thing that Atlantic City needs is another casino — a casino of quality such as Revel, a casino that’s a category killer, a casino that is built for the future of Atlantic City. I think that Revel’s success is going to be integral to the success of Atlantic City going forward. "
http://www.pressofatlanticcity.com/communities/atlantic-city_pleasantville_brigantine/a-conversation-with-revel-casino-hotel-president
Revel was a perfect storm of bad timing and poor decisions. Faltering economy, declining A.C. gaming revenues, poor floor lay out, ignoring gamblers in the beginning, building a "resort" in a economically challenged area etc. Perhaps if Revel had opened 10-20 years prior it would have been a viable business. But way too many things conspired to make it fail
Quote: sodawaterWell, this was one of the big problems with Revel. You did not need to go anywhere near the casino to go to the HQ nightclub, the HQ day (beach) club, or Ovation Hall (the concert venue). Those are the three biggest attractions Revel had, and their visitors were not passing through the casino at all. Downright stupid design.
That is a good thing for people going to shows with their family who do not want to walk through the casino. I think Revel wanted to be designed (this is just my guess I have no inside info) to have a more clean and familyish atmosphere, that is why there was no smoking, views of the beach and plenty of nice open areas, and you could go all sorts of places without having to be through the actual casino sections. When you were there the Casino almost felt like an afterthought/side attraction. At least that was my perception, I only went there 5 or so times near when they first opened, and did not like playing there.
Quote: GandlerThat is a good thing for people going to shows with their family who do not want to walk through the casino. I think Revel wanted to be designed (this is just my guess I have no inside info) to have a more clean and familyish atmosphere, that is why there was no smoking, views of the beach and plenty of nice open areas, and you could go all sorts of places without having to be through the actual casino sections. When you were there the Casino almost felt like an afterthought/side attraction. At least that was my perception, I only went there 5 or so times near when they first opened, and did not like playing there.
I agree that is what they were going for and maybe, just maybe might have made money off that idea with those so inclined to avoid casinos. But to ignore those people who actually gamble was a huge mistake. Instead of going for both groups Kevin and UK said FU to players and said if you want to play here, you will do it under our terms and if you don't like them go back where you came from. And we all know how that turned out.
Quote: AxelWolfIf they built the Revel in Vegas under better management and a few tweaks, I have no doubt it would do well.
Ok, I'll bite. If it was built where? Center strip...maybe. Off strip...no way. But anyone opening a casino in Vegas with the attitude toward gamblers they had would not make it. Would Wynn or Venetian have made it without an Asian pit? No way. Telling gamblers they are an afterthought? No chance. Telling customers buffets are "mass feeders" and they don't need them? Again you know the answer.
If you are saying the building and design would have made it on Vegas with proper marketing I agree. But my argument all along has been it would have made it in AC as well with the same things and without Kevin and UK making the decisions.
Quote: BozOk, I'll bite. If it was built where? Center strip...maybe. Off strip...no way. But anyone opening a casino in Vegas with the attitude toward gamblers they had would not make it. Would Wynn or Venetian have made it without an Asian pit? No way. Telling gamblers they are an afterthought? No chance. Telling customers buffets are "mass feeders" and they don't need them? Again you know the answer.
If you are saying the building and design would have made it on Vegas with proper marketing I agree. But my argument all along has been it would have made it in AC as well with the same things and without Kevin and UK making the decisions.
Been there, done that - same result (to a degree) :
"Blackstone to Buy Cosmopolitan Resort for $1.73 Billion- May 15, 2014"...
"The resort, a two-tower complex on the Las Vegas Strip, cost more than $3.9 billion to build and hasn’t turned a profit since opening in December 2010"...
"The hotel has focused heavily on non-gambling revenue. The property, on 8.5 acres (3.4 hectares), features 2,995 rooms, a spa, salon and 14 restaurants". ...
"The Cosmopolitan’s Marquee Nightclub & Dayclub tied with Wynn Resorts Ltd.’s XS as the top-grossing nightclub in the U.S. with more than $80million in 2012 revenue"
I say: reverse it -put the Cosmo in AC & you'd would have had the Revel.
Revels valuation dropped to a zero to pennies on the $ range in valuation, vs Cosmo's 43 cents, -without the Vegas tide to lift all boats somewhat.
Of course the Cosmo CEO, didn't go quite as far as Revel's, in a kamikaze campaign against its most potentially lucrative customers, but most would argue Cosmo was a superior property to Revel & it also failed.
http://www.bloomberg.com/news/2014-05-15/blackstone-to-buy-cosmopolitan-resort-for-1-73-billion.html
It was to prove to be a very flawed business model from the start.
1. Atlantic City is not a family friendly resort town and hasn't been one in nearly half a century. Those with the financial means who don't gamble can hardly be expected to pick A.C. as a vacation destination at the N.J. shore. There are just far too many cleaner and safer choices out there. And come cooler seasons these young and affluent people would much rather visit a warmer destination such as Florida.
2. Revel was very expensive to stay and to dine at. Weekday room rates close to $200 off season, $13 cheeseburgers and $8 tacos served from a truck.
With a declining market many casinos have adopted a value approach. Inexpensive rooms during the week, buffet for as little as $9 free parking etc.
Shortly after Revel opened Showboat posted a sign facing Revel touting it's inexpensive dining options. Some people do have the means and willingness to spend exorbitant amounts for food and accommodations.
Many do not. Revel seemed to be built with snobbery in mind. No bus terminal and no buffet. I believe K. Desanctis called buffets something like a "mass market feedery" They certainly didn't make the boardwalk entrance very inviting, they didn't even have any restaurants or cafes facing the boardwalk. Perhaps this was done to keep boardwalk traffic to a minimum. After all it was an upscale resort, they saw no reason to attract boardwalk types to their establishment.
The restaurants of Garces and Forgione DID face the Boardwalk (or ocean, if you please).Quote: dave12038457They certainly didn't make the boardwalk entrance very inviting, they didn't even have any restaurants or cafes facing the boardwalk.
Quote: SanchoPanzaThe restaurants of Garces and Forgione DID face the Boardwalk (or ocean, if you please).
But you didn't respond to the point the poster made about making them inviting. While they faced the boardwalk once inside they didn't show that to anyone walking the boardwalk. Almost like find us if you have have the means.
"better management" including the bad things you mentioned.Quote: BozOk, I'll bite. If it was built where? Center strip...maybe. Off strip...no way. But anyone opening a casino in Vegas with the attitude toward gamblers they had would not make it. Would Wynn or Venetian have made it without an Asian pit? No way. Telling gamblers they are an afterthought? No chance. Telling customers buffets are "mass feeders" and they don't need them? Again you know the answer.
If you are saying the building and design would have made it on Vegas with proper marketing I agree. But my argument all along has been it would have made it in AC as well with the same things and without Kevin and UK making the decisions.
Even as Revel has closed the operators of H.Q. want to keep it open. I wouldn't fault those who find fault with Revel. But H.Q. was an exception.
http://www.pressofatlanticcity.com/news/press/casinos_tourism/special_report/owner-of-hq-nightclub-in-revel-wants-to-stay-open/article_b9edc6f6-32eb-11e4-bc25-0019bb2963f4.html
Quote: dave12038457Revel had no shortage of young hotties on weekend nights. I believe I read somewhere that H,Q. nightclub was rated as the best night club between N.Y. and Miami.
Even as Revel has closed the operators of H.Q. want to keep it open. I wouldn't fault those who find fault with Revel. But H.Q. was an exception.
http://www.pressofatlanticcity.com/news/press/casinos_tourism/special_report/owner-of-hq-nightclub-in-revel-wants-to-stay-open/article_b9edc6f6-32eb-11e4-bc25-0019bb2963f4.html
It would appear, revenues from packed niteclubs & an endless supply of "young hotties", as Cosmo & Revel HQ enjoyed , don't move the needle on a multi billion $ property. A relatively small # of high rollers can outproduce revenues from thousands of 20 somethings ( I have 2 of my own & this is what they all do)-who pregame drinks bought elsewhere in the room, & pay a cover to a 3rd party nightclub operator. (& "young hotties" rarely pay a cover).
Quote: AxiomOfChoiceI actually wonder how a small, high-roller-only casino would do.
No table games below $200 min. No slot machines or VP below $5 denom. No high limit room because everything is the high limit room. Impeccable service, high quality booze in all bars. Espresso machines with good coffee. No buffet; no crappy cafe: Good, expensive food only. Just about everyone is getting it comped anyway. Same with the hotel: suites only, very expensive to book, but no nickel-and-diming, and just about all the players would be comped anyway. Waitresses and dealers would be well-compensated, and tipping is strongly discouraged (no use fiddling with small chips anyway). All the employees would have to understand that customer service would be their #1 priority, or they would not be working there for much longer.
Games would all have low house edges (0.3% HE blackjack, 99.5%+ VP). No need for a high house edge when the chips are all black or higher. Take a smaller percentage of larger bets.
Basically, keep the riff-raff out, and have a much smaller team focused on making the customer experience as good as possible. Every individual customer would be very valuable (everyone would have a high theo) so it's possible to spend a lot of money making sure that every customer is happy.
The main downside would be that, with a small volume of large bets, losing months would not be uncommon. The place would have to be very well-bankrolled.
I keep hearing about how much of a casino's wins and losses for a month or a quarter comes from whales. So why not just downsize and focus solely on them?
Essentially, the Ferrari of casinos.
I actually think this is a great idea.
You could also add:
1. RFB & room match-if you are RFB elsewhere- you automatically are RFB/free room here no on 1st trip (w/generous limit), then, based on play thereafter
2. your tier score , 1st visit , begins at your home casino tier score
Here is a 7 minute video tour. Amazing what can be bought with OPM !
https://www.youtube.com/watch?v=liJSrkr7AWc
Quote: BozAnyone who received free rooms at Revel will get them at any other AC property based on 1 trip with the same level of play they gave Revel. The only people left holding the bag were the ones who didn't deserve free rooms to start with. Putting $500 through a slot at Showboat earned free rooms with an expected house win of $75. No business could survive on this, but many expect to be treated like kings on play like this. Just part of the AC problem, tighten comps and you are the bad guy. Keep them up and you are broke.
I agree with your points, however:
Aren't you saying that an orphaned Revel Player, will at a minimum, first, have to pay for room nite(s) on their next AC visit & then hope for future offers?
My point was more referring to this player's reluctance to pay for a Taj room, bankrolling his visit, & then having Taj close before he gets his room offers.
Also "Showboat earned free rooms with an expected house win of $75" is accurate, but my guess from talking to most players is that 90%+ don't have 1% of your knowledge of the system, & it means nothing to them.
Exhibit A would be those who actually played 1000's at Revel, when they refused to comp rooms upfront , & demanded a 2 nite minimum.
Quote: aceofspades
looks like a condo co.( maybe that's why he's saying 2 yrs to fully reopen?)
-good luck to them with that- a sucker truly is born every minute -ask Morgan Stanley
http://www.corporationwiki.com/Florida/Wellington/polo-north-country-club-inc/26635748.aspx
Quote: aceofspades
I wonder how this works with regard to DeSanctis's terms of 10% ownership with regard to bankruptcy procedures
Imagine if he walks away w/ $9 million in exchange for lighting $2 billion of investors $ on fire?
what a country
"Terms of the deal call for Mr. DeSanctis to own a 10% stake in the Revel project."
http://online.wsj.com/news/articles/SB10001424052748703313304576132511718912484?mg=reno64-wsj
Quote: 7star4nowQuote: aceofspades
I wonder how this works with regard to DeSanctis's terms of 10% ownership with regard to bankruptcy procedures
Imagine if he walks away w/ $9 million in exchange for lighting $2 billion of investors $ on fire?
what a country
"Terms of the deal call for Mr. DeSanctis to own a 10% stake in the Revel project."
http://online.wsj.com/news/articles/SB10001424052748703313304576132511718912484?mg=reno64-wsj
Huh?
Creditors get paid before owners get anything. That is the point of bankruptcy -- to recover money for creditors. If they get sold for more than their total outstanding debt, then the owners get whatever's left. That doesn't look too likely in this situation. Most likely the creditors have to accept pennies on the dollar and the owners get nothing.
Quote: AxiomOfChoiceQuote: 7star4nowQuote: aceofspades
Huh?
Creditors get paid before owners get anything. That is the point of bankruptcy -- to recover money for creditors. If they get sold for more than their total outstanding debt, then the owners get whatever's left. That doesn't look too likely in this situation. Most likely the creditors have to accept pennies on the dollar and the owners get nothing.
I know - not sure how this situation worked out
http://www.sec.gov/Archives/edgar/data/1551509/000119312512365504/d364803dex1017.htm
Owning 10% of the company does not mean that you get 10% of the sale price. Creditors are paid first.
Quote: AxiomOfChoiceI'm not sure why you think that is relevant.
Owning 10% of the company does not mean that you get 10% of the sale price. Creditors are paid first.
I'm aware of that.
I was just wondering if the employment agreement was modified in some way when he was terminated.
Quote: JackStraw8004The guy with $90 million dollar bid is not going to get licensed to operate the casino. If he does it will take a year minimum to investigate him. He could bring in another casino operator but if that's the case how come no other operator put a bid in. Obviously they feel the property can't be profitable. Your telling me Steve Wynn wouldn't take shot for $90 million. That is nothing to him. He spends that much on a work of art. I have a feeling this guy is going to turn the property into a condo, timeshare or just lease the rooms for summer rentals.
something smells "fishy" here - I'm not saying Glenn Straub put $10 million into escrow on a shill bid (to be made whole later), but he seems like a "fish" out of water here & has some alleged skeletons in his past- he got off on this one
http://articles.sun-sentinel.com/2012-11-17/news/fl-glenn-straub-polo-battery-case-20121118_1_battery-charge-dui-manslaughter-case-glenn-straub
"Revel said that with Straub's bid in hand - setting a baseline - the company would restart its auction process."
Read more at http://www.philly.com/philly/business/20140911_Stricken_Revel_has_a_buyer_for__90M_in_cash.html#GEoqgk6AXeULS6pU.99
http://www.reuters.com/article/2014/09/10/revel-casino-idUSL1N0RB2SV20140910
THE STALKING HORSE
The initial bidder with whom the debtor negotiates a purchase agreement is called the "stalking horse,"
Break-Up Fees
Break-up fees are a common protection offered to stalking horse bidders, but are controversial in many jurisdictions. Essentially, a break-up fee is incremental compensation to induce the initial bidder to establish a "floor" for other potential bidders in an auction.
https://www.google.com/?gws_rd=ssl#q=stalking+horse+break+up+fee
It could be MGM vs Icahn bidding for Revel:
-WSJ reported today Icahn is 1 of 3 bidders
-MGM mysteriously got back in AC today
http://www.nbc40.net/story/26502638/mgm-resorts-back-in-ac
Both have deep enough pockets to keep Revel on life support for a decade
Quote: JackStraw8004MGM only came back to profit from Borgata. It is a cash cow. They have no intention of buying a casino that can't make money like the Revel. If Icahn buys the Revel then no way does he keep the Taj open.
"Four years ago, MGM put its share of the Borgata into a trust"
http://www.nbc40.net/story/26502638/mgm-resorts-back-in-ac
that means they collected the profits
I say Icahn is dumping Taj in hopes of picking Revel at what he perceives as a bargain.
I may not agree, but he's down hundreds of millions of $ on his AC bets & appears ready to double down on those- who am I to question?- LOL
I've always said -if you made Revel "Borgata by the Sea" ....AC would be in checkmate, there would eventually be only 2 casinos in AC, & Borgata would own both.
"Straub in an interview lamented the notion that, "When everybody thinks of Atlantic City, they think of casinos."
"He not only dislikes the idea of Atlantic City as a casino town but says he would be bothered by the idea of his family profiting from an enterprise built around gambling."
But despite his opposition to gambling, it sounds like, he may not necessarily be opposed to smoking crack:
"his wider vision for the city includes a major undertaking, high-speed rail links with New York City and Philadelphia."
http://www.usatoday.com/story/money/business/2014/09/10/revel-casino-atlantic-city-sold/15413755/
Quote: Dicenor333000 employees will pay 30000 each to make it a place of their own. I've seen it somewhere, employe owned casino.
Somehow I doubt even a small percentage of casino employees have 30k in the bank.
Quote: djatcSomehow I doubt even a small percentage of casino employees have 30k in the bank.
business loan
Quote: GWAEbusiness loan
Finding a bank that would touch anything to do with Revel is highly unlikely. This is why this will be a cash sale.
Quote: BozFinding a bank that would touch anything to do with Revel is highly unlikely. This is why this will be a cash sale.
Not in disagreement, was just meaning there are other ways. Could cash out refi a home loan or LOC, or maybe personal loan if you have decent collateral.
Can this guy possibly be for real?
"Glenn Straub, the Florida developer who made a $90 million offer for the shuttered Revel Casino Hotel in Atlantic City, New Jersey, is considering buying the neighboring and also closed Showboat as well.
Straub, 67, also said he wants to acquire additional land in the city and promote non-gambling activities such as sports. As part of his plans for Revel, he said he’ll drop the name and look for a casino partner to run the gambling operations in the property."
http://www.bloomberg.com/news/2014-09-11/revel-bidder-straub-considering-atlantic-city-s-showboat.html
Quote: Baccaratbabe81Sure seems like Mr Straub has a big plan for AC, and a wild imagination. I hope its not all smoke and mirrors. I've been going to AC monthly for 15 years. Started out as a member of the evil empire. One day was staying at Showboat playing Pai Gow Poker about 5am. One other player at the table I get a royalflush, $11.00 on the bonus would have been $1650. Other player drops a card on the ground PB says dead hand I fight, lose , take a walk to the Taj. I never really played there much. Sit down at PGP lose a couple hands, really bad beats. A guy comes sits next to me introduces himself as Robin T, (I can't remember his full job title but he was in charge of everything on the entire gambling floor) and asks if he can set my hand, I always play 2. I say sure, straight flush. He asks me all kinds of questions, offers me a room, comp for breakfast. From that day on I have been loyal to the Taj. Robin left probably 5 years ago, but Taj has remained my number 1 spot. Revel was number 2. Now I have no clue where to take my action.
Dead hand every time a card hits the floor? Just sit there, bet big, and drop a card on the floor every time you have an average or bad hand.
Call me a skeptic, I wish Mr Straub good health, but on his 167th birthday , he will still not see high speed rail between AC & NY or AC & Philly.
It's what only an hour or so by train from Philly & they're cutting back that service due to low ridership.
If his business plan is based on ideas from outer space like this, AC will be even worse off when he soon leaves.
Many very wealthy men are also a little crazy.
The 2 are not mutually exclusive.
Quote: 7star4now"I hope its not all smoke and mirrors."
Call me a skeptic, I wish Mr Straub good health, but on his 167th birthday , he will still not see high speed rail between AC & NY or AC & Philly.
It's what only an hour or so by train from Philly & they're cutting back that service due to low ridership.
If his business plan is based on ideas from outer space like this, AC will be even worse off when he soon leaves.
Many very wealthy men are also a little crazy.
The 2 are not mutually exclusive.
About 95min between 30th Street and AC. Would be nice if there was direct train service between Atlantic City and NYC.
"We're going to be doing six, seven more things there. If it makes money, that's good. Pat us on the back. If it doesn't make money, then we close her down just like Miami Arena and we blow it up," Straub said.
In 2004, Straub bought the city-owned arena in Miami, opened at a cost of $52.5 million in 1988, for $28 million, but knocked it down four years later after he found it impossible to compete with newer arenas nearby...
A trail of litigation - both as plaintiff and defendant - has followed Straub for a few decades. This year, for example, according to the Palm Beach Post, Straub sued someone over allegations that Straub did not get the VIP tickets he was promised for events at the Palm Beach International Equestrian Center.
Without being specific, Straub said he was working on something much bigger for Atlantic City when Revel came along.
Straub spoke cryptically of a high-speed way to get people to Atlantic City from New York, "if they want to come down. If they don't want to come down, then there's always a back-up. Everything we do always has a back-up, because you never know when things won't work."
OY-VEY!
Read more at http://www.philly.com/philly/business/20140912_Revel_bidder__Distress_is_his_business.html#khSfrLU3gq4CzzxQ.99
