Revel Sold

Revel reportedly sold, has a new name, and could open as soon as this Summer along with the refreshed Hard Rock at the north end of the boardwalk.

http://www.nj.com/business/index.ssf/2018/01/failed_revel_is_sold_could_re-open_in_months.html

Glen Straub purchased the Revel for $82 million and sold it for $200 million.

How much do you think he sunk into the property during the 2 years he owned it?

Quote: gamerfreak

Glen Straub purchased the Revel for $82 million and sold it for $200 million.

How much do you think he sunk into the property during the 2 years he owned it?

Didn’t he end up buying the power plant during his tenure?

A bigger question is how AC can handle 2 more properties? Not enough new business so it’s coming from someone. I see Bally’s, Resorts and GN taking the biggest hits.

It is an amazing property. They got it for a fraction of its initial cost. They just need the right management in there to make it work... in addition to remodeling the place so the gaming area is more open and well lit. Their spa is the bomb! Waitresses uniforms.. weak. They also need casual dining, food court, and buffet...not just all gourmet restaurants. People like to get a quick bite and go on. And the obvious... they need to cater to the players more. They didnt give out s%* to prior customers. Revel was the worst display of management for a casino property in the history of gaming in my opinion. 2 billion dollar F%$ Up .. oh just write it off and let the shareholders and taxpayers pay for it. nice!

Quote: Boz

Didn’t he end up buying the power plant during his tenure?

A bigger question is how AC can handle 2 more properties? Not enough new business so it’s coming from someone. I see Bally’s, Resorts and GN taking the biggest hits.

I'm probably going to write an article about this, so I won't go into too much detail here. I'm mainly looking to see how AC finished the year from a standpoint of overall revenue before I rush to any judgments.

This might be a bit preemptive, but here are my opinions as to what you said:

1.) I agree 100% on Bally's. Bally's has pretty much been the under performer even as the overall revenue situation in A.C. has improved. Beyond that, its existence is redundant to Caesars. In fact, as November, Bally's is the only casino DOWN year-over-year compared to 2016...though not by much.

Either way, it shows that they did not manage to capitalize on Taj closing.

2.) I don't know if I agree with Resorts, or not. The only reason I'm not so sure is because they may benefit from increased foot traffic on that end of the Boardwalk.

The only reason I'm somewhat inclined to agree with you is that Oceans and Hard Rock will be almost as new status and Resorts will have to heavy target low rollers pretty exclusively. Up 11.1% YTD as of November, Resorts has enjoyed the second largest gain only to Tropicana (+15.9%) who obviously has the database of the Taj Mahal to work with. Obviously, Tropicana is well under Taj Mahal + Tropicana last year as they lost some Taj business to other casinos.

Specifically, Tropicana (as November) is up 44,098,879 in live casino win for the year whereas Taj accounted for $125,094,031 for the entire year and closed early October...I think it was.

Thus, they're up for this year about 35.14% of the total revenue for the Taj Mahal last year, which will either slightly increase or decrease depending on how December goes.

3.) I'm pretty sure I disagree with you on Golden Nugget. GN has historically been pretty aggressive on tier matching and offer matching, and they cater pretty well to low-mid type rollers. I don't think Resorts will take much from them and I'm not really convinced the former Revel or Hard Rock are really going to be targeting the Golden Nugget's customers, at least, not with any exclusivity.

I could see Golden Nugget dropping back to where they were in 2016 or 2015, but I'd be really surprised if they get knocked down to where they were in 2014.

Overall

I agree that someone has to be in trouble overall, though, because I believe AC is going to be back at a point where not all of the casinos can be sustained, especially in light of some new regional competitors that didn't exist when the floor fell through.

Besides that, as of November, at a hair under 13M this is the first year that AC has enjoyed overall gains (year-over-year) in live casino win in a decade, but it still only represents gains of 0.5% since last year, barring anything huge coming in for December.

Perhaps most importantly, 2017 is the ONLY year that beats any year in live casino win in the last decade, and it only beats 2016. Which means that every year other than 2016 dating back to...I don't even know when...had better overall live win than will 2017.

With all of that, and I could be wrong, but barring in bringing market share that did not go to AC at all this year, I don't know how they are going to go about sustaining two more casinos, particularly not of the scope of these two properties. Some people have discussed not being buried under Revel's massive debt anymore, and that's true, but that position also fails to take into account that they didn't even meet operating expenses most months. In fact, I think there was only one month in which they did, and that took a $100,000 loss rebate to draw that kind of revenue.

I think the bigger picture here is something no one is talking about... sports betting in AC! It is inevitable. I feel that they are opening these casinos with the expectation of sports betting becoming legal in NJ. Otherwise, it would be foolish to continue to saturate the city with more casinos when people in any state can go to their local spot to eat, drink, gamble and see shows. AC is not the destination it once was. Sure, summertime they can draw from the beach crowd.. but that's it.

I also feel as though there’s is a lack of non-gambling entertainment in AC. Locals, regulars, and gambling addicts are all great but there needs to be more reasons for touristy people who may or may not casually gamble to come to AC.

The beach is an obvious attraction, but ultimately there’s needs to be more. The boardwalk is just sad, half the buildings are boarded up and it has none of the old school charm that it got so well known for before casino gambling.

They need to host some residencies with B-list acts or some sort of other high exposure event, AC used to be the boxing capital and now there’s nothing.

Quote: WatchMeWin

I think the bigger picture here is something no one is talking about... sports betting in AC! It is inevitable. I feel that they are opening these casinos with the expectation of sports betting becoming legal in NJ. Otherwise, it would be foolish to continue to saturate the city with more casinos when people in any state can go to their local spot to eat, drink, gamble and see shows. AC is not the destination it once was. Sure, summertime they can draw from the beach crowd.. but that's it.

That's an interesting take, and it would certainly be interesting to see some results from a locale aside from Nevada. Of course, none outside of Nevada (but still in this country) exist.

However, UNLV has tracked the sports betting win from 1984-2016 and has published the results:

http://gaming.unlv.edu/reports/NV_sportsbetting.pdf

The most interesting column, in my opinion, is the percentage of the casinos' total win that actually comes by way of the sports books. I find it interesting because, in terms of total casino win, the range since 2000 has been 1.07% (2004) to 2.09% (2015). 2015 beat the previous high in that regard, which is the 2.06% had in 2014. I'm not sure why, but there was a big jump from 2011-2012 and then again from 2012-2013 which now seems to be basically sustained.

Either way, if we take the total live gaming win of 2,406,012,100 for 2016 in AC (the most recent year for which we have full data) and we call it 2%, then we would expect:

2406012100 * .02 = 48,120,242

Which is to say a revenue increase of about 48 million dollars.

While substantial, that revenue, which would in some way be divided amongst the entire city, only represents roughly 27.8% of Resorts revenue for 2016 in terms of live casino win, and Resorts was the worst-performing casino in raw revenue numbers in 2016.

You mention the AC Summer crowd, and I also think that is another reason why sports betting will not increase revenues such in terms of live casino to justify or support two more properties on its own. The big problem being that, by far, football and basketball (mostly Winter sports) are the two biggest sports from a betting standpoint. In fact, there were a few years that football narrowly topped basketball and baseball, combined.

It's definitely a consideration, especially if they end up being able to accept such bets online from NJ residents. I think that the online opportunity is also a consideration as it requires having a physical presence in the state. With that, you had five websites that divided up almost 200M in 2016 and 224.8M YTD as of November 2017 with one more month on the clock that will be reported in a few days.

In the end, I think at least one casino will have to close to accommodate the other two. At least one. Either that, or one of those two may ultimately fail. Even with the additional revenue streams, I really don't see how something the size and scope of Revel and Hard Rock operate profitably without at least one other property closing. Even with the sports and online betting, I just don't think AC's revenue ceiling is high enough.

I mean, you can have online and AC YTD for November of 2017 is still a rounding error from 200M less than what the city did in just Live Casino Win back in 2013.

Now, you also had Trump Plaza, Showboat and Atlantic Club, (Ocean replaces Revel and Hard Rock replaces Taj Mahal) but I just don't know that you make up the revenue from these two other potential outlets to enable everyone to survive. The previous three generated 264.3M, combined, in total revenue to that point and all closed.

Looking at just Live Casino Win, the current AC operators are 427.8M down compared to 2013, November YTD for 2017. The operators who are now closed did a total of 580.8M in Live Casino Win in that point in 2013, so that includes Trump Plaza, Showboat, Atlantic Club, Revel and Taj Mahal.

What you're left with in potential Live Casino Win is about 153M to be split among two very large properties, as well as online and the potential for sports betting. That's not even close to what Resorts, the casino with the poorest gaming win in dollars and cents, has earned this year in live casino win.

Yeah...the more I look into this, the more I think someone will have to go. Bally's certainly. Beyond that is anyone's guess. Maybe Resorts. Maybe one of the two new places themselves.

Revel still has the strange layout that involves a LOT of walking. That isn't going to draw the older crowd, which is a big part of the gamblers I always see at GN and Resorts. On the other hand, Revel is the cleanest and most modern property in AC, by far... If they get the club and the pools open again, they just might draw some of the younger crowd away from places like Borgata, Harrah's, and maybe Trop.

If Hard Rock has good live shows often and if they do a good job modernizing the casino and renovating the worn out Taj rooms they have a chance to draw a somewhat younger crowd too.

It will be interesting to see how everyone reacts and competes with each other....

Quote: gamerfreak

I also feel as though there’s is a lack of non-gambling entertainment in AC. Locals, regulars, and gambling addicts are all great but there needs to be more reasons for touristy people who may or may not casually gamble to come to AC.

The beach is an obvious attraction, but ultimately there’s needs to be more. The boardwalk is just sad, half the buildings are boarded up and it has none of the old school charm that it got so well known for before casino gambling.

They need to host some residencies with B-list acts or some sort of other high exposure event, AC used to be the boxing capital and now there’s nothing.

I think a residency would be tough because the same people are only going to come see the same act a limited number of times, and I'm guessing that number is either one or two.

I don't know what you're going to do other than a full upgrade as far as the rest is concerned. Regionally speaking, Atlantic City is surrounded by (mostly) newer casinos, with some still being added. In terms of the beach scene, there are nicer beaches in nicer and more tourist-friendly areas. There are obviously nicer Boardwalks along the Atlantic and other ocean-facing casinos in better areas for the gambling inclined. Now, a person might not always get to stay on property directly, but hell, I bet there are some wives who are happier not to be.

I don't know and I could be wrong, but I think they are doing the best thing they could be doing by way of gunning pretty exclusively for those inclined to gamble. When you say, "May or may not gamble," if the answer is, 'Not,' then I really don't see why that person would ever bother going to AC.

In fact, I write about gambling...and if we're able to take a vacation with the kids this year, we're planning on hitting the Atlantic, but not Atlantic City.