James Allen, the chairman of Hard Rock International, created a buzz at the recent East Coast Gaming Congress when he told gathered attendees that Hard Rock is indeed among the companies interested in buying the bankrupt Revel Casino on Atlantic City’s Boardwalk, “if the price is right.”
The Hard Rock may represent the best chance for a sale of the beleaguered mega-resort, opened in 2012 for $2.4 billion thanks mainly to generous tax breaks from the state after a year-long struggle to complete financing.
The Revel was a disaster from the start. It opened as a “high-end” resort during the recession, when Atlantic City patrons were looking mainly for deals. Complicating matters was a property-wide smoking ban that had the effect of sending customers next door to Showboat or Resorts to gamble. The casino has since eliminated the smoking ban and instituted promotional deals more akin to neighboring properties.
The moves were not enough to stave off bankruptcy. Despite costing $2.4 billion to build, the property is now valued at less than $100 million.
Hard Rock is looking at the potential purchase as a way to pick up a high-quality property at a bargain-basement price, and apply its vaunted brand and marketing to turn the casino’s fortunes around.
Other operators, including Caesars Entertainment, have been mentioned in media reports as expressing interest in buying Revel. Companies are reportedly considering the fact that limited renovation would be required after the purchase, and the fact that ownership would come with almost-certain approval for an online gaming license.
