Revel secures new credit; total now $100 million
ATLANTIC CITY, N.J. (AP) — Atlantic City's newest casino has locked down additional credit that gives it much-needed breathing room after a slow start.
Revel inked a deal Wednesday night giving it access to $70 million in additional credit, Revel Entertainment CEO Kevin DeSanctis said Thursday in a telephone interview with The Associated Press.
The resort now has commitments for $100 million — more than enough to get it through 2013 comfortably, he said.
"I would assume that once everybody reads about our closing (on the credit deal), folks would understand we now have liquidity," DeSanctis said. "Almost any analyst will understand we'll be liquid through 2013 and beyond."
The credit deal came just hours before the president of the city's main casino union called on state gambling regulators to investigate whether Revel is financially stable — a key requirement for operating a casino in New Jersey. A declaration that a casino is not financially stable could lead to the loss of its license.
Bob McDevitt, president of Local 54 of the Unite-HERE casino union, sent a letter Thursday morning to the state Division of Gaming Enforcement voicing concern about Revel's ability to pay its bills. He cited $27 million in outstanding liens and lawsuits from contractors and vendors.
"This is a potential catastrophe," he said in a telephone interview. "I deeply believe that. I'm not cheerleading for this to happen. It doesn't help me as a union head if they collapse and go under. These are potential workers we could organize."
The union has battled with the mostly non-union Revel since before it opened in April. McDevitt said Revel hasn't added new business to the city, but has siphoned it from other struggling casinos. He fears Revel could fail, and drag other casinos down with it.
"It's so easy to go out and say things without having to worry about facts," DeSanctis responded. "That's just a wonderful thing."
The union said Thursday afternoon it still has grave concerns about Revel's financial stability, despite the added credit reserves.
Lisa Spengler, a spokeswoman for the Gaming Enforcement Division, said Director David Rebuck would not comment on the union letter. She said the agency has been "actively monitoring all financial matters, including obligations to contractors, since the preview opening of Revel."
The $2.4 billion resort is off to a slow start. Widely seen as a potential savior for Atlantic City's declining market, Revel has been mired in eighth place among the city's 12 casinos in winnings from gamblers since the resort opened last spring. Revel posted a $35 million gross operating loss, and its gambling revenues have not been near what analysts or Revel executives had expected.
Revel brought in $17.5 million from table games and slot machines in July, up from $14.9 million in June. In May, it took in $13.9 million, up slightly from $13.4 million in April, its first month of operation.
DeSanctis said critics are focusing too heavily on those traditional, easily identifiable yardsticks in judging Revel, which he said relies less on gambling winnings than traditional casinos.
"People are having a really hard time understanding our business model," he said. "Because our business model is the way it is, our cost on a daily basis is significantly lower than most folks believe."
But he acknowledged that Revel needs to boost its casino winnings by several million dollars a month. "Ultimately, our next hurdle is to get to the mid-20s," he said.
DeSanctis also said the post-construction claims are normal for a project of Revel's size.
"We will pay every dime of everything we owe," he said, adding that the company will not pay what it does not owe.
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Wayne Parry can be reached at http://twitter.com/WayneParryAC
