PLANS UNFOLD FOR SHUTTERED ATLANTIC CITY CASINOS
The past several years have been the worst in history for Atlantic City’s casino industry, culminating in the closure of four properties in 2014 and casino revenue sliding by 50% over the nine years to 2015. To make matters worse, lawmakers are looking to make up for lost revenue by changing constitution that would allow casinos in other areas of the state.
Attempting to put a string of bad results behind them, the eight surviving casinos generated $2.56bn in 2015, which was up 3.1% compared to the revenue produced by those casinos a year earlier. In addition, regulated online gambling sites in the state have started to show positive signs and annual revenue expanded 21.2% last year to nearly $149m.
Developers have been moving in on the four shuttered casino properties – Atlantic Club Casino, Trump Plaza, Showboat and Revel – and plans have started to surface regarding their future. The properties have each sold to aspiring developers at rock bottom prices and their reopening could alter the landscape of Atlantic City as a gaming and destination resort.
Revel plans to reopen with a casino
Plans to reopen the shuttered Revel Casino Resort with a casino have been confirmed by new owner of the property, Glen Straub. The Florida-based developer who purchased Revel for $82m in bankruptcy court last year, said that he eventually decided to offer casino gaming as part of the reopened resort, ending a long period of uncertainty about its future.
During his announcement, Straub indicated the reopened venue will be considerably smaller compared to how it was previous to closing in September 2014, noting the casino would be about 50pc of its former size. Despite not giving a timetable for the opening of the casino, Straub said it would come after other plans were already underway for the resort.
Ahead of the casino, development will move forward to build a waterpark at the resort, which could start construction in late May 2016, while hotel rooms could reopen as soon as a month later. Revel’s application for a state casino license, however, is incomplete and it appears unlikely a casino could open this summer, given the lengthy investigations involved.
Straub noted the new casino won’t be named Revel, would be run by a third-party operator and include Asian gambling attractions. If he succeeds in reopening the resort with a casino, it would become the ninth in Atlantic City. Next-door sits the closed Showboat that has recently sold and taken together, the two new resorts could represent growth in the region.
Philadelphia developer buys Showboat casino
Showboat casino, the former Mardi Grad-themed resort that shutdown in Atlantic City in August 2014, has sold to Philadelphia developer Bart Blatstein for $23m. The new owner is yet to confirm whether the property will reopen a casino, but noted that non-gaming options at the facility would likely include office space and entertainment amenities.
Blatstein is known for several development projects in Philadelphia, as well as the acquisition of The Pier Shops at Caesars in Atlantic City, which were transformed into The Playground complex. Tower Investments, owned by Blatstein, paid Caesars $2.7m for The Pier Shops in 2006 and the new retail entertainment centre was recently valued at $200m.
“It’s great to be part of the new Atlantic City,” enthused the developer, who describes his investments in Atlantic City as being part of the embattled resort town’s revival. “Right now I’m just thrilled to have a great, storied property,” continued Blatstein. “It’s time to go out and get a nice dinner and a nice glass of wine and toast the future.”
The property was purchased from Stockton University, which acquired it from Caesars Entertainment for $18m in December 2014. The college intended to convert Showboat into a residential Island Campus and privately run hotel, but those plans were thwarted by a 1988 contract in place with Trump Taj Mahal that required the property include a casino.
In addition to the potential expansion of casino gaming into northern New Jersey, which will be determined by a referendum in November, the Atlantic City casino industry faces increased competition in the northeast US region. At least eight new casinos are expected to open by the end of 2018 in Maryland, Massachusetts, New York and Pennsylvania.