Revel reveals itself in grand opening
Debts and gambling
ATLANTIC City’s extravagant $2.4 billion megacasino opened today and its first customer didn’t waste any time in winning big. Jerry Colonna of Mount Laurel, N.J., headed for a roulette table after Revel opened at 7 a.m., Monday. He bought $400 worth of chips and won $1,500 within 10 minute. Locals are now counting on non-smoking, unique resort to revive the dismal fortunes of the nation’s second largest gambling market.
However, the megacasino faces a huge $1.1 billion debt load that Wall Street experts and New Jersey gaming regulators believe could become a heavy financial strain and could possibly be the downfall of the resort.
It’s been reported that Standard & Poor’s, the New York-based credit ratings giant, warns that Revel will be “vulnerable” if its business plans fall short. S&P has assigned a “negative outlook” to the casino operator’s debt. “Our negative rating outlook on Revel reflects our belief that Revel will be challenged to generate the substantial level of cash flow necessary to accommodate debt service obligations under its capital structure,” S&P wrote in an analysis of Revel’s financing.
Linda M. Kassekert, chair of the New Jersey Casino Control Commission, cautioned that Revel’s financial projections — the money that will pay the company’s debt and operating costs — appear “extremely ambitious.”
The commission approved a license for Revel last week, finding that the company met the financial stability standards required of all Atlantic City casinos. During the licensing hearing, Kassekert pointedly asked Revel’s chief investment officer, Michael Garrity, whether the company had a backup plan in case “things go really bad” and Revel falls behind its financial forecasts.
“We feel very comfortable with the numbers we have,” Garrity replied.
