Struggling Atlantic City Revel gets $100m Boost

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Earlier in the year, we reported how Atlantic City was anxiously awaiting the opening of the $2.4 billion Revel Hotel & Casino. Atlantic City Revel was supposed to be this gaming destination's crown jewel and something that would draw numerous visitors. But so far, the Revel has been a dud, and they've experienced serious financial troubles less than four months after opening.

Expanding on these troubles, Revel generated $55 million in revenue, thus leaving the casino with a net $35 million loss. The biggest problem can be attributed to the nearby state of Pennsylvania, which has taken a lot of visitors from Atlantic City. Fortunately, Revel won't have to worry about the immediate future because they got some major help.

A Big Boost

Revel CEO Kevin DeSanctis was able to secure a $100 million loan from the company's creditors. With this money, he foresees the hotel & casino easily surviving both this year and 2013. DeSanctis said, "I would assume that once everybody reads about our closing (the loan), folks would understand we now have liquidity. Almost any analyst will understand we’ll be liquid through 2013 and beyond."

Looking at the Future

Based on the $100 million loan Revel got, it's doubtful that they'll have any immediate problems with money. However, they will definitely need to experience more success when it comes to earnings. Currently, Revel is making around $17-$18 million per month in gaming revenue. However, they need to be making at least $25 million a month to be showing any real profits.

As for if they'll have any chance at earning $25m or more in casino games, this will largely depend upon the health of Atlantic City. Due to Pennsylvania's success, it's hard to see AC turning things around. On the other hand, the city is pumping millions of dollars into advertising revenue, so maybe this can help Revel survive their rough period.