Revel’s investors will provide $150 million in additional financing to help the resort manage its debt and add amenities it believes will attract more gamblers, officials announced Thursday.
“We believe these new and expanded gaming offerings, combined with newly appointed leadership, specifically in our slot marketing area, will generate significant improvement in our overall gaming volumes, particularly as we enter into the spring and summer seasons,” Kevin DeSanctis, Revel’s chairman and chief executive officer, said in a statement.
The resort said that the financing consists of a new $125 million term loan and a $25 million increase to an existing $100 million revolving loan.
Part of the new loan would be used to help reduce what remains outstanding on the revolving loan, according to the casino’s news release. Last month, Revel filed documents with the Securities and Exchange Commission saying $77 million was outstanding as of Nov. 21. Only two months earlier, the figure was $42 million, according to documents filed with the New Jersey Division of Gaming Enforcement. That would mean the resort drew $35 million on the loan in only two months.
The rest of the new loan — apparently $48 million or less — would be used to add more amenities to the resort, including building a new “high limit slot ultra-lounge” and expanding the players club and eatery options.
“I am quite confident the steps we are taking will result in significant improvements in our market share,” said Darlene Monzo, Revel’s new senior vice president of marketing.
Monzo formerly served as vice president of marketing at the Philadelphia Park Casino and Racetrack and previously worked at Trump Entertainment Resorts, Tropicana Casino and Resort and Marketing Results, a gambling database marketing firm.
Since the $2.4 billion megaresort opened in April, Revel has struggled to make money — posting two consecutive quarters of operating losses of $35 million or more — while also being laden with debt. Prior to this financing deal, Revel’s liabilities totaled $1.4 billion, according to SEC filings.
Its financial situation was so precarious that in documents filed Thursday with the SEC, Revel said that the resort wouldn’t have been able to meet the original terms of its revolving credit loan. With that loan paid off as part of the latest financing deal, Revel will have until May 22, 2015, to repay the $125 million term loan.
The resort appears to be looking toward the spring and summer seasons and making the necessary changes to attract more gamblers, particularly those who play slot machines.
“Your slot business pays most of the bills,” said Joe Weinert, senior vice president at Linwood-based Spectrum Gaming Group.
While one casino — Borgata Hotel Casino & Spa — pulled in $40 million in slot wins in August, Revel recorded only a third of that amount. Revel’s wins also appeared to favor players of the lower-end slot machines, with nearly 60 percent of the money put into machines going to penny and two-penny slots, according to documents filed last month with state gaming enforcement officials.
The casino also is looking to tweak its dining options, pledging to use its new cash infusion to add more quick-serve food options and restaurants that are “accessible to a broader audience.”
“Some of the patrons have noted Revel restaurants have skewed to the higher end,” Weinert said.
The new money also appeared to have come in time for the casino to pay its taxes. Revel was nearly two months behind in paying fourth-quarter property taxes, according to Atlantic City officials.
Michael P. Stinson, director of revenue and finance for the city, said during a City Council meeting that Revel paid its $12.3 million tax bill in full on Dec. 21 plus interest. The bill was due on Nov. 1 and Stinson said had the casino not paid the amount by Dec. 21 the city would have issued a tax lien.
Contact Hoa Nguyen:
Contact Joel Landau:
Follow @landaupressofac on Twitter