Revel Casino Re-Opening Delayed Once More

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Tuesday, July 19th, 2016 | Written by Stephen Smith

News that owner Glenn Straub plans to reopen the Revel Casino in the near future has led to an understandably skeptical response from industry analysts, who fear the addition of yet another casino in Atlantic City will do more harm than good. In the meantime, Revel’s re-opening has been held up by a number of in-house difficulties, as well as others related to obtaining a gambling license required to operate in the Garden State.

Revel Casino’s History

In 2014, Revel Casino shuttered its doors along with three other casinos in Atlantic City, in the process reducing the total number of casinos in the area from 12 to 8. As the largest building on Atlantic City’s skyline, Revel Casino’s closure took much-needed jobs away from the city, and also left a rather obvious empty space in the resort area. Many people agree that something needs to be done with the building to keep the area vibrant, but there are debates about whether or not that “something” should be a casino.

The Argument Against Revel

After the closure of Revel Casino and its three competitors, the casino market in Atlantic City was reduced by 33 percent. In this new environment, the eight remaining casinos were better able to share the market, and steps were taken to help bolster the industry and prevent further closures. As a result, seven out of the eight casinos still in operation in Atlantic City proved profitable in 2015, and it’s believed that the eighth casino will be profitable this year.

It seems by all accounts that the Atlantic City Casino industry is on the mend, but most experts believe that the market is the right size presently and that demand for gambling has not increased enough to warrant the opening of a ninth casino. With two casino licenses set to be issued for casinos in the northern part of the state, it seems unlikely that demand will increase in the near future either. Industry experts believe that if Revel reopens it will only place a strain on the market and end up doing more harm than good. As Steve Callender, Tropicana’s general manager, explains:

“There seems to be enough gaming. If you look at the gaming numbers, everyone seems to be doing well now. We are rightsized from a casino standpoint.”

Problems with Licensing

Despite warnings from experts like analysts at Deutsche Bank Securities, Glenn Straub is still hoping to reopen Revel Casino. He has stated that his casino creates jobs and is good for the local community as a result, and Straub thus does not seem to be deterred by warnings that there is not enough demand for a new place to gamble in order to ensure that his casino will be filled.

There is still one major roadblock to getting his casino up and running. Straub is currently caught up in a dispute with the New Jersey Division of Gaming Enforcement. His company, Polo North, wants to own the building but lease it to a tenant that would take the steps to obtain a casino license. The state has blocked this move, stating that Polo North would need to obtain the licenses and authorizations, and not place the burden on a tenant.

Straub counters that he is being treated unfairly and should be subject to the same requirements as Morris Bailey who owns the Resorts Casino, and Carl Icahn who owns the Trump Taj Mahal and the Tropicana. Following the ongoing saga of Revel’s gambling application, Polo North took the opportunity to release a company statement which read:

“Instead of welcoming this prospect, New Jersey’s Division of Gaming Enforcement has imposed a roadblock that is inappropriate and unnecessary. Despite Polo North only being a landlord, the division is requiring it to comply with the more extensive licensing standards imposed on casino operators as opposed to the less stringent standards imposed on vendors. This requirement is being imposed even though the proposed tenant will meet the licensing standards for casino portion of 6,000,000-square-foot property.”

Other Problem Areas

In addition to problems presented by the Department of Gaming Enforcement (DGE), Straub also has a number of in-house issues to contend with, including a missing temporary certificate of occupancy inspection confirming adequate sprinkler and alarm systems. Other issues also still persist related to having several different firms involved in the reopening process, and as Straub explained recently:

“It could take two weeks before all 17,000 fire detection locations are checked. We are also working with three companies to address concerns that they have over the generators in the building. We are working with two companies and one agency, and one thing holds up another.”