New Jersey’s newest casino, the 10-month-old, $2.4 billion Revel Atlantic City, announced on Tuesday that it is preparing to file for bankruptcy.
In a statement, Revel AC Inc. revealed that it currently owes about $1.5 billion in debt but expects that those debts will be reduced by more than $1 billion when the company plans to file for Chapter 11 protection in March.
The company said that it does not plan to lay off any workers and that pay for vendors and employees will remain the same under the restructuring agreement.
Revel’s CEO, Kevin DeSanctis, said that filing bankruptcy will enable the casino to operate more flexibly.
"Today's announcement is a positive step for Revel," DeSanctis said. "The agreement we have reached with our lenders will ensure that the hundreds of thousands of guests who visit Revel every year will continue to enjoy a signature Revel experience in our world-class facility."
According to the Associated Press, the combination destination resort and casino was viewed as “a potential game-changer” when it opened in April of 2012. It was heralded as a personal victory for Republican Governor Chris Christie in his effort to rejuvenate the city’s flagging casino industry back in the spring but has since failed to meet expectations.
Many customers reportedly found the resort’s restaurants and hotel rooms too expensive, while gamblers were reportedly displeased with the franchise’s ban on smoking inside the entire casino. To combat that issue, the company has said it plans to create a separate smoking area, the Wall Street Journal reported.
The governor’s press secretary, Michael Drewniak, said that New Jersey is committed to boosting the casino market and has confidence that Revel will rebound.
"We are committed to the resurgence of Atlantic City, the tourism district and the many efforts currently under way to bring world-class attractions and entertainment to the city," Drewniak said. "A rejuvenated Revel will remain an integral part of that landscape, as it continues full operations ... in addition to employing more than 2,000 people. Most importantly, none of those things that make Revel among Atlantic City's highest-profile attractions will change, as Revel uses this new financial flexibility and the continued backing of its investors to grow the business and be part of Atlantic City's expansion."