ATLANTIC CITY, N.J. – The most spectacular and costly failure in Atlantic City's 36-year history of casino gambling began to play out Monday when the $2.4 billion Revel Casino Hotel emptied its hotel.
Its casino will close early Tuesday morning.
Revel is shutting down a little over two years after opening with high hopes of revitalizing Atlantic City's struggling gambling market. But mired in its second bankruptcy in two years, Revel has been unable to find anyone willing to buy the property and keep it open as a casino. It has never turned a profit.
"It's kind of sad," said Andrew Tannenbaum of Edison, who has stayed at Revel a dozen times in the past year. "Compared to other casinos, this was a lot nicer. There wasn't the riff-raff here. But I think they overspent, went overboard and got in over their heads. When the Borgata opened, that should have been the last of the high-end casinos for Atlantic City."
Revel will be the second of three Atlantic City casinos to close in a two-week span. The Showboat Casino Hotel closed its doors Sunday, and Trump Plaza is closing Sept. 16.
So what killed Revel?
Analysts and competitors say it was hampered by bad business decisions and a fundamental misunderstanding of the Atlantic City casino customer.
"The timing of it could not have been worse," said Mark Juliano, president of Sands Bethlehem in Pennsylvania and the former CEO of Trump Entertainment Resorts in Atlantic City. "The financial climate while Revel was developing and when it opened were completely different."
Revel officials declined to comment.
The casino broke ground just before the Great Recession. It ran out of money halfway through construction and had to drop its plans for a second hotel tower while scrambling for the remaining $1 billion or so it needed to finish the project. When it opened in April 2012, it was so laden with debt that it couldn't bring in enough revenue to cover it.
The idea behind Revel was to open a totally different resort, a seaside pleasure palace that just happened to have a casino as one of its features. That included Atlantic City's only total smoking ban, which alienated many gamblers; the lack of a buffet and daily bus trips to and from the casino; and the absence of a players' club. By the time those decisions were reversed, it was already too late. High room and restaurant prices hurt, too.
"If there had been a range of new attractions and potential customers with enough discretionary income, I think that Atlantic City could have absorbed the new capacity," said David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas. "That's certainly what happened with Borgata more than 10 years ago. But the market that Revel foresaw for its property just didn't materialize, partially because of the growing perception that the city wasn't ready for that kind of customer. At the same time, Revel didn't have a plan to successfully market to the traditional Atlantic City customer."
It also started at a huge disadvantage by not having a pre-existing database of gamblers to solicit, in the way that casinos owned by nationwide companies like Caesars Entertainment or Tropicana Entertainment can.
Customers found Revel's design off-putting as well, said Joe Lupo, senior vice president of the Borgata, whose upscale market Revel appeared to target. Entering from the Boardwalk, they had to take a vertiginous escalator up four flights to reach the casino floor. Once there, the property wound around a circular pattern instead of the linear layout of most other casinos.
"Revel struggled with the execution of plans to develop their market, as well as with their design and just a basic understanding of the Atlantic City visitor," he said.
Revel still hopes to find a buyer for the property after it has ceased to operate as a casino.