On Monday, Atlantic City’s newest casino, the Revel filed for Chapter 11 bankruptcy protection.
Built at a cost of $2.4 billion, the Revel offered a 130,000 square-foot casino with 2,400 slot machines and 130 gaming tables and 1,399 hotel rooms. In its bankruptcy filing, the Revel says it has $1.5 billion in debt, but is worth only $450 million, the Associated Press notes.
The casino has reached a payment agreement with most of its creditors that will convert 82% of its debt into equity. It will also receive $250 million in debtor-in-possession financing and $335 million in exit financing from some lenders.
Despite a glitzy opening in April of last year, the Revel never attracted the gaming revenue its backers expected. It has consistently underperformed other Atlantic City casinos, which were themselves buffeted by the lackluster economy and competition from Pennsylvania gaming establishments.
It may also have been harmed by a no-smoking policy, higher room and food prices, and a decision to cater to convention-goers rather than traditional casino gamers.
Earlier this month, New Jersey became the third U.S. state to allow online gambling, following similar moves by Nevada and Deleware.