Revel: Can’t drive 55?; Another setback in Massachusetts

Revel, the new, $2.4 billion casino on the Boardwalk has been conducting a sort of “stealth opening,” conducting a two-month-plus dry run. Along with the stealth opening come what you might call “stealth revenues”: $13 million-plus in its first full month. In an attempt at damage control, Revel itself released the numbers a day ahead of the New Jersey Casino Control Commission‘s disclosure. Revel CEO Kevin DeSanctis must really have some pull: It’s not every casino owner who can get American Gaming Association President Frank Fahrenkopf (left) to spin-doctor your disappointing early numbers. However, Borgata exec Joe Lupo wasn’t losing any sleep over the new competition. Given that DeSanctis has to integrate 55 tech systems into an IT superhighway, myriad problems were to be expected. The question raised by Revel’s shaky shakedown cruise is whether it’s worth it in the short run to work out the bugs at the literal expense of paying customers for the sake of booking some near-term revenue. Sheldon Adelson did this to some conventioneers at Marina Bay Sands — then sued them for having the temerity to dispute the bill.

What continues to hang fire is the question of whether Revel is a game-changer for Atlantic City, which had another lousy month, -10%. (All things being relative, Illinois would crawl over broken, jagged glass to book $261 million in a bad month.) The anticipated bite into Borgata hasn’t materialized … yet. Despite a drop in slot play, Boyd Gaming‘s property was flat from last year. Table drop (+16%) and win (+12%) did the trick.

Something’s very wrong at Trump Taj Mahal, which went into a 31% dive, posting December-like numbers in April. Shooting past it on the way up was Tropicana Atlantic City, outgrossing the Taj with $27 million, a 39% improvement. Golden Nugget (+1%) seems to have settled into a $11 million/month holding pattern, at least until new amenities start driving new business. However disappointing Revel’s revenues may have been, they still outperformed Golden Nugget, Resorts Atlantic City ($11 million, -21%), Trump Plaza ($9 million, -33%) and Colony Capital‘s former Atlantic City Hilton ($8 million, -41% … and, no, that’s not  a typo).

Except for Borgata neighbor Harrah’s Marina ($34.5 million, -10%), even the Caesars Entertainment cluster had eye-popping declines: Caesars Atlantic City ($27.5 million, -28%), Bally’s Wild Wild West ($27 million, -24%), Showboat ($20 million, -15%). It’s an onerous burden of expectations upon Revel to ask it to turn around a market that’s in that kind of freefall.

Just when it looked like it was going to get slightly easier to get casinos up and running in Massachusetts, the state’s regulatory board took a hit. Carl Stanley McGee, interim executive director of the Massachusetts Gaming Commission, resigned due to longstanding charges of sexual molestation. MGC Chairman Stephen Crosby was counting on McGee’s policy expertise to help steer the fledging body, but that’s out the window. This latest turn of events makes Crosby’s committee even more of slow-moving target for lawmakers who simultaneously fault the MGC for moving too cautiously and yet not carefully enough. Crosby’s due diligence in the McGee cause can certainly be faulted. The 2007 case, involving a 15-year-old boy and a Florida steam room, is sufficiently cloaked in ambiguity that it should have given Crosby pause, but didn’t.

Steve Wynn’s speedy exit from the Bay State has sent casino opponents into a premature victory dance regarding Suffolk Downs. A number of factors, including public perception of the site (not exactly unsullied by gambling, is it?) point in Caesars’ favor. There’s plenty of time of still enter the fray but most of the serious contenders within the industry have either already picked a location or are choosing to sit Massachusetts out. Yes, somebody could swoop in and wrest victory from Gary Loveman‘s grasp but that’s all just loose talk at this point.