Revel CEO DeSanctis is stepping down

The Revel at sunrise. The casino is expected to file for bankruptcy this month.
The Revel at sunrise. The casino is expected to file for bankruptcy this month. (DAVID M WARREN / Staff Photographer)
Posted: March 15, 2013

Kevin DeSanctis, Revel's chief executive since the struggling casino opened in April and the man largely credited with shepherding its five-year construction through the recession and frozen credit markets, is stepping down.

On Wednesday, the casino's owner, Revel AC Inc., announced that Jeffrey Hartmann, a 20-year gaming- and hospitality-industry veteran, had been named interim CEO.

Hartmann, a former CEO of Mohegan Sun Casino Resort in Connecticut, has worked as a consultant for Revel since early this year. His new role heading day-to-day operations will be effective as soon as he receives regulatory approval.

DeSanctis' departure has been a topic of speculation since the casino announced Feb. 19 that it would file a prepackaged Chapter 11 bankruptcy this month. Total monthly gambling revenues have continued to fall far below Wall Street expectations - totaling just $9 million in February and $8 million in January.

Michael Garrity, Revel's chief investment officer, also is resigning. The company said DeSanctis and Garrity would retain posts as CEO and CIO of Revel Group, the holding company that developed the casino and is owner and licensor of the Revel brand. Revel Group will have no affiliation with Revel AC at the conclusion of the bankruptcy, expected to take about two months.

With so little gambling revenue coming in, Revel - built at a cost of $2.4 billion - missed a January interest payment on its bonds. Its precarious financial situation has had the eye of New Jersey regulators for some time.

As CEO, DeSanctis was behind, and repeatedly defended, Revel's focus on nongambling revenue (food and beverages, conventions, and rooms) as a new Atlantic City business model.

Revel's net revenue for third quarter 2012, according to the state Division of Gaming Enforcement, was $61.9 million, of which $24.1 million was derived from nongaming sources.

Atlantic City's gambling revenues have plummeted in the last six years because of competition from Pennsylvania and other states, and the resort was banking on Revel to turn its fortunes around. The lavish casino had the support of Gov. Christie, who steered $261 million in state tax credits toward getting it built.

Bob McDevitt, president of Unite Here Local 54, which represents 15,000 casino and hotel workers in Atlantic City and has criticized management at the nonunion Revel, said, "We have had a keen interest in this project from the beginning. We hope that the changes under way at the property will be constructive for everyone who works there and for Atlantic City as a whole. We look forward to a better relationship with Revel in the future."

In an investors note, gaming analyst Andrew Zarnett of Deutsche Bank A.G. said, "With a new, reorganized capital structure in place, in order to be successful, we believe Revel will likely have to target the Borgata customer."


Contact Suzette Parmley at 215-854-2855 or sparmley@phillynews.com.

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