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.
