The Big Gamble: Revel Casino

ATLANTIC CITY - This town isn't Las Vegas, but the $2.4 billion Revel Casino wants to take visitors there with A-list entertainment, posh rooms, and celebrity-chef restaurants in a luxurious setting where the champagne and water in 10 swimming pools are always flowing.

The 20-acre resort - draped in silvery-blue reflective glass - literally curls to and fro like the ocean it embraces. Many see Revel as the lifeline for this down-on-its-luck gambling mecca in need of a revival.

As the 12th casino - the first built from the ground up since the game-changing Borgata opened in 2003 - Revel plans to move Atlantic City from primarily a day trip to overnight market that caters to leisure and group guests, conventioneers, and, of course, gamblers.

"It will be good for Atlantic City," said local resident Lucas Pineda, 40, a restaurant cook, as he walked past Revel last week on his way to work.

A heavy morning fog lifted to reveal the facade - covered in enough glass to fill 18 football fields. At 47 stories, it's now the city's tallest building and New Jersey's second tallest.

"It's a big casino," Pineda said, looking up. "It will bring them back."

Revel has an ambitious and unconventional business plan. It becomes the first fully smoke-free and first nonunion palace here since gambling was legalized in 1976, according to the state Division of Gaming Enforcement. It will be the first Atlantic City casino to impose employee "term limits," in which workers, ranging from bellhops to dealers, will have to reapply for jobs every four to six years.

Few are watching more closely than Gov. Christie, who last year created a state-run tourism district to jump-start the city's turnaround, eased casino regulations to entice developers, and earmarked $261 million in state tax credits toward Revel's completion. To Christie, much of Atlantic City's future - and to a large extent, its survival - will depend on how Revel performs.

But the casino, which launches an eight-week "soft opening" starting April 2 to phase in most of its 1,898 rooms, half of its 14 restaurants, a spa, and the first of the pools, as well as test the 2,500 slot machines and 150 table games, could be Atlantic City's biggest gamble yet.

Gaming analysts say Revel's lavish price tag and bevy of offerings on 20 acres of prime beachfront aren't a guarantee for success - not with competitors in Pennsylvania, Delaware, Maryland, and New York, and more casinos on the way.

Revenue from Atlantic City's still dominant gaming industry has declined 42 of the last 43 months, and its workforce has shrunk by about 10,000 from its peak six years ago.

"I would not say that Revel is doomed to fail, but it clearly has some challenges," said John Kempf, of RBC Capital Markets. "There is something to be said for addressing the nongaming amenities, although this may take some time to develop."

Revel's nonunion status, reliance on part-time workers (25 percent of its 5,500-member staff will be part-time with no health benefits), and term limits have put the casino directly at odds with the 13,500-member Unite Here Local 54, which represents most of the city's casino and hospitality workers.

"This is a complete commoditization of the workforce and is directly against what the original [New Jersey] Casino Control Act stood for - which was decent jobs, benefits, a future," union president Robert McDevitt said. "Revel has completely turned that upside down."

"If this is successful, the industry will have no choice but to follow," he said. "The reality will be [the other casinos] can't have a 50-year-old cocktail waitress."

At 6.3 million square feet, Revel is among the largest U.S. casinos by square footage. The largest in North America - Foxwoods in Connecticut - measures 6.7 million square feet.

Revel cost more than double its closest Atlantic City rival - the Borgata, built for $1.1 billion. But when Revel opens for the preview, missing will be a casino standard - the buffet, which even the upscale Borgata offered. Instead, Revel borrows heavily from the Las Vegas playbook, housing such amenities as theaters, nightclubs, cabanas, retail shops, and restaurants with celebrity chefs Jose Garces, Michel Richard, and Marc Forgione.

"Each aspect of the resort is designed for a particular guest experience," said Revel chief executive officer Kevin DeSanctis. "If you are a foodie, or groupie [music lover], or someone who enjoys nightlife, Revel will offer an experience so that every guest connects with something . . . every time they're here."

The 130,000-square-foot gaming floor represents just 5 percent of the complex - comparable to the Venetian and Cosmopolitan in Las Vegas, but smaller by more than 30,000 square feet than a few other Atlantic City casinos - and smaller even than Revel's available meeting space.

Entertainment will play a huge role, with inaugural acts including top draws Maroon 5 and Beyoncé in the 5,050-seat Ovation Hall.

Unlike other Boardwalk casinos, which put the ocean to their backs (which critics say was to discourage patrons from leaving), Revel embraced the water and light. Even gamblers can see the ocean and horizon from the gaming floor.

"The ocean figured prominently into Revel's design from the start," said Michael Prifti, a principal at BLT Architects, Revel's main architect. Every room and suite has an ocean or bay view.

"What we're looking to do . . . is basically create a business model that, one, is not something that you can copy," DeSanctis said at the East Coast Gaming Congress here last May. "Other jurisdictions cannot copy it because they don't have the capital investment to do it. And, two, it's much more sustainable."

But will it be enough?

Pennsylvania's 10 casinos - soon to be 11 with the opening Saturday of the Valley Forge Casino Resort - have cut into what had been a steady clientele for Atlantic City for three decades.

Jackie Hemphill, of Lambertville, N.J., hasn't been back to Atlantic City in two years. It takes her 35 minutes to get to Parx in Bensalem vs. two hours to the Shore.

"Revel will have to do something truly amazing to get me down there," said the 63-year-old retiree, as she worked a penny slot machine at the Bucks County casino last week.

Analyst Kempf said Revel's biggest obstacles were "new competition within and outside of Atlantic City, having a small room base, and executing on its nongaming strategy."

Revel's 1,898 rooms will rank fifth among the city's 12 casinos, behind the Borgata, Harrah's Resort, Tropicana, and Trump Taj Mahal. It edges out Bally's with 1,727 rooms.

"The room size is one of the biggest issues in my mind," Kempf said. "It will need heavy-volume day traffic, as well as high customer spend-per-visit to offset this disadvantage. I'm not saying they won't, but it will be challenging."

Longtime Margate resident and Philadelphia native Phil Greenspun shared similar concerns.

"We might be oversaturated" as far as casinos, said the 72-year-old retiree as he strolled the Boardwalk in neighboring Ventnor recently. "The possibility exists."

Andrew Zarnett of Deutsche Bank AG predicts significant cannibalization once Revel opens. The smaller venues that are already on the bubble, such as Resorts and the Atlantic Club (formerly the Atlantic City Hilton), could face extinction, he said.

"Revel will hurt the higher-end properties, such as the Borgata, because in order for it to succeed, it needs to target those higher-end customers, and it needs to grow the market," he said. "Some of the smaller, nonprofitable, older casinos will close, and the larger casinos will consolidate the rest . . . of the market."

But Mustapha Moutaouakil, 43, a professional poker player from Mystic, Conn., and a regular at Foxwoods, isn't so sure Revel will steal business from market-leading Borgata - at least not right away.

"I'll check it out. If they have good poker games, I might go there," he said, as he played in a recent tournament at the Borgata.

At times, Revel's reaching completion seemed like a long shot. It began construction in late 2006, but a plane crash in the summer of 2008 killed six executives who were on their way to select glass for the facade.

The recession hit later that year, and lending froze. For two years, Revel sat dormant - a shell at New Jersey Avenue and the Boardwalk.

Work on the interiors, including the restaurants, didn't resume until a year ago after DeSanctis secured the remaining $1.15 billion in financing to complete it.

Five and a half years after it broke ground, Revel Entertainment Group L.L.C. will go before the New Jersey Casino Control Commission on Monday for its casino license. Revel arrives as Pennsylvania and New Jersey duke it out for the second-largest U.S. gambling market title after Nevada. New Jersey's 11 casinos grossed $3.3 billion last year to Pennsylvania's $3.1 billion.

DeSanctis, who was recruited from Penn National Gaming Inc. in 2006 to oversee Revel, and guided it through tragedy and difficult odds, can't help but be optimistic.

Atlantic City's resurrection is "going to take time," he said. "It took us a long time to get in this situation. It's going to take us time to get out.

"I think we'll be part of the positives that are going on."

See a gallery of Revel photographs at www.philly.com/revelphotosEndText