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Asm. Caputo Not Surprised By Revel’s Bankruptcy, Says State Needs to Expand Gaming Beyond AC

2-21-13

After Revel executives announced they will file for bankruptcy, Gov. Chris Christie expressed confidence that the resort can emerge successfully, but some Democrats aren’t convinced. Assemblyman Ralph Caputo (D-28), a member of the Regulatory Oversight and Gaming Committee and a former casino executive, told NJ Today Managing Editor Mike Schneider that he wasn’t surprised Revel is going into bankruptcy. He said the casino wasn’t properly marketed in the current economic climate but hopes it can turn around its numbers to help revive the gaming industry in Atlantic City.

Caputo said the economic downturn since the original plans for Revel contributed to its poor performance as has the “vicious competition” from Pennsylvania and New York. He also believes the casino had a poor marketing strategy and failed to adapt to the market conditions of the region.

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“In this market I think you’ve got to appeal to the masses. It’s a very expensive place to be and I don’t believe they marketed the property properly,” Caputo said. “I don’t think it was designed properly. I think it’s a beautiful property but I don’t think it adapts to the environment that we’re in.”

Revel isn’t the only casino struggling, according to Caputo. “The problem is that we’re losing ground every day. Our outside competition is eating our lunch. Pennsylvania is now number two behind Las Vegas. And the numbers in Atlantic City are dismal,” he said. “Revel was really a referendum on the gaming industry in New Jersey and it’s not working out the way we want it to.”

Caputo said Revel should have opened with more of a bang than it did, even though the casino had a Beyonce concert at its inception. He said doing that type of opening 10 or 15 years ago would work but in today’s market it doesn’t.

In addition to a stronger opening, Caputo said Revel should have offered incentives for people who live in areas without gambling options. “Atlantic City was a resort for 100 years. Where did it end up? Atlantic City is not a resort destination. The reason why it came back for the last 30 years was because of gaming,” he said. “We’re losing gaming dollars so we’ve got to establish flights from areas in the country where there is no convenience gambling so we can bring new markets of people into Atlantic City.”

The feeder markets for Atlantic City are New York, North Jersey and Pennsylvania and Revel is caught in a squeeze because there are other gambling options closer to those areas than Atlantic City, according to Caputo. “They’re going to have to look for new markets to try to save the city,” he said.

Another option to help the state’s gaming industry survive would be to expand the ability to have gambling outside of Atlantic City, Caputo said. “The way it’s going, we’re losing time. New York is taking hundreds of millions of dollars out of here. Pennsylvania’s doing the same,” he said. “We’re not making the progress that we should have made.”

Caputo has a bill proposing that voters decide where gaming is available in New Jersey, as it was done in 1977. “I believe that the Meadowlands is a perfect location. I also feel that the casinos themselves could make that investment, sharing those profits and stop the outflow of millions of dollars that are going to other states to save the gaming industry in this state. It’s the state of New Jersey that I’m concerned about. And I believe Atlantic City could be a part of that,” he said. “They should create other destinations to bring people in but also be part of a new destination, which Pennsylvania’s doing very successfully.”