Revel, the Atlantic City Casino Morgan Stanley poured $1.2 billion into and then booked a $1 billion loss on when the bank washed its hands of the place, which still haunts some senior executives’ dreams and is the word James Gorman whispers to employees with a knowing glance when it looks like they’re about to get in over their heads on something, is shutting its doors.
The already bankrupt Revel announced on Tuesday that it would shut down after failing to find a qualified buyer during a court-supervised auction process. Its failure comes a little more than two years since the resort opened in a bid to reinvigorate the long-declining gambling industry in Atlantic City. The decision to shut down also comes more than four years after Morgan Stanley, the original backer of the resort, walked away from what was even then a costly folly. The bank announced in April 2010 that it would sell its majority stake in the project – after taking a write-down of roughly $1 billion. Banks have had at best a spotty record of moving into the gambling industry. Deutsche Bank struggled for years with the Cosmopolitan resort in Las Vegas, only finally exiting its investment by selling the site to the Blackstone Group this spring…In June, Revel filed for bankruptcy protection after failing to negotiate a sale to Hard Rock International. Hope remained that another buyer would emerge and close on a deal. But by Monday, with no qualified bid having emerged, the resort’s owners decided to fold.