Inside Asian Gaming

inside asian gaming October 2014 44 Revel Sold at Auction for US$110 Million A Canadian asset management company has won a bankruptcy court auction for Atlantic City’s Revel Casino Hotel, bidding US$110 million for a resort that cost $2.4 billion to build and confirming plans to reopen it as a casino. Toronto-based Brookfield US Holdings, owners of the Hard Rock casino in Las Vegas and the Bahamas’ Atlantis Paradise Island, beat out Florida developer Glenn Straub’s $95 million bid and is waiting for approval from the federal judge overseeing Revel’s reorganization. “These are the first people that realized what I’ve been saying about Atlantic City turning the corner and being a great investment due to the low prices,” Mayor Don Guardian told The Associated Press . “We’ve had a lot of bad news. This is certainly some good news.” Revel, which has been in two court-supervised reorganizations since opening in April 2012, was one of four Atlantic City casinos to go out of business this year as the troubled seaside gambling hub reels from regional competition and the lingering effects of the recession. The others are Atlantic Club, Showboat and Trump Plaza. A fifth casino, Trump Taj Mahal, looks headed for closure in November, and it’s reported that Bally’s Atlantic City and Caesars Atlantic City face an uncertain future amid the complicated asset shifts and negotiations with bondholders accompanying debt- laden owner Caesars Entertainment’s attempt to avoid entering the protection of US Bankruptcy Court. To cut costs and try to thin the competition, Caesars shuttered the profitable Showboat casino in August. However, there are questions surrounding Brookfield’s financial status as well after the company told securities regulators in August that it was unable to make an interest payment due that month on the Hard Rock’s nearly $1 billion of debt. A spokesman said ongoing negotiations with the Hard Rock’s lenders would not affect its ability to complete the Revel purchase. Mr Straub and his company, North Polo Country Club, are waiting in the wings in case the deal falls through. The designated backup bidder, he has challenged Brookfield’s winning bid, claiming the process was conducted in secret and lacked transparency. “We have to decide whether we’re going to fight it in court, whether to try to top [Brookfield’s bid], or something else,” an attorney representing him said. Mr Straub has spoken of plans to convert the property into a think tank dedicated to tackling global problems. He has said retaining a casino also is an option. Wynn Sues Short-Seller for Slander Wynn Resorts is suing hedge fund short-seller Jim Chanos for slander, claiming he falsely accused the Macau and Las Vegas casino giant of violating the US Foreign Corrupt Practices Act. Bloomberg reports that the complaint, filed in US District Court in San Francisco, was prompted by remarks made by Mr Chanos, who founded and heads New York-based Kynikos Associates. It alleges he told an audience at a recent invitation-only event in California that Wynn and its Chairman Steve Wynn violated the act, which outlines the legal framework under which a US-based or -listed company can be prosecuted for bribing officials of foreign governments. Wynn famously removed Kazuo Okada from its board of directors and bought out his substantial shareholding following an in-house investigation that concluded the Japanese machine gaming magnate had made improper payments to influential people in the Philippines to clear a path for a multibillion-dollar resort casino his companies are pursuing in Manila. In the course of that dispute, which is still in litigation, Mr Okada questioned the propriety of a US$135 million donation Wynn Resorts made to the University of Macau at a time when the company was seeking Macau government approval to expand in the city’s Cotai resort district. That prompted US authorities to investigate the donation. INTERNATIONAL BRIEFS Revel Casino Hotel Jim Chanos “Wynn and Wynn Resorts have been thoroughly investigated in a public manner on numerous occasions by entities such as the Nevada Gaming Control Board, the Massachusetts Gaming Commission, the Securities and Exchange Commission, and other government agencies,” the company said in the complaint. “At no time has any official agency suggested that there is any reliable evidence that plaintiffs, or either of them, have violated the Foreign Corrupt Practices Act.” Mr Chanos, whose fund specializes in short-selling, argues that China’s economy is overheated due to its dependence on property development for growth. He declined to comment on the lawsuit, according to Bloomberg .