More Atlantic City Casinos Threatened

Atlantic City was dealt more bad news Tuesday, as the closure of the Resorts casino appears imminent, and Morgan Stanley announces that it is selling off its Revel development.
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NEW YORK (TheStreet) -- Atlantic City's losing streak just keeps getting worse today, as Resorts Atlantic City announces that it might go under and Morgan Stanley (MS) - Get Report folds its Revel casino development.

Resorts, which was the first casino in Atlantic City, announced in a filing today that its financial challenges "raise substantial doubt about the company's ability to continue as a going concern."

According to Resorts, severe storms that plagued much of the U.S. this winter dampened its operations and, as a result, "the company will be subject to severe cash shortages."

In 2009, Resorts posted a loss of $18 million on revenue of $161.2 million.

One of the few chances of revival for the New Jersey gambling hub rested on the development of Revel casino. But that hope was squashed last week when Morgan Stanley revealed it would put the property up for sale.

Morgan Stanley has already invested $1.2 billion on the project, which was slated to cost $2.6 billion. The opening of Revel had been postponed last year until 2011 after financing ran out.

The abandonment of Atlantic City

has been profound over the past year. Most notably,

MGM Mirage

(MGM) - Get Report

said earlier in the year that it will divest its 50% stake in the Borgata.

MGM decided to part ways with Atlantic City after New Jersey Regulators deemed its Macau business partner, Pansy Ho, unsuitable, due to allegations of links to Chinese organized crime.

As MGM prepared for an initial public offering of its Macau assets, and the Chinese gambling enclave cpntinues to see massive growth, it would only make sense for MGM to chose Macau over Atlantic City.

It's worth noting that

Pinnacle Entertainment

(PNK) - Get Report

also announced in February that it is forsaking its plans to build a $1.8 billion casino on the Boardwalk, and subsequently put its 19 acres of land, which were formerly the site of the

Sands

(LVS) - Get Report

Atlantic City, up for sale

Pinnacle purchased the property in 2006 from

Carl Icahn

for $270 million. It demolished the casino, but halted development in 2008 because of problems accessing financing.

-- Reported by Jeanine Poggi in New York.

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