Originally announced in April 2021 by primary owner, Luxor Capital Group L.P., the sale of half of Ocean Casino Resort in Atlantic City to Detroit-headquartered conglomerate Ilitch Holdings Incorporated was approved by New Jersey gambling regulators on Thursday.
Among other businesses, the family-run organization [Ilitch] owns MotorCity Casino Hotel in Detroit, as well as the Detroit Red Wings and Detroit Tigers professional sports franchises of the National Hockey league (NHL) and Major League Baseball (MLB), respectively.
Under the sale approved by the New Jersey Casino Comission, Ilitch will acquire 50 percent of the Boardwalk casino for $175 million, and will split decision making regarding its operation, with current owner, Luxor Capital Group. The New York-based hedge fund purchased its 83 percent stake in the 20-acre New Jersey property once known as the Revel Casino Hotel in January of 2019
Seventy million dollars of the investment will reportedly be used to complete some 464 hotel rooms that have remained in an unfinished state since the opening of the former Revel Casino Hotel on April 2, 2012.
According to the Associated Press via U.S. News & World Report, Michael Conboy, Director of Research & Portfolio Manager at Luxor, told the casino commission that the Ilitch organization shares their growth vision.
The sale, which is reportedly expected to close within 30 days, follows the Monday morning resignation of the Atlantic City casino resort’s Chief Executive Officer, Terry Glebocki, who helped the casino return to profitability after it lost money for years.
Conboy reportedly said that an interim CEO is to be named within 10 days.
“We are excited to welcome the Ilitch organization to Atlantic City,” Luxor said in a statement.
“Their investment gives Ocean access to growth capital, and provides a strategic partner to Luxor. Over the last year, Ocean’s team has progressed under new leadership that features top executives in the gaming and hospitality industries. Since that time, Ocean has strengthened its position in the market and continues to gain market share. We look forward to moving the business forward with Ilitich’s partnership.”
According to the news agency, Ocean said it will reinvest $75 million in the property next year, with the lion’s share to be used for the $70 million room project. More than 360 guest room and 100 new suites spread over 12 floors of rooms will reportedly be finished.
Conboy reportedly said the demand for rooms “is there 100% over 180 to 200 days a year.”
In February 2019, Ocean Resort Casino’s former Chief Executive Officer, Frank Leone, and Chief Financial Officer, Alan Greenstein, were terminated, with Glebocki replacing Greenstein as CFO before serving as interim CEO and in December 2019 being named to the position.
Built in 2012 at a cost of $2.4 billion, the former Revel Casino Hotel Atlantic City struggled to fill its 1,399 rooms and was closed in September of 2014 after filing for the second round of Chapter 11 bankruptcy protections. Seven months later, in April 2015, Florida developer Glenn Straub’s Polo North Country Club Inc. purchased the 6-million-square-foot-plus facility for $82 million and soon thereafter announced plans to reopen the property under the name TEN Atlantic City.
The plan never did come to fruition and in January 2018, the Atlantic City casino was sold to Colorado developer Bruce Deifik’s group, ACOWRE LLC, for $229 million, with the New York hedge fund and JPMorgan Chase Bank primary lenders for the purchase.
Deifik reopened the property on June 27 the same year but just months after opening, Ocean Resort requested and was granted temporary relief of a state-established minimum liquidity requirement, which was later extended by a month. The Atlantic City property had reportedly not been in compliance with the state Division of Gaming Enforcement (DGE) requirements since November 2018, ultimately leading to a February 6, 2019, divestiture trust agreement.
The venue reportedly lost a total of $18.6 million from September through December 2018.
Deifik was in the process of relinquishing ownership to Luxor Capital Group at the time of his tragic car accident in April 2019 after efforts to refinance the property were unsuccessful.
In May 2020, Luxor was given final approval by New Jersey regulators to own and operate the casino. According to the Associated Press, at that hearing, Conboy told regualtors that Luxor planned to maintain ownership of the casino and operate it for at least the next 25 years.