Luxor Capital Group Revealed as New Buyer of Ocean Resort Casino Atlantic City
Posted on: January 29, 2019, 10:03h.
Last updated on: January 29, 2019, 10:16h.
Ocean Resort Casino’s new controlling owner was finally identified this week as Luxor Capital Group — a New York City-based hedge fund — which will take over from current owner Bruce Deifik, who will be out of the picture entirely once Luxor takes over.
Putting to rest weeks of speculation, it was revealed late Monday in a press release that the private investment firm will be the controlling stakeholder of the Atlantic City resort casino.
Luxor — which has investments ranging from real estate to energy — continues to pump in money to improve the Boardwalk casino, and it will provide some $70 million for added renovations and upgrades. The company frequently “works closely with the management teams of their portfolio companies,” according to a recent press release on an unrelated business deal.
The Las Vegas casino which shares the company’s name is not part of its portfolio or in any way affiliated with the hedge fund.
Handing It Over
The Atlantic City casino has changed hands several times in recent years.
Deifik purchased the former Revel Casino Hotel from Glenn Straub in January 2018 for $229 million. That transaction was funded by Luxor, which gave about $122.5 million, and J.P. Morgan Chase, which provided $110 million.
Originally, Revel’s construction cost $2.4 billion. Two years later, the resort casino closed in 2014, and Straub bought the property for $82 million in 2015.
The new owners still need to be approved by the New Jersey Division of Gaming Enforcement (NJDGE), and Luxor will need an interim license. That license should be approved within three to four months. Until that happens, an appointee will be named to oversee a trust.
Luxor Capital plans to will add more rooms and suites, a buffet, improvements to the casino floor, and expanded entertainment options to the casino’s 6.4 million total square feet, which already encompasses 138,000 square feet of gaming, a sports book, meeting space, and a 5,000-seat concert hall.
Under Deifik, investors had hoped the property would net over $384 million in gross gambling revenue (GGR) in its first full year. But the Ocean Resort has won less than a third of that with $101.1 million from the time of its June opening through the end of 2018.
Of the nine casinos in Atlantic City, Ocean Resort won the fewest gaming dollars last month at $14 million. Ocean Resort brings in just 5.6 percent of New Jersey’s land-based gaming economy.
When it reopened in June along with Hard Rock Hotel & Casino Atlantic City there was hope the two additional casinos would bolster the city’s gambling and entertainment-based economy.
One immediate issue for both casinos has been Unite Here Local 54 — the casino workers’ union. Unite Here represents a combined 2,500 workers at both properties, and is headed up by Bob McDevitt, but negotiations have not always gone smoothly.
Former Tropicana Atlantic City owner and billionaire Carl Icahn blamed Unite Here for the downfall of the Trump Taj Mahal, the casino that has sinced morphed into the Hard Rock.