Regulators, Experts Say Ocean Casino Resort Faces Multiple Challenges as Luxor Takes Interim Control, Trustee Named
Posted on: August 11, 2019, 04:02h.
Last updated on: August 11, 2019, 12:52h.
Ocean Casino Resort needs to overcome financial difficulties and other roadblocks, according to the New Jersey state Division of Gaming Enforcement and Casino Control Commission, as regulators last week gave Luxor Capital Group interim control over the Atlantic City property.
The state Casino Control Commission approved interim casino authorization on Wednesday, Aug. 7 for the firm. Regulators will vote later on whether Luxor is qualified to hold the casino’s license. Luxor was given interim casino authorization by the Casino Control Commission only with various financial conditions. The conditions were recommended by the state Division of Gaming Enforcement.
Over the property’s history and different names, the casino has experienced financial setbacks and incomplete plans.
The commission also named Gary Van Hettinga the trustee until Ocean gets a permanent CEO. Earlier, Van Hettinga was the property’s CEO. He also was a top administrator for Caesars World and Tropicana Atlantic City, as well as chief financial officer for the Mohegan Sun in Connecticut.
“He’s a pro,” said Nicholas R. Amato, who is chair of the Casinos & Gaming Industry Group at New Jersey’s Genova Burns law firm. He told Casino.org about Van Hettinga: “He knows the business.”
Amato himself is a veteran of the casino sector in the Garden State. He was executive director of the New Jersey Casino Reinvestment Development Authority, president of the Casino Association of New Jersey, and held key positions with Resorts International and Trump Hotels & Casino Resorts.
Amato noted how, so far this year, the Ocean has had better luck. Ocean has seen more than $102 million in total gaming revenue during the first half of 2019, which includes June, when the property saw $21.49 million.
Gaming revenue, revenue from slot machines, and occupancy for the hotel set records in June, according to Mike Donovan, chief marketing officer and senior vice president at Ocean, the Press of Atlantic City reported.
It looks that it’s starting to show some signs of success,” Amato said about Ocean. “I’m hoping they are going to continue the turnaround in 2019.”
“It’s had a difficult history,” Amato added about the challenges the different owners of the Ocean experienced.
Originally known as the Revel Casino Hotel Atlantic City when it opened in 2012, the casino was not on the first floor. Hotel elevators did not stop on the casino floor, Amato recalled.
“They tried something different,” Amato said. “It didn’t work.”
The property went through bankruptcies. It was sold more than once. Then the casino was reopened in June 2018.
Luxor Group took control of the casino in January. “They corrected as much as they could,” Amato said.
Brian J. Tyrrell, a professor of hospitality and tourism management at Stockton University, told Casino.org, “It’s a real smart move hiring an executive who knows the Atlantic City market well, knows how to compete specifically in the south inlet, and understands the ever-growing northeast gaming market.”
He adds that, “in general … the commission is concerned about the financial stability of the resort, which has under-performed until recently in both phases of its existence. Certainly, the ability to finish the 12 floors of unfinished rooms has to be a consideration.”
He explained that “both the ability to finish the rooms and successfully run the resort at a profit are likely needed for success.”
James T. Plousis, chairman of the Casino Control Commission, pointed out, “We are all acutely aware of this property’s past struggles. In fact, there were real questions as to whether this asset would ever be operational again,” he said to the Press.
Looking ahead, Amato said the casino needs strong financial and executive teams. Also, a key goal is “getting around the numbers,” he said.
Casino management additionally needs to identify “what draws occupancy: customers,” Amato said. “Marketing plays a very big role.”
Luxor was given interim casino authorization by the Casino Control Commission only with various financial conditions. The conditions were recommended by the state Division of Gaming Enforcement.
In 2018, Luxor helped to finance the purchase of the casino by Bruce Deifik, who died in April 2019, for $229 million. Altogether, Luxor invested nearly $70 million into Ocean.
Earlier this year, Luxor announced it wanted to reopen 500 hotel rooms in the existing tower to take Ocean’s total occupancy to 1,900 rooms. An additional 200 slot machines are planned for the casino floor, too.
Another issue for the casino is how to attract pedestrians when it is located at the northern end of the Boardwalk.
New Jersey Wants Tourism Increases
This month, New Jersey Gov. Phil Murphy (D) said he wants to grow tourism and see visitation increase by more than a quarter by 2023. Jeff Vasser, executive director for the New Jersey Division of Travel and Tourism, told the Press of Atlantic City the beachfront casino town is the state’s best asset in increasing visitation.
New Jersey welcomed nearly 111 million visitors last year, who spent more than $22 billion. Atlantic City was responsible for 43 percent of the overnight guests.
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