New Jersey gambling regulators on Thursday approved the sale of half of the Ocean Casino Resort in Atlantic City to the Ilitch organization, which has professional sports teams, a national pizza chain and a casino in Detroit.
The New Jersey Casinos Control Commission has approved the sale, under which Ilitch will acquire 50% of the casino for $ 175 million, and share the major decisions regarding its operation equally with the current owners, Luxor Capital Group LP , a New York hedge fund.
Of this investment, $ 70 million will be used to complete 464 hotel rooms that have remained unfinished since the property opened in 2012.
Michael Conboy, Director of Luxor, said the Ilitch organization appears to be a strong partner in owning and operating the casino.
“I wouldn’t say we kissed a lot of frogs, but we beat a lot of frogs’ eyelashes and we found a prince,” he told the casinos commission. âThey share our vision of growth.
The sale is expected to close within 30 days.
It follows the resignation Monday of Ocean President Terry Glebocki. The casino did not want to say if the two events were linked.
No successor has yet been publicly named. Conboy said an interim CEO will be appointed within 10 days.
âWe are delighted to welcome the Ilitch organization to Atlantic City,â Luxor said in a statement. âTheir investment gives Ocean access to growth capital and provides Luxor with a strategic partner. Over the past year, the Ocean team has progressed under new leadership comprised of senior executives from the gaming and hospitality industries. Since then, Ocean has strengthened its position in the market and continues to gain market share. We look forward to moving the business forward with the Ilitich partnership.
Ilitch owns the Detroit Tigers baseball and Red Wings hockey teams, the Little Caesars pizza chain, and the MotorCity Casino Hotel in Detroit. The sale was announced in April.
Ocean said Thursday it will make $ 75 million in reinvestments next year, most of which will consist of a $ 70 million chamber project. It will complete 12 floors of rooms, comprising more than 360 rooms and 100 new suites.
âOne of the ways to grow the market is to build more rooms,â Conboy said. âThe demand is there 100% for 180 to 200 days a year.
Ocean Casino opened nine years ago as Revel. The $ 2.4 billion complex immediately went into financial trouble, leading to two bankruptcy filings and its closure after just over two years of operation.
Colorado developer Bruce Deifik bought it in January 2018 for $ 200 million and reopened it that summer. But he quickly ran out of money. Luxor, which was one of its lenders, assumed ownership of the casino in January 2019 in exchange for debt forgiveness from Deifik. Deifik was killed in a car crash in April 2019.
In May 2020, New Jersey regulators gave Luxor final approval to own and operate the casino. At that hearing, Michael Conboy, a hedge fund partner, told regulators the company plans to own and operate the casino for at least the next 25 years.
For the first eight months of this year, according to the most recent statistics available, Ocean earned over $ 219 million, more than double what it earned in the same period last year. This ranks it sixth out of nine Atlantic City casinos in terms of gaming revenue.