The new controlling owner of Atlantic City’s Ocean Resort—formerly the Revel casino—is a New York based hedge firm Luxor Capital Group.
The firm has no connection to the Luxor casino in Las Vegas.
Former owner, Colorado-based real estate developer Bruce Deifik’s announced in January that the casino’s ownership was changing hands, but did not provide details of the deal including identifying Luxor.
However, according to the Press of Atlantic City, Deifik purchased the former Revel Casino Hotel in January 2018 for $229 million using a combination of financing from Luxor and J.P. Morgan Chase. The funding consisted of two bridge loans: $110 million from JPMorgan Chase Bank and $122.5 million from Luxor. The J.P. Morgan loan was repaid in June with a second loan from J.P. Morgan of $175 million.
Luxor now takes over the ownership and operating interest of Deifik and his family. Deifik initially said he would retain a small, non-controlling interest in the property but an announcement form Luxor said Deifik no longer has an interest in the property. However, AC Ocean Walk, a holding company of which Deifik was the chairman, is still the property’s casino license holder, according to the Press.
Since opening in June, Ocean Resort has struggled in the city’s crowded casino market. Luxor, however, has said it will make a $70 million investment into the property.
“We are incredibly proud of the progress our team members have made in establishing Ocean Resort Casino as one of the premier gaming and leisure destinations in the United States,” said Frank Leone, CEO of Ocean Resort Casino in a press release. “We opened up the property even more effectively to the Boardwalk, and activated retail spaces and food and beverage options that have been extremely well-received by our guests.”
Luxor’s investment is to include a new buffet, additional suites and rooms and investments on the casino floor. It also plans “a substantial increase” in its entertainment programming and player events in 2019.
According to a news release, the company expects to formally invest the $70 million this month pending the regulatory approvals and final documentation. The proposed investment will help fund the 2019 projects and provide the casino with more financial flexibility, the release said.
Once the investment is approved, Luxor will undergo the licensing process by New Jersey gaming regulators.
Until Luxor receives interim licensing approvals—which could take between 90 to 120 days—a trust will be created for the purpose of holding the shares of the parent entity to AC Ocean Walk, the current license holder.
A trustee, who will be appointed upon closing of the $70 million investment, will oversee this trust until Luxor receives its interim authorization, at which point the trustee will be removed. The company expects no operational effects from the temporary existence of the trust, the release said.
According to the release, the company has approximately $3.2 billion in assets under management and pursues an “event-driven” strategy to investment. The casino has already announced an expanded entertainment lineup that includes performances by the Isley Brothers, .38 Special, the Monkees, Jethro Tull, Brooks & Dunn and more.
Ocean Resort is the former Revel casino, a $2.4 billion resort, which opened in 2012 and closed two years later. Deifik’s group re-opened it as Ocean Resort in June. The casino reported $101 million in total gaming revenue in 2018, including about $8.4 million from its William Hill Sportsbook.
