New Jersey gaming regulators approved the bid for a Detroit-based hedge fund to acquire half ownership of Ocean Casino Resort for $175 million.
Holding company Ilitch organization will own 50% while Ocean’s current owners, New York hedge fund Luxury Capital Group, will retain the remaining half.
The plans were approved following two days of meetings by state gaming regulators, first by the New Jersey Division of Gaming Enforcement on Oct. 13, and by the state’s Casino Control Commission the next day. The sale is expected to go through in the next 30 days.
Ilitch, which owns MotorCity Casino in Detroit, the Detroit Tigers and Detroit Red Wings, as well as the pizza chain Little Caesars, will spend $75 million on upgrades at one of New Jersey’s youngest casinos.
That includes $70 million to do work on the more than 360 unfinished guest rooms and 100 suites that were not completed since Ocean Casino Resort’s opening in 2012. They will be situated on an added 12 floors of hotel space.
“We are excited to welcome the Ilitch organization to Atlantic City. Their investment gives Ocean access to growth capital and provides a strategic partner to Luxor,” reads an Oct. 14 statement from Luxor.
The sale comes days after Terry Glebocki, Ocean’s chief executive officer, abruptly resigned. Luxury and Ilitch executives, when asked by gaming regulators, would not say whether the resignation and the sale were related.
While a successor has not yet been named, Michael Conboy, an executive at Luxury, said an interim CEO would be named later this month.
“Given that Ocean’s positive performance is still recent and in light of its recent corporate restructuring and the recent departure of its CEO, it is important for regulators to remain diligent in their oversight during OCR’s interim casino authorization period,” James Plousis, who chairs the state CCC, said during the hearing.
Ocean had taken more than a decade to get its finances in order and put itself on sound footing—first opening as Revel in 2012 after a $261 million state tax break the year prior, on top of hundreds of millions of dollars in public and private financing.
But the casino was consistently in the red, and declared bankruptcy, then closed in 2014. The casino switched hands numerous times both before and after Revel.
Bruce Deifik, a Colorado-based developer, bought it in January 2018 for $200 million and opened it that summer, but after running out of cash sold it in 2019 to Luxur, one of the lenders. He was then killed in a car accident in April that year.
According to the NJDGE, Ocean has brought in $219 million in the first eight months of 2021, trailing behind five of the state’s nine casinos all based out of Atlantic City.
Last year, all of the city’s nine casinos had to entirely shutter brick and mortar operations for three and a half months during the state’s worst bouts of the COVID-19 pandemic. Then nearly a year later, beginning in July, they reopened operating at reduced indoor capacity.
Ocean managed to stay in the black during the worst of the pandemic.