Ilitch bid for Atlantic City casino stake gets interim approval
The Ilitch organization is one step closer to owning a share of an Atlantic City casino.
As first reported by Crain’s Detroit Business, the New Jersey Casino Control Commission granted Thursday an interim casino authorization license for Ilitch-affiliated OCR Investment LLC for an ownership stake in the Ocean Casino Resort. In April, New York hedge fund Luxor Capital Group LP said it would sell as much as half of its ownership of the Ocean Casino to the Ilitch family.
Ilitch will acquire 50% of the casino for $175 million, the Associated Press reported. Of that investment, $75 million will be used during the next year to complete 464 hotel rooms that have remained unfinished since the property opened in 2012.
In a statement sent to The Detroit News, Bruce Dall, president of OCR Investment, thanked the commission.
“We would also like to thank the Division of Gaming Enforcement for all their hard work,” he said. “We look forward to finalizing the remaining regulatory issues, completing the transaction, and then working with the Ocean team to build on their success through continued investment in the property, Atlantic City, and the State of New Jersey.”
Luxor and the Ilitch organization will share equally in decisions involving the resort, Luxor officials said Thursday.
Michael Conboy, a principal at Luxor, said the Ilitch organization looks to be a strong partner to own and operate the casino. “I wouldn't say we kissed a lot of frogs, but we batted eyelashes at a lot of frogs, and we found a prince,” he told the casino commission, according to AP. “They share our growth vision.”
The sale is expected to close within 30 days.
It follows the resignation on Monday of Ocean's president, Terry Glebocki, AP reported. The casino would not say whether the two events were related.
Luxor officials said construction will begin during the next year on 12 floors of the hotel, adding 360 guest rooms and nearly 100 suites. Plans also call for increasing Ocean's non-gaming amenities, including dining and entertainment.
“Over the last year, Ocean has worked to strengthen its position in the market,” Bill Callahan, Ocean's executive vice president of hospitality and gaming, said in a statement. “We are excited to advance Ocean’s achievements. The ability to meet growing demand in our hotel experience will create new energy throughout the resort — from our casino floor and award-winning restaurants to our renowned nightlife and entertainment venues.”
Marian Ilitch, matriarch of the family, owns MotorCity Casino Hotel. The Ilitch family owns the Little Caesars pizza chain, the Detroit Tigers and Red Wings, and extensive real estate holdings in Detroit.
The Ocean Casino opened in 2012 as Revel, a $2.4 billion resort that immediately ran into financial trouble, leading to two bankruptcy filings and its closure after just over two years.
A Colorado developer, the late Bruce Deifik, bought the casino in January 2018 for $200 million and reopened it that summer. After he ran out of money, Luxor assumed ownership of the casino in January 2019. Luxor received final approval from New Jersey regulators in May 2020 to own and operate the casino.
For the first eight months of this year, the most recent statistics available, Ocean has won more than $219 million, more than twice what it won in the same period last year. That ranks it sixth out of Atlantic City's nine casinos in terms of gambling revenue.
Associated Press contributed.