A new investor is looking to spend some dough on Atlantic City’s Ocean Casino Resort.
According to a news release, Ilitch Holdings Inc., a Michigan-based company that owns the Little Caesars pizza chain and operates Detroit’s MotorCity Casino Hotel, has acquired a stake in Ocean Casino Resort. Ilitch also owns the NHL’s Detroit Red Wings and MLB’s Detroit Tigers.
Details on Ocean Casino Resort, Ilitch Holdings deal
Luxor Capital Group LP, a New York City-based hedge fund and current owner of Ocean Casino Resort, said they have reached a deal for Ilitch to acquire, through an affiliate, up to half the ownership of the Atlantic City property.
“We are extremely excited about the proposed investment by the Ilitch organization, which, if approved, will give Ocean access to growth capital and provide a strategic partner to Luxor,” the hedge fund said Tuesday in a news release announcing the partnership. “We look forward to continuing to grow Ocean in partnership with the Ilitch organization for years to come.”
New Jersey gaming regulators still have to approve the deal. According to the Associated Press, Ilitch has already applied for interim approval to own part of the casino.
A brief history of Ocean Casino Resort
Luxor took control of Ocean in January 2019 from the late Bruce Deifik, a Colorado-based investor who reopened the shuttered casino in the summer of 2018. The luxury resort, formally known as Revel Casino Hotel, closed in 2014 after just two years of operation.
Luxor assumed control of the property after several months of underwhelming financial results. The hedge fund was granted a casino license in May 2020. They immediately infused more than $70 million into Ocean, paying down debt and improving the overall product.
Since Luxor took over, Ocean’s casino revenue from table games and slot machines has increased. Of AC’s nine casinos, Ocean jumped from sixth in 2019 to third in 2020, trailing only Borgata and Hard Rock Hotel & Casino.
In Tuesday’s announcement, Luxor noted “the Ilitch organization recognizes the success that the team at Ocean has achieved over the past two years,” and “looks forward to …building on their accomplishments through continued investment in both the property and the customer experience.”
iGaming is opportunity
One area where Ocean has yet to gain financial ground is online gambling.
The coronavirus pandemic forced AC’s casinos to close for nearly four months in 2020. Online gaming revenue increased 101% over 2019, generating more than $970 million.
However, Ocean reported slightly more than $10 million from iGaming last year, dead last in the market. For now, the portfolio includes an Ocean-branded app and Parx online casino.
Possible NJ Sports betting impact at Ocean
However, the casino’s retail sportsbook was the third-highest performer in 2020, behind Borgata and Tropicana. The William Hill Sports Book at Ocean reported just over $1.3 million in revenue last year.
Should Ilitch be approved by NJ gaming regulators, it could impact certain game offerings at the William Hill Sportsbook. NJ’s sports betting law restricts owners of sports teams or league investors from offering betting lines at casinos under the same ownership.
Because Ilitch owns the Red Wings and the Tigers, neither team’s games would be available at Ocean’s sportsbook. A similar prohibition occurs at Golden Nugget Atlantic City, where the casino’s owner, Tilman Fertitta, also owns the NBA’s Houston Rockets.