New Owner Luxor Capital Shakes Up Ocean Resort Management Team

Frank Leone and Alan Greenstein, two key members of the Ocean Resort team, are out. The new owner tapped replacements to oversee the Atlantic City casino.

Luxor Capital Group, the New York-based hedge fund, wasted little time in making changes at Ocean Resort Casino.

The ownership change is still in the transitional phase, but the Press of Atlantic City reported that two key members of the management team have been replaced.

Frank Leone and Alan Greenstein, who served as CEO and CFO, respectively, are out.

Eric Matejevich, who previously served as COO at the now-shuttered Atlantic Club, is filling Leone’s role on a temporary basis. Terry Glebocki is taking over for Greenstein. Glebocki is a former CFO of Tropicana Atlantic City.

The Casino Control Commission (CCC) approved Matejevich as designated trustee of Ocean Resort during last week’s hearing.

Luxor Capital released a statement about the shakeup:

“As we move forward with enhancements to the guest and player experience — including substantial increases in our entertainment programming and player events throughout the year, adding a world-class buffet, additional suite and rooms, incremental investments on the casino floor and other exciting projects — Terry and Eric’s expertise will be invaluable in continuing our momentum.”

Ocean remains a property in transition

The new management team faces an uphill financial climb. Since opening in June, Ocean has consistently finished last or near the bottom in revenue.

Luxor will focus on resolving this problem once the ownership change is completed. Last week’s appearance in front of the CCC was a big step in this process.

Former principal owner Bruce Deifik and the new pending owner filed a joint petition for a divestiture trust agreement. The move was unanimously approved by all three members of the committee.

But there was other not-so-great news that came out of the hearing: Ocean was $23 million in the red and failed to meet compliance guidelines since November.

But rumors of a sale started swirling toward the end of 2018.

By Jan. 10, a little more than six months after the property reopened, the sale to a mystery buyer was confirmed. Weeks later, Ocean Resort confirmed via a press release that Luxor Capital was the buyer.

Keep in mind that Ocean opened on the same day as Hard Rock Atlantic CityThe latter property — the rebranded Trump Taj Mahal — has not experienced the same struggles.

But Hard Rock is an established brand, whereas Ocean is still trying to make a name for itself.

Next chapter for Ocean Resort AC

Luxor still needs to be approved for a casino license by the New Jersey Division of Gaming Enforcement. The process can take up to 120 days.

Even though the new owner has yet to take over complete control of the property, they have announced plans for a $70 million investment in Ocean Resort.

Next month’s NCAA Men’s Basketball Tournament should certainly help with drawing foot traffic to the property during what tends to be a slower weekday period for Atlantic City casinos.

This is the first year March Madness betting is legally permitted in New Jersey. It could amount to one of the busiest periods on the NJ sports betting calendar.

Super Bowl LIII drew a standing-room-only crowd to the William Hill Sportsbook at Ocean Resort.

Meanwhile, Atlantic City’s prime season, Fourth of July through Labor Day, is still several months away.

The property features plenty of amenities in terms of entertainment, dining, and shopping, but the key to success is winning on the casino floor.

It’s an ongoing problem that dates back to the days when the property was known as Revel.

It’s now Luxor Capital’s and the two new managers’ problem to solve.

Ocean Resort Casino’s Mystery Owner Revealed To Be New York Hedge Fund

Luxor Capital Group, the hedge fund that lent money to Ocean Resort Casino, is ready to make another significant investment in the Atlantic City casino.

The news of Ocean Resort Casino switching hands started making headlines earlier this month. But at the time, the name of the owner replacing Bruce Deifik was not known.

The mystery buyer is no longer a mystery.

Luxor Capital Group, the private investment firm based in New York City that lent money to Ocean Resort, is assuming ownership of it. There is no connection between the company and Luxor Hotel & Casino in Las Vegas.

Luxor will assume control once it receives interim licensing approval, which according to the press release, is expected to take approximately 90 to 120 days.

While the process is being completed, a trust will be created for the purpose of holding the shares of the parent entity to AC Ocean Walk.

More from the press release:

“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. Ocean Resort Casino expects no operational effects from the temporary existence of the trust.”

While earlier discussions hinted that Deifik would retain a small, non-controlling interest in the property, he, in fact, will have no ownership in the company at all.

Ocean Resort’s future in Atlantic City

As part of the ownership change, plans included a substantial investment of $70 million in the property “to further enhance the exceptional guest and player experience.”

Specific capital investment plans include a world-class buffet, additional suite and room products, and improvements to the casino floor. Ocean Resort also plans on increasing its entertainment programming and player events throughout the year.

From Frank Leone, CEO of Ocean Resort Casino:

“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.”

“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. We are thankful for the support we have received from the broader Atlantic City and New Jersey community and look forward to an exciting 2019.”

Ocean Resort and its revolving door of owners

The good news here is that while there is a change in ownership, Ocean will not be closing its doors. The casino and its NJ gambling site will remain open for business. And the transition is expected to be a smooth one while the new owner gets its casino licensing in place.

But it’s the cherry on top of a sour seven months in operation.

The former Revel, the $2.4 billion bust that opened in April 2012 and closed in September 2014, has had a history of ups and downs. Revel opened with a lot of glitz and fanfare, but two bankruptcies and insurmountable debt created a no-way-out scenario.

Glenn Straub purchased the property with plans to transform it into TEN. But constant clashes with Atlantic City officials led him to sell the property to Deifik.

Ocean Resort AC held its grand-opening ceremony on June 28. It was the same day that neighboring Hard Rock Atlantic City (the former Trump Taj Mahal) opened its doors.

While Hard Rock has performed well in the all-important casino revenue department, Ocean has struggled versus the smaller gaming halls in town.

And unlike Hard Rock, Caesars EntertainmentMGM and Atlantic City’s other more established companies, Ocean does not have the brand recognition or the player database that are to key to success.

Time will tell if the new owners have the solution to transform Ocean into the success story it was built to be.

Confirmed: Ocean Resort Casino Will Get A New Owner After Six Months

After rumors started circulating, Ocean Resort Casino’s Bruce Deifik confirmed that the Atlantic City casino will be sold to an unnamed company.

Ocean Resort Casino has officially been sold. Again.

Just six months into its latest life at the far end of the Atlantic City Boardwalk, the former Revel Casino will have a new majority ownership stake with an unnamed entity.

Bruce Deifik, the current owner, would not reveal the new owner’s identity, but told the Associated Press that if approved, “this next round of investment into Ocean will put this property on an exciting path to growth.”

The casino plans to remain open.

Ocean Resort under new ownership

Rumors started to circulate about a possible sale of the casino on Jan. 9. As it is, the new owner brings with it a $70 million investment to Ocean Resort.

While the new owner would need to be licensed by the New Jersey Division of Gaming Enforcement, Deifik and his family expect to retain only a small, non-controlling ownership interest, according to the AP.

Deifik said it had been an honor to be a part of the casino’s transformation in AC:

“My family and I want to thank the 3,000-plus employees at Ocean for their tireless work to bring our property to life and put it on track to become the best gaming property in New Jersey.”

While nothing is known yet about the new owner, Ocean Resort plans to use the investment funds to open a buffet on site and add rooms. Additionally, the casino will boost its current entertainment and player events.

First six months were hit and miss

Since opening in June alongside another reborn property, Hard Rock Atlantic City, Ocean Resort has been at the bottom of the pack in terms of revenue.

Before opening, Deifik remodeled the casino floor, improved customer service, and built a state-of-the-art Ocean Resort sportsbook.

When the finished NJ sports betting site opened officially, Deifik told he was pleased:

“I think that sends a pretty clear message that people are hearing very interesting things about Ocean. There’s no doubt that we have a great, world-class sportsbook, and it’s in a very good location.”

Despite all of this, the casino’s revenue history remains a sore spot.

In November, Borgata Casino’s total gaming win was $55.8 million, while Ocean Resort was dead last at just $11.7 million.

In that same month, Hard Rock AC won $21.5 million.

With that, nine casinos now call Atlantic City home. The news of the sale of Ocean Resort has revived concerns that AC is making the same mistake that eventually led to the casino contraction in 2010.

Is the former Revel a cursed property?

The $2.4 billion casino is the largest property in Atlantic City, but its history is one of ownership changes, new names and bad memories.

Its initial incarnation as Revel lasted barely two years before closing in 2014. It was the cherry on top of a long list of closed casinos in New Jersey at that time.

Owner Glenn Straub took the reins of the casino and turned it into TEN. But after months of broken promises and missed opening dates, TEN never happened.

When Deifik bought the casino from Straub in early 2018, the hope was that the casino would find its footing. In fact, Deifik took over the property with far less debt than what sank the Revel.

For now, Ocean Resort looks to the future with a new owner on tap.

Six Months In: Ocean Resort, Hard Rock AC Still Growing With Plenty Of Room For Optimism

After six months of life on the Boardwalk, Atlantic City’s two newest casinos, Ocean Resort and Hard Rock, are staying positive about the future.

A common word thrown around by Bruce Deifik is “renaissance.”

The Ocean Resort Casino owner, though, does not use that word lightly. He believed Atlantic City was on the threshold of rebirth.

His property, along with Hard Rock Atlantic City, both of which opened June 28, was expected to be the catalyst for the city’s return to prominence.

Now, six months after the two properties opened to the public, Deifik has not wavered from that frequently used word.

“Looking back, I felt that Atlantic City was going through a renaissance,” Deifik said in a phone interview.

“I believe, absolutely, that that is continuing in a very strong way, that there’s a very good foundation that’s being built under our feet in Atlantic City, and that the future looks very, very bright.”

Certainly, both Ocean Resort and Hard Rock AC remain in their infancy.

But both have enjoyed revenue upticks since activating amenities such as NJ online gambling, and, in the case of Ocean Resort, NJ sports betting. (Hard Rock expects to join the wagering industry within the first quarter of 2019.)

Yet while the industry as a whole continues to reach unprecedented levels of success, Ocean Resort and Hard Rock remain far behind in terms of revenue.

Of course, there is always room for improvement. Yet neither property is concerned about its standing and current state.

Atlantic City on the rise

It has been some time since Atlantic City had the spotlight. The advent of sports betting surely infused some hype. And that industry has made its fair share of contributions.

Sports betting and an eye-opening upturn in NJ online casinos — which accounted for the majority of a state-record $26.9 million in November, the fourth month this calendar year in which revenue records were set — have indeed led to a renaissance in Atlantic City.

According to the New Jersey Division of Gaming Enforcement, spending and gambling revenue is on pace to eclipse last year’s figures. In the third quarter, net revenue industry-wide reflected a 17.8 percent increase (although gross profits represented a 15.3 percent decrease year-over-year).

And November marked the sixth straight month, and the seventh overall, in which total gaming revenue for Atlantic City casinos showed a year-over-year spike.

“The opening of two new casinos in late June plus the advent of sports betting at the same time explains the surge in net revenues in the third quarter and increase in total industry gross gaming win through October,” analyst Tony Marino told the Press of Atlantic City. “The publicity and media interest accompanying the new casinos and the long-anticipated legalization of sports betting was intense and came at the perfect time — the beginning of Atlantic City’s historically robust summer season. In other words, the timing could not have been better.”

Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University, also spoke with the Press of Atlantic City:

“Sustained growth in the lodging segment demonstrates the resilience of Atlantic City as it continues its transformation from a gaming-centric market to a multifaceted destination resort on the East Coast.”

Consider, though, that this year’s monthly numbers, at least since July, compare to a time when Atlantic City was lined with seven casinos rather than nine.

And on an individual-casino basis, the newcomers have some catching up to do.

Ocean Resort, Hard Rock behind but thriving

Naturally, both new Atlantic City casinos were behind the eight ball upon opening.

Since rolling out their respective online casinos — Hard Rock in June and Ocean Resort the following month — both platforms have gradually upped revenue each month.

From its first full month of online casino operations, Hard Rock has gone from a $329,650 month in July to $1,314,597 last month. Ocean Resort has also grown, though not as exponentially: $249,805 in July (not a full month) to $731,887 in November.

Granted, month-to-month revenue reports vary and fluctuate.

Yet in that same span, while Ocean Resort and Hard Rock have increased revenue each month, most others have seen dips in profit. Perhaps this is an example of the two new properties gaining customers. Though that is speculative.

Pandit told the Press of Atlantic City that three months worth of data is not sufficient to draw solid conclusions.

He added, however:

“But, if Atlantic City’s past history has taught us to be realistic, we should anticipate that total year round demand may not be sufficient to keep all nine casinos profitable by 2020 and beyond. Without major infrastructure changes and effective marketing programs, another round of right-sizing the casino industry is likely in Atlantic City’s future.”

Ocean Resort owner not concerned

Ocean Resort and Hard Rock NJ gambling sites remain far behind the competition. Golden Nugget online casino has hovered around $9 million per month since July, while most others remain in the $3 million-to-$4 million range.

Even so, while some experts believe nine casinos cannot successfully operate simultaneously, Deifik does not share similar worry.

“We’re very pleased — my wife, my kids, myself, our executives,” Deifik said. “We think we get better every day. We’re making good decisions every day. We have great partners. I couldn’t be happier. If you would have asked me June 28, when we opened, ‘Where would you like to be toward the end of the year?’ I’m pleased where we’re at.

“It’s amazing. You see the town getting better every day. You see the small business owner getting better every day and coming back to life. … It’s a great thing to see that things are getting cleaned up.”

Success about more than just casino

There’s another phrase Deifik likes to use:

“We could not be happier.”

Since opening, the owner said, Ocean Resort has operated at about 84 percent occupancy, second only to Borgata. That gap will narrow further, Deifik noted, when another 2,000 rooms are completed at Ocean Resort.

Hotel operations have run relatively smoothly, Deifik said, emphasizing the success of group and convention at the resort. The casino features more than a dozen food and beverage options and non-gaming amenities such as Topgolf.

Pandit told the Press of Atlantic City that both Ocean Resort and Hard Rock are “finding a niche within non-gaming market segments” while filling up their calendars with live music and comedy acts, among other things. (Hard Rock did not respond to interview requests.)

In Las Vegas, Pandit mentioned, casino hotels generate more revenue from those non-gaming activities. He said Atlantic City properties should emphasize the same in order to survive.

Deifik has begun such a model.

“Las Vegas should be very proud with the way they’ve done things,” Deifik said. “I’m a student of that town for 30 years, basically. … I’ve watched and I’ve looked. We could do worse things than to emulate, to a certain extent, what they do in Las Vegas as far as group and convention and filling up your properties all the time every day. That’s a great thing.

“I think that you always follow people when they make great decisions. And Las Vegas has absolutely created a wonderful model; it’s a wonderful place.”

While some experts may appear concerned, or at least wary of, casino cannibalism, Deifik (and surely Hard Rock executives) perceive an influx in visitation in the near future.

The Ocean Resort owner says that 24.5 million people flock to Atlantic City annually. If that number reaches 30 million visitors, all nine properties should not only thrive but also grow.

Said Deifik:

“I think Atlantic City has that opportunity. I think we’re heading slowly in a direction where people say, ‘You know what? Let’s go there.'”

NJ Online Gambling Sets Another Revenue Record, Edges Close To $27 Million

New Jersey online casinos carried internet gaming revenue to record-setting territory of while NJ online poker continues to struggle.

The New Jersey online gaming market entered record territory — again. When 2018 is over, it may very well be known as the year NJ online gambling kept one-upping itself.

Not surprisingly, it is the online casinos that carried internet gaming to produce the record-setting revenue while online poker continues to head in the wrong direction.

According to the latest revenue report from the NJ Division of Gaming Enforcement, Atlantic City casinos brought in $26.9 million from its online activity in November 2018.

November’s figure represents an impressive 30.7 percent increase over November 2017. It is, however, only a modest gain from October 2018, which brought in $ 26.7 million.

Specifically, the casinos brought in $25.4 million, good for a 35 percent increase year over year.

Poker made up the difference with revenue of $1.5 million for the month. Compared to November 2017, its revenue decreased by 13.7 percent.

The highs and the lows of NJ online gambling

Even though all operators posted gains this month, Golden Nugget continues to carry the industry.

In fact, it keeps knocking on the door to reach $10 million. It has been north of $9 million in revenue four times this year. It did, however, take a slight step backward in November to $9.2 million.

While that figure is good for a massive 48.7 percent increase year over year, it did slip slightly from its October revenue of $9.7 million.

On the flip side is Resorts. It earned $3.6 million for November, representing a meager 1.3 percent year-over-year increase.

While Golden Nugget had a slight decrease in month-over-month revenue, Resorts was able to show a modest gain of 5.8 percent.

Hard Rock and Ocean Resort still climbing

Hard Rock Atlantic City and Ocean Resort Casino continue to grow. In the five full months of operation, both NJ online casinos have seen a triple-digit percentage growth from their first month to now.

For November, Hard Rock posted $1.3 million in revenue, its second seven-figure month in a row. That figure represents a 33.6 percent increase over October when normalized for the additional day.

Ocean Online Casino may not be growing as fast as Hard Rock online casino, but it posted an impressive 27.1 percent month-over-month increase with a November revenue figure of $731,887.

And then there’s the rest

Borgata once again sits solidly in second place behind Golden Nugget. It looked like Caesars was trying to make a run for Borgata’s position, but it took a few steps back during the last few months.

Borgata contributed $4.87 million to the overall online gaming revenue picture. That is a healthy 12.4 percent increase over last year’s number and 13.5 percent over last month’s.

Caesars after breaking into the $4-million club in September, brought in $3.9 million. It improved its November 2017 performance by 16.9 percent. At the same time, it only posted a slight gain of 3.8 percent compared to last month.

Besides Golden Nugget, Tropicana is the only NJ online casino to post a decline in November revenue when compared to October.

This month, Tropicana earned $3.4 million, a 5.4 percent decline from October’s figure of $ 3.7 million when normalized for the extra day. On the other hand, Tropicana did grow by four percent year over year.

NJ gaming, as a whole, also soared

NJ online gambling isn’t the only market posting stellar numbers.

The New Jersey gaming industry keeps proving its strength with solid overall revenue numbers.

In November, total gaming revenue was $257.4 million, a 24.7 percent increase from the same period last year.

Total gaming revenue for NJ includes:

  • Land-based casinos ($209.2 million, +12.6 percent)
  • Online gambling ($26.9 million, +30.7 percent)
  • Sports betting ($21.2 million)

Year-to-date, the NJ gaming industry brought in $2.645 billion.

That is a nearly eight percent increase when comparing it to the $2.452 billion from the same period in 2017. And we aren’t even done with 2018 yet.

While NJ sports betting is the talk of the town, it is hard to overlook the more than 30 percent growth of NJ online casinos and the strength of the industry as a whole.

Atlantic City Banks On NJ Sports Betting To Help Boost A Revitalized Market

To hear it from Ocean Resort’s owner Bruce Deifik and industry experts, Atlantic City casinos have high hopes from NJ sports betting at all levels.

The calendar has not flipped even a year, yet already Atlantic City appears in full thrust toward revitalization.

That’s a word that has been thrown out quite a bit over the past nine months or so: revitalization. Along with rejuvenation. Or renaissance.

That was the intended goal. Especially for two casinos that, before winter began to thaw, had plans to open along the Boardwalk.

As the incoming resorts prepared to replace two defunct properties, Hard Rock Atlantic City and Ocean Resort Casino possessed relatively unselfish mindsets.

Their respective openings, both incidentally occurring on the same day and within the same hour in June, were not for themselves. They were part of the rebirth of Atlantic City. The debuts of each property synced nearly perfectly with the launch of NJ sports betting.

And this new industry has tied Atlantic City casinos old and new as the seemingly once-hopeless city begins to rise from the ashes and establish itself once more as a tourist destination.

A ‘new era’ dawns on the shore

For months anticipation built for the openings of Hard Rock and Ocean Resort: Two sparkling new gems added to a crown that appeared to be rusting.

That is not hyperbole.

Atlantic City Mayor Frank Gilliam dubbed opening day a “new era” for the Boardwalk. Hard Rock International chairman Jim Allen predicted “a new renaissance” arriving in Atlantic City. And his property would represent “the bridge to a revitalization” in the area.

“We believe in Atlantic City,” Allen said, “we believe in the state of New Jersey, and we truly believe Atlantic City’s best days are in front of it.”

Just two weeks prior to the openings of Hard Rock and Ocean Resort, Gov. Phil Murphy finalized the legalization of sports betting in New Jersey. And since that game-changing June, Atlantic City, it appears, is rising back to prominence.

“I think it’s early, but if you saw, tourism numbers are up,” Ocean Resort owner Bruce Deifik said in a phone interview. “Slightly, but my attitude is that it’s amazing to me.

“Las Vegas gets 43.5 million tourists per year; Atlantic City gets 24.5 million tourists a year, and we have a beach boardwalk and an ocean. What would it take for us to get that to 30 million visitors a year? Easy to get here, easy to drive here, expand operations in and around Atlantic City International airport and great options for restaurants and entertainment and rooms and very affordable for families with children and millenials. I believe Atlantic City is going through a renaissance in front of our eyes. It’s creating a very solid foundation.”

NJ sports betting part of that foundation

Though still early, Deifik conceded, Ocean Resort — a microcosm of Atlantic City — has started to build “a very, very good book of grouping convention. We’re excited about that.”

Part of that swell in visitors lies with the brand-new resort. Part of it is due to the Ocean Resort sportsbook. The expansive William Hill Sports Book at Ocean Resort is a sight to behold.

Sports betting draws a certain set of patrons. They, in turn, bring family and friends who explore other areas of the property and Atlantic City. That is the foundation for the revitalization of the city.

“I think sports betting is going to be significant in terms of an overall setting-the-stage for a destination,” said Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University.

“It provides Atlantic City yet another market segment with a completely different segment of revenue. That’s not just from the sports betting itself. But because sports betting is primarily a social activity, in addition, it generates lodging and food and beverage and entertainment. There’s a multi-faceted impact off sports betting to the Atlantic City area.”

Industry already helping that base

Deifik does not hesitate at the question.

“If the question is, with a fully activated sportsbook, does it have a dramatic impact on the property? The answer’s absolutely yes, unequivocally yes,” he said. “Sports betting is a social function, for people to get together … and congregate and spend time and have a beer and bet on your team and bet on the team you grew up watching or your alma mater. It’s different. Not everybody gets to go to a stadium and not everybody wants to go to a stadium to watch a game.

“This is an opportunity where you can watch your own team along with a lot of other games and a lot of other teams, and you’re in an environment where you’re high-fiving with people. From that standpoint, it’s extremely good for the property. It’s great for the casino floor because it creates really good energy.”

Certainly, the bottom line is cause for celebration.

Accepted wagers in September, for example, reached $184 million, resulting in $24 million in revenue. That news came after New Jersey reported nearly $153 million in handle and $16 million in revenue over the first three months combined.

To boot, NJ online gambling reported $25.8 million in revenue for the second-best month in the five-year history of the industry. In a statement, NJ Division of Gaming Enforcement director David Rebuck cited sports betting as a key factor.

“Driven by the explosive growth in sports wagering and continuing improvements in Internet gaming and brick-and-mortar casino win results,” Rebuck said, “the gaming industry produced another month of superb revenue increases. The revenue results point to a strong finish for New Jersey’s gaming industry in 2018.”

NJ sports betting is an ‘important piece’ to Atlantic City

Thus, Deifik — certainly along with other property owners and operators — boast a rosy outlook for Atlantic City. The Boardwalk has already begun the first stages of a renaissance. And soon, perhaps, the AC will return to its former glory.

Deifik is sure of it. And sports betting plays a major factor.

“It’s a really great amenity (sports betting), and I think it gives people a reason to come to Atlantic City and stay in the region versus getting on a plane and going somewhere else,” Deifik said. “I think that’s a very, very important piece of what we all should talk about here. March Madness, when it comes up, the Super Bowl, just thousands and thousands of people go to other places, like Las Vegas.

“I think now’s an opportunity for people to come to Atlantic City, go to the hotels, have great options as far as food and beverage and entertainment, and get to watch the game in really well-done sportsbooks. I think ours rivals anything that’s in Las Vegas. We’re very, very excited about that.”