An entrepreneurial Detroit family that owns the Little Caesars pizza chain as well as a casino in the Motor City plans to acquire up to 50% ownership in the Ocean Casino Resort in Atlantic City, the seaside New Jersey gambling mecca that’s the nation’s second biggest gaming market.
Luxor Capital Group, a New York City hedge fund and the primary owner of the casino hotel at 500 Boardwalk, said it is “pursuing a partnership” with the Ilitch organization, a business dynasty that owns the Detroit Tigers baseball team, the Detroit Red Wings hockey team, the pizza restaurants and the MotorCity Casino Hotel.
Subject to regulatory approvals and final closing conditions, the Ilitch organization would own, through an affiliate, up to 50% of Ocean, with Luxor retaining the rest, the hedge fund said in a statement Tuesday. Terms of the deal weren’t disclosed.
Ilitch entering the Atlantic City market would be the latest twist in the ever-evolving tale of the Ocean Casino, which has undergone several ownership changes. The property debuted with a splash as the $2.4 billion Revel in April 2012, but soon struggled and was among a handful of Atlantic City casinos that closed in 2014. Straub Capital and developer Glenn Straub of West Palm Beach, Florida, acquired the hotel-casino in 2015 for $82 million.
Another investor from outside the Garden State, Denver developer Bruce Deifik, bought the property from them for $200 million in January 2018, and he reopened it that year in June. But the casino still struggled, and in January 2019 Luxor, one of the casino’s lenders, agreed to purchase it. Deifik died in a car accident at age 64 in Denver in April 2019.
In its statement, Luxor said if the deal is approved it “will give Ocean access to growth capital” and provide a strategic partner.
Ilitch Holdings owns the MotorCity Casino Hotel in Detroit. (CoStar)
“We look forward to continuing to grow Ocean in partnership with the Ilitch organization for years to come,” Luxor said.
Located on 20 beachfront acres, the Ocean Casino has 1,400 guest rooms and suites; 138,000 square feet of gaming space with 1,937 slot machines and 125 gaming tables; 160,000 square feet of meeting and convention space; four upscale dining restaurants and 11 casual-dining options; a 40,000-square-foot spa; and a 5,000-seat concert venue.
Atlantic City was in the midst of an economic comeback last year when the pandemic struck, forcing casinos to temporarily close. During the third quarter last year, net gaming revenue was $629.3 million, reflecting a 32.3% drop from the prior year, according to the state Division of Gaming Enforcement. Casinos have reopened with COVID-19 restrictions, like limited capacity, in place. Atlantic City is the nation’s second-biggest casino market, behind No. 1 Las Vegas.
The Ilitch organization didn’t immediately respond to an email seeking comment Wednesday.
But Luxor’s statement said the Detroit business “recognizes the success that the team at Ocean has achieved over the past two years and looks forward to working with the Ocean team and building on their accomplishments through continued investment in both the property and the customer experience.”
According to Luxor, “This joint endeavor will bring to Atlantic City the extensive experience that the Ilitch organization has in the gaming industry through MotorCity Casino Hotel, Detroit’s only locally owned and operated casino.”
The Ilitch companies also “represent leading brands in the food, sports and entertainment and real estate development industries and employ tens of thousands of people worldwide,” according to Luxor.
The hedge fund said it will share more details about the deal once all regulatory processes are complete.
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