Ilitch Holdings, the Little Caesars’ parent company, is the current owner of the Atlantic City gaming industry.
On Thursday, the New Jersey Casino Control Commission (CCC) approved Ilitch Holdings to acquire up to 50% ownership in Ocean Casino Resort. Ocean Casino and Ilitch majority owner Luxor Capital revealed their intentions to become partners in April.
Ilitch Holding is paying $175 million for its part of the Ocean. Representatives from Luxor and Ilitch said $70 million would be spent to complete 464 hotel rooms that were never finished when the prominent blue Boardwalk structure opened as Revel in 2012.
Follow CCC approval, Ilitch and Luxor are required to close on the transaction within 30 days. The gaming agency on Thursday also extended Ilitch a temporary casino license. That is an essential condition of the acquisition, as Ilitch will become a great stakeholder after the sale competition.
Little Caesars was founded by Marian and Mike in 1959. The third-biggest pizza chain in the world, the franchise generated substantial wealth to Ilitch. The Ilitch family, worth some $4.4 billion, currently owns the NHL Detroit Red Wings and MLB Detroit Tiger, and the Motorcity Casino Hotel in downtown Detroit.
Painful past
Ocean Casino opened as Revel in 2012. The integrated resort cost $2.4 billion to build, though there was a financial disaster from its opening. Revel could not generate sufficient revenue to cover its loan nearly immediately after the firm slot machine was turned on.
Moody’s and Standard and Poor’s degraded Revel’s credit rating to levels that showed the casino would only be able to pay back its debts upon favorable financial, business, and economic conditions.
In 2012-2013, Atlantic city did not present such circumstances, and Revel filed for bankruptcy and closed on September 2, 2014. Glenn Straub, a Florida businessman, bought Revel in bankruptcy for only $82 million.
Straub created several redevelopments plans for the former casino. However, his controversial relationship with Atlantic City executives, which broke in 2015 when he said that New Jersey business owners “have to take all their clothes off” since the state doesn’t “know how to rape you,” led to Revel remaining unoccupied.
Straub sold the obsolete casino resort to Colorado-based real estate developer Bruce Deifik in 2018 for $200 million. Deifik, who bought the facility without seeing it personally, reopened it as Ocean Resort Casino on June 27, 2018, the same day the longtime Trump Taj Mahal reopened Hard Rock Atlantic City.
Unfortunately, Deifik’s Ocean found a similar fate as Revel. Unable to make good use of his debts, Deifik was pushed to hand over Ocean Resort Casino, since renamed as Ocean Casino Resort, to his primary lender, Luxor Capital, in early 2019.
Booming future
Luxor brought in gaming industry expert Terry Glebocki to assist in reversing Ocean’s wealth. After losing $2.5 million operating through the first 2019 three quarters, under her leadership as CEO, which started in December of 2019, Ocean turned profitable.
The casino generated a running profit of $21.9 million in 2020, the top performance of the nine casinos in Atlantic City. This week Glebocki shocked the industry and Ilitch and Luxor officials by announcing her resignation. No statement has been given for her departure, though Luxor thanked her for leading the casino through a most challenging period.
A company statement read,
“Terry joined Ocean on the brink of bankruptcy, and leaving the property as a leading casino resort in Atlantic City.”
Luxor principal Michael Conboy during the CCC meeting, explained that a temporary CEO would be named soon while a search for a permanent CEO is carried out.
Last Updated on by Ryan
