Hedge fund Purchasing Bulk stake in Atlantic City’s Ocean Resort Casino

In New Jersey, the businessman behind the struggling Ocean Resort Casino has reportedly inked a deal that is to involve a majority stake in the giant Atlantic City property being offloaded to a private equity firm so long as the state gaming regulator approves.

Changing hands:

According to a Tuesday report from The Press of Atlantic City newspaper, real estate developer, Bruce Deifik, signed an agreement earlier this month that will see New York City-headquartered, Luxor Capital Group, become the controlling stakeholder in the seaside venue and take over its gaming license.

Disappointing performance:

The newspaper reported that Colorado-based Deifik obtained some $229 million in financing from Luxor Capital Group Incorporated and JP Morgan Chase and Company exactly a year ago in order to buy the then-shuttered Revel Casino Hotel, which opened in 2012 at a cost of $2.4 billion before being closed only two years later, via an entity known as AC Ocean Walk. The Boardwalk property was subsequently re-launched in late-June as the Ocean Resort Casino but has since purportedly been unable to capture a significant share of Atlantic City’s nine-casino market.

Loan authority:

The Press of Atlantic City reported that Luxor may be using the $122.5 million bridge loan it granted Deifik in 2018 in order to obtain its majority stake as the businessman is thought to have already paid off his initial debt with JP Morgan Chase and Company in June.

Further investment:

In exchange for its majority claim on the Ocean Resort Casino, the newspaper reported that Luxor has pledged to invest up to $70 million into the facility and deliver ‘a substantial increase’ to its annual entertainments program. It divulged that this cash, which could begin appearing as soon as next month, is to be utilized to premiere a new buffet alongside more suites, rooms and casino floor innovations.

Frank Leone, Chief Executive Officer for Ocean Resort Casino, to The Press of Atlantic City…

“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.”