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Ocean Resort Casino’s New Owner Files Gaming License Petition

Luxor Capital Group has filed interim license petition, seeking authorization to enter Atlantic City’s casino market

Luxor Capital Group, a New York-based hedge fund that agreed recently to buy Atlantic City’s Ocean Resort Casino, has filed a petition with New Jersey gambling regulators, seeking interim authorization to run the property.

Ocean Resort Casino opened doors last June at the site of the former $2.4 billion Revel Casino Hotel. Revel was shuttered in the summer of 2014, just two and a half years after its original opening as it failed to earn a profit.

Florida businessman Glenn Straub bought the property in 2015, pitching an ambitious plan to reopen it and turn it into a popular Boardwalk hotspot. That never happened and Mr. Straub eventually passed the unfortunate resort onto Colorado investor Bruce Deifik.

Mr. Deifik purchased the former Revel early in 2018 for $229 million. He funded the acquisition with two bridge loans – a $110 million one from J.P. Morgan and a $122.5 million one from Luxor. Mr. Deifik repaid the J.P. Morgan loan in June with a second, $175 million loan.

As mentioned earlier, Ocean Resort Casino swung its doors open in June but never managed to gain momentum in the vibrant Atlantic City casino market, its revenue lagging behind that of its competitors. Reports surfaced last year that Mr. Deifik was looking for buyers for the property. The businessman confirmed early in January that another entity would assume control of the Boardwalk resort but refused to reveal its identity.

Following weeks of speculations, Mr. Deifik and Luxor announced earlier this week that the latter would purchase a controlling interest in the property, while the Colorado investor would retain a small non-controlling interest.

Casino License

Under the state’s gambling laws, Ocean Resort Casino’s new owner will need to obtain a casino license in order to be allowed to run the property. The Press of Atlantic City reported Wednesday that the New York hedge fund submitted a petition for an interim casino license on January 28.

The interim authorization will allow Luxor to operate the property after an initial investigation conducted by the New Jersey Division of Gaming Enforcement and approval by the state’s Casino Control Commission.

An additional, more thorough, review of Luxor and its eligibility to enter Atlantic City’s casino market as a Boardwalk resort owner will then be conducted. The Division of Gaming Enforcement will have 90 days to complete that review and to submit a report with its findings to the Casino Control Commission. The latter will then schedule a hearing within 30 days after the report was submitted to determine whether to issue a permanent license to Luxor.

Once the interim authorization is granted to the hedge fund, it will form a trust that will hold shares of the parent company of Ocean Resort Casino. The trust will be overseen by a trustee. In its recent petition to New Jersey gambling regulators, Luxor named Eric J. Matejevich as the future trustee. Mr. Matejevich had at one point served as Chief Operating Officer of the now shuttered Atlantic Club Casino.

Announcing the acquisition of Ocean Resort Casino, Luxor also revealed that it would invest $70 million into opening a buffet at the resort, finish its uncompleted 10 floors that would add 600 rooms to the 1,399 currently available, and would upgrade further the casino floor.

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The post Ocean Resort Casino’s New Owner Files Gaming License Petition appeared first on Casino News Daily.

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February 2019
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