Frank Leone Casino
30-second summary
- Ocean Resort Casino is now majority-owned by Luxor Capital Group
- Former owner Bruce Deifik maintains his minority share
- Revel was purchased in January 2018 by Deifik for $229m (£174.2m) with financing from Luxor and J.P. Morgan Chase
- Luxor commits $70m (£53.3m) in new strategic capital to the resort
The executives were let go this week as part of what seems to be a restructuring process after a change in ownership. US.- Ocean Resort Casino’s former CEO Frank Leone and Alan Greenstein, now ex-chief financial officer, were let go from the company on Monday in what is expected to be a full restructuring process for the facility that recently changed ownership. ATLANTIC CITY, N.J. (AP) — A New York hedge fund that lent money to Atlantic City's Ocean Resort Casino is assuming ownership of it. Luxor Capital Group was identified as the new owner in a press release Monday from the casino. The company, which is not related to the Luxor casino in Las Vegas, will take over the ownership interest of Bruce Deifik (DIE'-fick) and his family.
In early 2019, the owner of the Ocean Resort Casino in Atlantic City announced that the property would be changing hands. Bruce Deifik is a real estate developer who purchased the property in 2018. The former principal owner of the Ocean Resort will no longer have the majority stake in the property. The new majority stakeholder has now been revealed as the Luxor Capital Group.
New Owner
The Luxor Capital Group is a private investment firm based in New York State. The company has been involved with the Ocean Resort Casino since Deifik made the purchase. Formerly known as the Revel Casino Hotel, the property was purchased by Deifik in January of last year for $229m.
Deifik received financing for the purchase from Luxor Capital Group and J.P. Morgan Chase. Two bridge loans were provided. J.P. Morgan Chase provided $110m (£83.7m) and Luxor supplied $122.5m (£93.2m). Luxor Capital will now assume control once given interim authority to own a casino venue. Since approval can take time, a trust will be created for the temporary ownership of the property.
The CEO of Ocean Resort Casino, Frank Leone, said: “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.”
Continued Investment
When Deifik purchased the casino property, he quickly began renovating and making additions. He bought it in January 2018 and it was open by June. An indoor golf facility was added at the time and sports betting was added this year, offering one of the most extensive options for wagering in the state. The casino floor was reconfigured during the renovations as well.
The new owner, Luxor Capital, plans to use $70m (£53.3m) as strategic capital. A buffet, along with more suites and rooms, will be added to the property with the investment. The casino floor will also be improved. Luxor also has plans to make a substantial increase in entertainment options and player events this year.
The investment should close early next month if the regulatory approvals and final documentation come through. The proposal would help fund the projects for this year and provide the casino with more financial flexibility. After the investment is approved, Luxor will begin the licensing process via the New Jersey Division of Gaming Enforcement.
The news of Ocean Resort Casinoswitching 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 YorkCity 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
Frank Leone Casino Exec
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.”
Frank Leone Mount Airy Casino
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 Cityofficials 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 Entertainment, MGM 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.