In New Jersey, the state gaming regulator has reportedly consented to a complex agreement that is to eventually see a private equity fund assume a majority stake in Atlantic City’s struggling Ocean Resort Casino.
According to a Thursday report from The Press of Atlantic City newspaper, the three-member New Jersey Casino Control Commission approved the deal on Wednesday afternoon to give New York City-headquartered Luxor Capital Group the ability to increase its holding in an entity known as AC Ocean Walk, which is responsible for Ocean Resort Casino, from 34% to 83%.
The newspaper reported that the intricate arrangement approved by the eastern state’s gaming regulator has entailed the former Chief Operating Officer for the now-shuttered Atlantic Club Casino Hotel, Eric Matejevich, being designated as the principal trustee for Ocean Resort Casino. It explained that this state of affairs has been designed as a way to keep the Boardwalk casino open while Luxor Capital Group applies for an interim casino license, which is a process that could take up to 120 days.
This licensing process is to entail an around 90-day investigation of Luxor by the New Jersey Division of Gaming Enforcement alongside an up to month-long wait in order to give the New Jersey Casino Control Commission time to set a final approval hearing. Once its temporary consent has been granted, the new majority owner will purportedly be required to embark on the more lengthy and intensive route to being given a full casino license.
In agreeing to the temporary ownership change, the regulator reportedly mandated that Ocean Resort Casino must now abide by 26 stipulations that include a requirement that it maintain a daily operating cash balance of at least $10 million. In addition, the 20-acre property is purportedly obliged to hold a minimum casino bankroll of $11 million alongside having access to at least $15 million in debt services.
Riders were inserted after it emerged that AC Ocean Walk had successfully sought relief from a similar $31 million aggregated requirement in October only to fall foul of the newly-lowered obligation less than a month later. As part of Wednesday’s approval, Ocean Resort Casino is now purportedly moreover expected to immediately notify the New Jersey Casino Control Commission if it cannot meet any part of the new $36 million combined threshold.
Ocean Resort Casino opened on the site of the former Revel Casino Hotel in late-June after AC Ocean Walk, which had been majority-owned by Colorado-based real estate developer Bruce Deifik, paid approximately $229 million to buy the then-shuttered property. However, the 1,399-room venue has since purportedly been unable to capture a significant share of Atlantic City’s nine-casino market and currently sits red to the tune of around $22.7 million.