A perennially challenged Atlantic City casino will finally turn a profit this month and chart the way forward under the ownership of a New York hedge fund.
The Ocean Casino Resort, which until a few weeks ago was known as the Ocean Resort Casino , has greatly reduced its debt and will return to profitability in May, according to Eric Matejevich, the interim CEO managing the oceanfront property while an ownership transfer takes place.
The property, which opened in 2012 as Revel and closed two years later, is in the process of changing hands yet again. It is being transferred from the late Bruce Deifik, the Colorado developer who died in a car crash last month, to hedge fund Luxor Capital, who had agreed to take over and invest $70 million into the property as Deifik ran out of money to operate it. The deal could close sometime in June.
Of the $70 million Luxor pumped into the property earlier this year, $50 million went to pay down debt, leaving it with a greatly improved balance sheet, Matejevich told The Associated Press.
That encouraged David Schwartz, a gambling expert at the University of Nevada Las Vegas.
“Reducing the debt load will ease a great deal of pressure, making it easier for the property to invest in facilities and promotions that will draw customers,” he said. “Oftentimes, putting a casino on a more solid financial footing can make a big difference.”
The resort had begun to run out of money in September, prompting Deifik to relinquish ownership in January, after just six months.
The immediate priority was to stop the bleeding; the property had been losing money every month since September, and had fallen below state-mandated liquidity requirements.
“In a lot of ways, we’re going faster than we had imagined we could,” Matejevich said. “We’ve largely eliminated losses at the property and we are making a major effort to reintroduce this place to people.”
It’s a small sample size, but encouraging nonetheless: the casino won more from customers at slot machines this April than in any previous month, and recorded its second-highest hotel occupancy rate. The exact numbers will be released by state regulators later this month. MDT/AP
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