The parent company of the Little Caesars pizza chain is taking a substantial ownership position in Ocean Casino Resort in Atlantic City, NJ.
Ilitch Holdings, Inc. has entered into an agreement with Luxor Capital Group LP to acquire as much as a 50 percent stake in the Boardwalk casino. The Associated Press first broke the acquisition news.
Luxor Capital took control of the long-troubled resort in January of 2019 from real estate developer Bruce Deifik after he ran into financial problems. Deifik died in a car accident three months later. Luxor, a New York-based private investment management firm, confirmed the news that the Ilitch family is coming on board.
Terms of the deal were not disclosed. The AP reports that Ilitch Holdings has already applied with the New Jersey Division of Gaming Enforcement for interim approval to be a major stakeholder in a casino.
Ilitch Casino Itch
Ilitch Holdings is the business empire of the late billionaire Mike Ilitch, who died in 2017. Along with his wife Marian, Ilitch founded in Michigan what would become Little Caesars in 1959.
Today, Little Caesars is the third-largest pizza chain in the world. The company made Mike and Marian Ilitch billionaires many times over, which allowed them to expand their holdings.
The Ilitch family portfolio includes the MLB Detroit Tigers and NHL Detroit Red Wings professional sports franchises, as well as the MotorCity Casino Hotel in downtown Detroit. Should regulators in New Jersey find Ilitch leaders suitable to own a casino in Atlantic City, Ocean would become the family’s second casino property.
The Ilitch family has owned MotorCity since 2005.
Ocean Making Waves, But Past Haunts
Ocean Casino opened in 2012 as Revel at a cost of $2.4 billion. The integrated casino resort on the Boardwalk’s northern end immediately struggled. It fell into bankruptcy and closed less than two years later.
Florida real estate developer Glenn Straub acquired the property for just $82 million in 2015. He floated various plans for the resort, but never reopened it. He sold to Deifik in 2018 for $200 million.
Since rebranding and reopening as Ocean in the summer of 2018, the casino has showed signs of life. Gross operating profits were in the black and headed in the right direction prior to the pandemic’s onset.
Ocean ranked No. 6 of Atlantic City’s nine casinos last year, the resort winning $214.1 million from gamblers. For the first nine months of 2020, Ocean reported a gross operating profit of more than $12 million. Final quarter data has yet to be released.
Despite its recent good fortunes, some in town believe the Ocean property to be cursed. In July 2008, after Deifik’s death and prior to Revel’s opening, a private plane crash killed six executives behind the development. That same month, a fire broke out on the casino site and injured a worker.
In April of 2013, two hotel guests were found dead of drug overdoses. The most notorious incident was in February of 2014, when then-NFL star Ray Rice was captured on surveillance video punching his fiancé out cold. The incident effectively ended the running back’s career.
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