Ocean Casino Resort in Atlantic City has had a rough go for the past few years. This casino has struggled to generate revenue and is now handing over the keys. This week, the hedge-fund owners were granted official permission to begin operating this casino.
It’s great news for Ocean Casino. Hope is that Luxor Capital Group can begin to turn things around for this gambling establishment. Let’s take a look at what’s happening here.
Atlantic City Revenue Continues to Surge in 2019
Just a decade ago, it looked as if Atlantic City was in danger of failing. The recession had severely impacted the city’s revenue, as almost nobody was choosing to gamble inside casinos. Over the past year, things have taken a major turn.
Revenue in this city has increased for the past 13 months. In June, casino revenue here rose by an incredible 20% compared to the same time the year prior. The Division of Gambling Enforcement reports that casinos here generated $278.14 million in June.
There are a number of reasons why this industry is surging. In May of 2018, New Jersey became the first state outside of Nevada to legalize sports betting. It helped to breathe new life into the state’s gambling industry, bringing in millions of people from around the East Coast to make sports wagers and play inside the casinos.
In June of 2018, two major casinos began operating here, as well. Ocean Casino Resort and Hard Rock Hotel & Casino Atlantic City opened their doors, expanding the city’s total number of casinos to nine. Unfortunately, Ocean Casino has had a hard time bringing in players.
Luxor Capital Group Takes Control of Ocean Casino Resort
As we mentioned earlier, this casino has struggled to generate revenue since opening its doors. It’s one of the lowest-earning casinos in Atlantic City, partly due to its location in the North Beach section of the city. In early June, Ocean Casino, along with two other casinos in North Beach decided to team up to promote this area as a way to increase the casino’s presence.
Things didn’t improve. Reports indicate that the casino has lost nearly $27 million over the past seven months. Now, the casino is being taken over by Luxor Capital Group. The New York-based investment firm has invested nearly $70 million into this casino, $50 million of which was used to pay down debt owed to J.P. Morgan, a secondary lender to the casino.
The NJ Casino Control Commission has officially granted Luxor Capital Group interim authorization to take over the casino’s operations. This authorization comes with several financial conditions overseen by the Division of Gaming Enforcement. Now, a more thorough review will take place before this firm is granted an official New Jersey casino license.
James Plousis, chairman of the Casino Control Commission, is happy to see Luxor take control over the casino.
“We are all acutely aware of this property’s past struggles — in fact, there were real questions as to whether this asset would ever be operational again,” he said. “Acknowledging that it was not its original intention, I, for one, am pleased that Luxor has taken an ‘all in’ approach to its investment in (Ocean). … By all accounts, it appears that (Ocean) is competitive and positioned to generate positive cash flow.”
Online Casino Gambling Growing More Popular in Atlantic City
Most agree that Atlantic City is one of the hottest new gaming markets in the United States. Reports indicate that this city’s gambling revenue is currently growing faster than those in Las Vegas and Macau. This applies to online gambling, as well.
Online casinos in New Jersey have existed for years. Recently, the state chose to regulate and tax this industry. Today, all casinos in Atlantic City operate internet casino websites. They are geo-located, meaning anyone within the state’s borders can play these casino games online.
Internet gambling sports betting is also available here. Interestingly, the state’s land-based casinos still bring in the vast majority of revenue here. Many analysts feel this will change within the next several years.
We’ll need to wait and see what changes Luxor Capital Group makes to Ocean Casino Resort. Making this casino profitable is no easy task. Fortunately, Luxor has the funds and experience in the gaming industry to make things work.
There are a lot of major changes happening in Atlantic City. Make sure to stay tuned for updates on this situation as they come out!