Luxor Capital Group is a hedge fund based in New York that was recently approved for a permanent license to operate Atlantic City’s Ocean Casino Resort. The approval was given after the property was able to provide proof that it was financially sound. Since its launch, the property has struggled to gain ground financially.
A hearing took place this week where the company provided insight as to how they would run the Ocean Casino Resort. Once the hearing was completed, the state Casino Control Commission provided a permanent license to continue operating the property.
In the hearing, Michael Conboy, a partner of Luxor, as well as Terry Glebocki, CEO of Ocean, told regulators that the resort had not needed financial help for the previous three quarters. It was showing promise on both the land-based and online side, along with a good performance within the sports betting sector.
Ocean Casino Resort opened back in June of 2018 and is located in the former Revel Casino, which was opened in 2012 but closed only two years later. Luxor took over operation control in February of last year and invested $70 million in the property in the beginning. This included $50 million that was used to pay debt.
During the meeting, CEO Glebocki stated that the company focused on land-based services last year. For 2020, the focus has been on iGaming. The operator has already seen a lot of growth opportunity in the sector and has been working to boost digital operations via the marketing department.
The property has seen solid growth with their online services this year and should continue to improve as the months go by. Glebocki pointed out that the casino will wait on some capital improvement projects planned for this year due to the coronavirus outbreak.
The casino was going to add high-end table games and slots to the property, as well as reconfigure the gaming floor. These projects were supposed to finish up by summer. For now, there is no need as casinos in Atlantic City remain closed.
When the casino does reopen, officials expect the industry to be soft. They will continue to focus on cash flow and profitability as well as tightening the belt straps for the first six to 12 months once the doors open.
The fact that Online Casino does provide online gambling options is a plus for the property. After being closed for almost two months, the online casino operations helps the casino to continue to bring in funds. Of course, the amount is nothing compared to land-based services, but it is revenues nonetheless.
It is expected that casinos will begin to reopen during a phased approach set forth by Governor Murphy but how and when they will occur is anyone’s guess. An official reopening date for casinos has yet to be provided. We shall stay tuned over the coming days to see if any new information is released by officials.