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Another page has turned in the short and stormy history of the newest casino in New Jersey.
Barely six months after cutting the big blue ribbon in front of Ocean Resort, developer Bruce Deifik is selling his majority ownership in the struggling property. A Thursday report from the Associated Press provided confirmation of rumors which first escaped into the light a day prior.
Deifik purchased the former Revel on Jan. 8, 2018, making his tenure at the helm just a year long. The buyer’s identity is not yet public, but the casino will reportedly remain open during the transition.
The sale isn’t a tremendous surprise considering the shape of the monthly reports from the NJ Division of Gaming Enforcement.
Despite being the costliest of the nine Atlantic City casinos, Ocean’s revenue remains the leanest of the bunch — under $12 million in November. That’s less than Bally’s ($14 million) for comparison and far less than Borgata ($56 million). And it’s trending sharply downward.
It’s logical to speculate about the ability of the NJ market to support nine casinos, but the competition seems to be doing just fine. Some of those potential Ocean customers are hanging out right next door, for that matter. Hard Rock AC, which opened on the same day, generated more than $21 million in November casino revenue.
Though Deifik would not identify the buyer, reliable rumors have begun circulating within the industry.
Sources tell @OPRupdate the new owner is a mix of bank that was already involved in ownership and a small consortium of wealthy individuals from CO. No super-familiar gaming names in the mix as far as I’ve heard. https://t.co/uABDrh7XeO
— Chris Grove (@OPReport) January 10, 2019
The building known (for now) as Ocean Resort first opened as the palatial Revel in 2012.
A confusing layout and a confused identity doomed the $2.4 billion resort from day one, though, and a series of unfortunate economic (and environmental) events hastened its demise. Twice bankrupt and never once turning a profitable quarter, it closed before the end of 2014.
Florida developer Glenn Straub subsequently scooped up the property at auction for pennies on the dollar — just $82 million — but he never actually owned a casino. Disputes with state and local officials kept him from securing a gaming license, and the doors to TEN never opened under his ownership. To call Straub’s tenure chaotic would be an understatement.
Enter Deifik, who assumed the role of the white knight with a grand vision for the shuttered property. His group paid $200 million to acquire the real estate in 2018 and invested significantly more to exorcize the ghosts of casinos past.
In the end, though, Ocean is meeting a familiar fate.
Although he won’t get to see his vision realized in full, Deifik deserves recognition as one of the few investors willing to put his money into that particular slice of the AC Boardwalk. He did it with some gusto and charisma, too, a welcomed contrast from Straub.
Deifik’s group initially planned to invest another $175 million in sweeping renovations and re-imaginations, and the effort certainly shows. In addition to its hotel and casino amenities, Ocean is starting to become a multipurpose entertainment destination. In the AP report, Deifik praised the sale as a new investment that would “put (the) property on an exciting path to growth.”
For all of its troubled history, there’s still a lot of potential trapped inside Ocean Resort.
The buyers inherit the tallest structure in Atlantic City, boasting almost 1,400 guest rooms and 130,000 square feet of gaming space. Although the building has changed hands (and names) several times since construction, it is practically brand new. Its William Hill sportsbook is arguably the best place in town to watch a game, and the Ocean Resort online casino has posted modest month-to-month growth since launch.
The new ownership reportedly plans to invest an additional $70 million as it takes the reins from Deifik, who will retain a small, non-controlling interest.