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Atlantic City's Ocean Resort Casino Changing Hands After 6 Months Of Operation

January 10, 2019 / 1:07 PM EST / CBS Philadelphia

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ATLANTIC CITY, N.J. (CBS/AP) — After only six months of operation, Atlantic City's Ocean Resort Casino is changing hands. It's the latest indication that the New Jersey seaside resort may have bitten off more than it can chew when it reopened two shuttered casinos last summer.

The property formerly known as Revel is being acquired by an outside company that will make a major investment into it.

Bruce Deifik, the current owner, would not identify the new company, which would assume majority ownership of the casino.

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The new owner will make a $70 million investment in Ocean Resort, which plans to remain open. The transaction is expected to be finalized Thursday.

The new owner would need to be licensed by state gambling regulators and its identity made known before that. Deifik and his family will retain a small, non-controlling ownership interest in the property.

"It has been truly an honor for myself and my family to have taken this property, opened its doors and brought back the players, the families, the convention guests and the sports betting enthusiasts," Deifik said. "My family and I want to thank the 3,000-plus employees at Ocean for their tireless work to bring our property to life and put it on track to become the best gaming property in New Jersey. If approved and closed, this next round of investment into Ocean will put this property on an exciting path to growth."

Ocean Resort was one of two formerly shuttered casinos that reopened the same day last June, along with Hard Rock.

The reopenings brought Atlantic City's casino total to nine, shortly after five casinos had shut down in a market that could not support them all. The Atlantic Club, Showboat, Revel and Trump Plaza all closed in 2014, and the Trump Taj Mahal closed in 2016. (The Taj Mahal reopened as Hard Rock last year.)

The revival of the two casinos immediately raised questions as to whether Atlantic City was making the same mistake that led to the first wave of casino shutdowns: having too many casinos for them all to thrive.

In its first incarnation as Revel, the $2.4 billion casino lasted just over two years before closing in 2014. Florida developer Glenn Straub bought it out of bankruptcy court for $82 million, and sold it last year to Deifik, a Colorado developer, for $200 million.

Deifik decided to buy the casino sight unseen just over a year ago on the recommendation of his advisers, and set about renovating it, adding an indoor golf facility and one of the state's most extensive sports betting facilities.

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He and his management team said they were confident they had fixed what went wrong with Revel. Deifik reconfigured the maze-like casino floor, allowed smoking on it again, welcomed gamblers of all income and playing levels, and placed a premium on customer service.

He took over Ocean Resort with far less debt than what sank Revel. But the casino's gambling revenue remained near the bottom of the pack along Atlantic City's nine casinos.

In November, the last month for which statistics are available, Ocean Resort won $15.2 million from gamblers, a figure that trailed every casino in Atlantic City except Bally's, which won $14.5 million for the month. By comparison, the Borgata, Atlantic City's market leader, won $61.5 million in November.

In the third quarter of 2018, Ocean Resort had a gross operating profit of $1.4 million. Although it was only open since the end of June, it badly trailed Hard Rock, which opened on the same day as Ocean Resort, and posted a gross operating profit of $8.2 million.

The casino plans to use the new funds to open a buffet, additional suites and rooms, and investments on the casino floor. It also plans "a substantial increase" in its entertainment programming and player events in 2019.