A composite of the published data on gross revenue for these two facilities during the first few months of operation could have had been titled “A Tale of Two Casinos.” According to Terry Glebocki, Ocean’s CEO since Dec. 2019, Ocean Resort Casino reported a first six months net loss of $28 million. At one point, the property kept losing $1 million per week!
Accordingly, many analysts expressed serious doubts that the new facility could survive long-term. They feared that it was plagued by the “Revel curse” and was destined to follow in its doomed predecessor’s footsteps.
Who would have guessed that a new owner–Luxor Capital Group–would not only save the day but propel an improvement in services and a corresponding increase in attendance and revenue to an extent considered nothing short of remarkable?
Casino Control Commission and DGE unanimously agree to grant Luxor Capital Group a license to operate Ocean Casino Resort
In August 2019, seven months after Ocean announced Luxor Capital as its new owner, the Casino Control Commission (CCC) and Division of Gaming Enforcement (DGE) granted Luxor Capital an interim license to continue operating in that capacity. However, Luxor Capital still needed to pass a thorough investigation by the DGE. Also, final approval would depend on the extent to which the casino’s performance would improve under Luxor’s leadership.
As reported in a May 6 article on PressofAtlanticCity.com, earlier that day a follow-up hearing took place to reassess the situation. The two agencies unanimously agreed to upgrade Luxor Capital’s interim license to a regular license.
NJ gaming regulators were impressed by Luxor’s demonstrated ability to follow through on its commitment to the property
When Luxor Capital Group had received initial approval in January 2019 to take over ownership of the then struggling property, it had agreed to pay off $50 million of its debt and invest another $20 million in property enhancements. Luxor also appointed a new management team with experience in the Atlantic City market to focus on fixing the major problems that might have contributed to its failure to resonate with customers.
What started with a simple name change has led to everyone thinking WOW–Can this be the same casino?
On April 10, 2019, to reflect the owner’s intention to convey the message that Ocean was first and foremost a casino, the property changed its name. Ocean Resort Casino became Ocean Casino Resort.
But that was only one change of many.
More signs made the layout of the casino floor less confusing. New elevators were installed to whisk guests directly from their hotel rooms to the casino floor and back. Safety panels were added to the escalator to the casino floor.
Other noteworthy improvements included all of the following:
- New restaurants and lounges
- Numerous discount offers for dining and shopping
- A greatly expanded top entertainment lineup,
- Frequent prize drawings and giveaways
- A completely new WOW Player’s Rewards program.
During the third quarter of 2019 (July through September), Ocean Casino Resort reported a gross operating profit of $10.27 million. It marked the first profitable quarter in the property’s history.
Thereafter, the property that was once on life support continued its upward momentum with no sign of slowing down. According to CEO Terry Glebocki, January 2020 marked its seventh consecutive month of double-digit growth.
Furthermore, a comparison of the revenue figures for the period of July 2019 – February 2020 with those for the same months of 2018 revealed the following:
- Slot revenue: up $41.1 million (54 percent)
- Table games revenue: up $6.4 million (17 percent)
- Nongambling revenue: up $14.6 million (19 percent)
- Expenses: down $5.6 million (3 percent)
However, Ocean Casino is far from done
At the May 6 formal hearing, Glebocki told the CCC that while the emphasis in 2019 was on the brick and mortar casino, in 2020, the focus will shift more towards online gaming.
This is a category on which last year, among the nine existing Atlantic City casinos, Ocean finished dead last. However, Glebocki stated that she is encouraged by the recent increase in revenue from online gaming coinciding with the current pandemic. She will ask the Marketing department that has had so much success in improving the bottom line for the brick and mortar casino to work their magic with the online casino.
What’s ahead for Ocean Casino Resort when it reopens?
Meanwhile, the coronavirus has impacted several planned but not yet implemented projects for the Atlantic City hotel and casino. Reconfiguring the casino floor and installing a high-end area for both slots and table games were relegated to the back burner.
Luxor Capital Group Director of Research Michael Conboy, who attended the April 6 hearing along with Glebocki, admitted that operating profitably when the casino reopens will be a challenge. But he is confident that Ocean Casino Resort can handle it.
He pointed out that over the last three quarters, Ocean Casino Resort required no additional infusion of money from Luxor.
Conboy also stated that “Ocean’s success has succeeded expectations. Before coronavirus, it was self-sufficient. And when we are back to operating normally. I would expect it to be self-sufficient.”
On the one hand, calling the trajectory “incredibly positive, but on the other hand, admitting that given the existing circumstances, Ocean needs to tread slowly, Conboy continued as follows:
“I can’t say what a great job the team has done. The rapid nature of recovery surprised Luxor, surprised myself. So the trajectory was bright, but we have to be realistic (when reopening). We expect when we open it will be soft. So we have to focus on cash flow and profitability and tightening the belt straps and pushing off — for six or 12 months — the more grandiose capital plans … but that won’t change anything where Ocean will be five or 10 years from now.”
Glebocki echoed Conboy’s sentiment and stated:
“My hopes are we can resume once we have more certainty and get through the season.”
Based on all of the foregoing, on May 6, 2020, the DGE and CCC concurred that Ocean Casino Resort, under Luxor’s exemplary leadership, has demonstrated both financial stability and integrity. Accordingly, they decided that Luxor has officially met all of the final requirements for a NJ casino license. The decision was unanimous.