Bankrupt Atlantic Club Heading to Auction Block
Anyone interested in bidding on the Atlantic Club Casino Hotel in Atlantic City, which last Wednesday filed for bankruptcy protection, will have to submit an offer within a relatively short window, according to the Press of Atlantic City.
Bids to be placed within one week
A judge in the state of New Jersey dictated on Friday that parties wishing to place bids on the ailing property, which was first developed by casino mogul Steve Wynn back in the early 1980’s, must do so by November 18.
The winner of the auction should be announced sometime in December, the Press reported.
PokerStars buyout failed earlier this year
The Atlantic Club, which was reported last year to be in danger of closing, taking its more than 1,600 jobs with it, earlier this year terminated a deal that would have seen it taken over by the Rational Group, the parent company of online poker giant PokerStars.
PokerStars had already paid $11 million toward a total $15 million purchase price when the Atlantic Club pulled the plug on the agreement, citing PokerStars’ failure to secure a temporary operating license from New Jersey gaming regulators as the reason for the termination.
Though PokerStars sued the Atlantic Club in order to get the purchase back on track, a New Jersey judge ultimately ruled in favor of the Atlantic Club, permitting the casino to keep the $11 million that PokerStars had already paid out.
Property has suffered same fate at Atlantic City as a whole
The Atlantic Club has long been one of the worst-performing of the dozen land-based casino properties in Atlantic City, which itself has seen a years-long streak of revenue decline as it faces stiff competition for visitors and gambling revenue from neighboring states, including Delaware and Pennsylvania.
Despite its efforts to re-brand as a more downmarket property – and despite an uptick in gambling revenue for 2013 – the Atlantic Club continues to struggle and has been reported to have a pension liability amounting to $30 million.
“We believe in our property’s positioning and the value-centric niche we committed to nearly 18 months ago. Our creative branding campaign and the tremendous efforts of our employees have resulted in property growth within a continually challenged market. Unfortunately, the market has taken longer to rebound than we had hoped,” the Atlantic Club’s Chief Operating Officer Michael Frawley said last week in the wake of the property’s bankruptcy filing.
If analysts and gaming regulators in New Jersey are correct, however, Atlantic City could see the start of a turnaround with the launch of real money Internet betting in the state.
Online wagering sites will be going live in the Garden State at the end of this month. Joining Nevada and Delaware on a list of U.S. states that offer legal real money online poker and, in the case of Delaware, other games as well, New Jersey will open its online betting market on November 21 in a soft launch mode, with the full launch set to take place five days later on November 26.
