PokerStars Not Letting Go of Atlantic Club Without a Fight
When a representative for the massive online poker Web site PokerStars remarked last month that the company was committed to seeing the completion of its stymied deal to purchase a land-based New Jersey casino, the Atlantic Club Casino Hotel, clearly he meant it.
Though the above-mentioned spokesperson, Eric Hollreiser, declined to elaborate further, he did confirm that this week the parent company of PokerStars, the Isle of Man-based Rational Group, filed an appeal seeking to get the purchase back on track.
Judge upheld termination in May decision
Last month a judge upheld the Atlantic Club’s termination of the purchase contract and shut down an attempt by PokerStars to block the Atlantic Club from entering into sale negotiations with any other prospective buyers.
PokerStars had been in talks to buy the financially-strapped Atlantic Club since late last year, with the purchase price of $15 million coming in well below the previously rumored price of somewhere just below $50 million. The two parties signed a purchase contract in December of 2012.
According to legal documents, PokerStars has already paid $11 million of that $15 million figure to the Atlantic Club, funds that the Atlantic Club will be able to keep if the courts again decide in their favor. Part of that money was fronted to the casino by PokerStars in order to keep the property operational in the midst of continuing revenue struggles.
Licensing delays led to deal “timing out”
At the heart of the dispute is a delay that the Rational Group faced in gaining an operating license from New Jersey gaming regulators, a situation that the company described as being beyond their control. Attorneys for the Rational Group have said that Atlantic Club officials gave no indication that the regulatory delays would have any bearing on the completion of the deal, with talks having continued as normal through the early spring.
Previously, PokerStars representatives remarked that they were blindsided by the termination notification that they received from the Atlantic Club, which was once one of Atlantic City’s most successful casino properties. In recent years, it has suffered a decline and now is among the city’s least successful casinos, having last year adopted the rather depressing motto “a casino for the rest of us” after re-branding itself as a locals-only casino.
PokerStars has promised to turn property around
For its part, PokerStars maintains that in acquiring the Atlantic Club, a property that was originally developed in the early 1980’s by the man famous for transforming the Nevada casino industry, Steve Wynn, they will be helping to preserve jobs and contributing to the economy of New Jersey.
The Atlantic Club employees about 1,800 people, whose jobs are said to be in danger if the hotel should close. Atlantic City, struggling with a six-year revenue decline streak, is hoping that the passage earlier this year of an Internet gambling law will help to stem the losses and set the city’s – and the state’s – gambling industry on a new path.
“This is a matter of great public importance, to the Atlantic Club’s employees, to the highly regulated casino industry, to (state casino regulators) and to plaintiffs, who invested more than $11 million in the Atlantic Club in connection with the purchase agreement,” the Rational Group said in a statement.
