PokerStars in Talks to Buy Atlantic Club Casino
Online poker behemoth PokerStars is reportedly in “advanced talks” to acquire a land-based Atlantic City casino, The Atlantic Club Casino and Hotel. The Wall Street Journal was advised by several unnamed sources close to the negotiations that Isle of Man based PokerStars has informed New Jersey regulators of its plans to purchase the struggling casino, currently owned by investment group Colony Capital. The purchase price is said to be below $50 million.
The deal, which is still weeks away from being finalized and could fall through at any time, would represent a return to the US for PokerStars, which saw its site shuttered last year amid the Black Friday shutdowns. Earlier this year, PokerStars struck a $731 million deal with the United States government to acquire former rival Full Tilt Poker. While the Full Tilt deal was completed without any admission of wrongdoing by PokerStars, its founder, Israeli national Isai Scheinberg, remains under indictment on criminal charges related to the case and his son has taken over operation of the company.
The Atlantic Club Casino has led a storied life stretching back to when gambling was first legalized in the state of New Jersey back in 1976. Originally opened by Steve Wynn as his first project after his triumphant success overhauling the Golden Nugget in Las Vegas, it went from being one of the smallest Atlantic City casinos to being its most profitable by 1983. Wynn parted ways with the property in 1987 due to frustrations with local regulators, selling it to Bally’s for $440 million. The capricious Wynn departed Atlantic City for Las Vegas and the construction of the Mirage, at the time vowing never to open another casino there again, but invested in land prior to leaving in the event he changed his mind.
The property was renamed the Atlantic City Hilton following Hilton’s acquisition of Bally, which in 1998 re-grouped all of its casino properties under a new company, Park Place Entertainment. The property has continued to decline in the ensuing years, with current owner Colony Capital having re-branded it as a locals-only casino in 2011, adopting the motto “a casino for the rest of us.”
According to sources, the Atlantic Club deal is heavily reliant upon New Jersey passing a bill to regulate online gambling in the state, which the Wall Street Journal reports will be voted on by the end of this year. Chris Christie, the Republican governor, vetoed an online gambling bill last year. The proposed legislation would provide for online gambling for residents in New Jersey only, as well as for those present at Atlantic City casinos.
PokerStars attorney Jeff Ifrah believes that the company, which also will have the ability to offer its Full Tilt brand in a regulated New Jersey market, should have no difficulty being licensed despite having kept its online poker rooms open to US customers long after the passage of the 2006 UIGEA, a bill restricting gambling-related financial transactions. The New Jersey legislation was amended to allow companies who have recently had a presence in the US market to re-enter should regulation pass.
“Those provisions clearly permit PokerStars to offer real-money play under a licensed regulatory scheme provided by a state and participate in New Jersey,” Ifrah said.
Should New Jersey pass legislation to regulate online poker, it will join Nevada and Delaware, both of which have recently green-lighted the game.
