PokerStars Won't be Buying the Atlantic Club Casino Hotel
Last year the parent company online poker website PokerStars, the Rational Group, was reportedly in the process of purchasing a land-based Atlantic City casino called the Atlantic Club Casino Hotel.
Now that deal has fallen through, and with it down go the hopes for saving the struggling Atlantic Club, which was reported to have lost $43 million last year.
Commenting on the end of talks that have gone on since late 2012, today the COO of the Atlantic Club, Michael Frawley, said, “Our purchase agreement with PokerStars has been terminated in accordance with its terms.”
“The Atlantic Club remains committed to the aggressive pursuit of the opportunities presented by online gambling. The advent of New Jersey’s online gaming legislation has changed Atlantic City’s future for the better and The Atlantic Club is absolutely going to be a part of that future, ” Frawley added.
While details of what caused the negotiations to terminate were scarce, it is known that PokerStars made a bid to take over the property last year, reportedly for a purchase price below $50 million. The Atlantic Club was originally developed in the early 1980’s by casino titan Steve Wynn before he went on to begin developing his groundbreaking Nevada casinos, and in fact by 1983 enjoyed the status of being the city’s most profitable casino.
In the intervening years, the property has declined and was re-branded in 2012 as a locals-only casino with the rather morose slogan of “a casino for the rest of us.” As Atlantic City on the whole has been struggling for years with slipping revenues – there have been annual declines for six years running – the Atlantic Club faces the danger of closing, taking its jobs with it.
The deal with PokerStars was seen by many as a potentially positive move toward turning the property around, and completion of the deal was greatly dependent on the passage of New Jersey’s online gambling bill, legislation that was signed into law by first-term Republican Governor Chris Christie at the end of February.
The completion of the Atlantic Club acquisition also would have marked the re-entry of PokerStars to the United States market, in which it has not operated since 2006, when the United State Justice Department cracked down on unregulated US-facing Internet poker sites.
That re-entry was not something that was eagerly anticipated by all; in March powerful gambling trade group the AGA filed a brief opposing the deal on the basis that PokerStars violated US gambling law in continuing to offer online poker to US residents after the 2006 passage of the UIGEA, and therefore should be barred entry to the regulated New Jersey market.
In the months since news of PokerStars’ plan to buy the Atlantic Club first became public, there has been a fair amount of mystery surrounding the negotiations. For example, in January PokerStars was reported to have filed an application for an interim operating license from New Jersey casino regulators as part of the necessary steps to take over operation of the property.
Then, in March, as the AGA and others began to vocally oppose the deal, news broke that in fact the application was incomplete and had never been submitted to New Jersey officials. The reason for the delay and misinformation was again never explained, however word came in April that the application was complete and had been turned in to New Jersey officials.
New Jersey State Senator Raymond D. Lesniak, a sponsor of the online gambling legislation, bemoaned the failure of the PokerStars negotiations as a loss for Atlantic City, saying, “That’s not good news for Atlantic City for sure. Unless the Atlantic Club can find a white knight to invest in its operations, they’re going to be a couple thousand people out of work, which will also have a broader impact on Atlantic City’s recovery. I hope there’s a Plan B.”
For its part, PokerStars has declined to comment on news of the deal’s demise.
