PokerStars Files Order to be Sole Purchaser of Atlantic Club Casino
Reports surfaced last week that the deal between PokerStars and Colony Capital, the owner of the Atlantic Club, had collapsed. The Rational Group, owner of PokerStars, has been in negotiations with Colony Capital to purchase the New Jersey land-based casino for months now, and apparently something in the agreement went wrong. As such, The Rational Group has filed a restraining order intended to prevent Colony Capital from having the right to sell the casino to anyone else.
A spokesperson for PokerStars said, “This step has been taken to protect Rational Group’s rights and interests under the purchase agreement,” reported The Star-Ledger, “and reflects the group’s desire to complete the acquisition of the Atlantic Club.”
It’s uncertain what went wrong, as negotiations seemed to be progressing quite well. Whatever the case may be, Colony Capital chose to back out on the deal. We do know that PokerStars has yet to receive approval from the state of New Jersey to hold a gaming license, but that may or may not have anything to do with the current situation. About one week after the deal went sour, The Rational Group filed for the restraining order.
One possibility for the deal’s collapse could be the American Gaming Association’s direct opposition of PokerStars operating on US soil. The AGA, which happens to be one of the most prominent lobbying groups for the casino industry, spoke out against the online poker operator in March, making it quite clear that PokerStars’ past behavior should prevent the company from being able to enter the US market. The AGA said that PokerStars’ involvement in the ominous Black Friday of online poker – wherein the US Department of Justice forcibly seized control of and shut down a number of online poker sites that continued to offer their services to Americans – should be enough reason to keep lawbreakers, like PokerStars, from being permitted to purchase and operate a US-based casino, online or otherwise.
There is no question as to why PokerStars is so interested in procurement of the Atlantic Club Casino. It’s not that The Rational Group is so keen on moving into the brick-and-mortar gambling business, but rather the anticipation of New Jersey licensing land-based companies for legal operation of an online poker room and/or casino in the near future. New Jersey is one of just three states in the US to have passed online gambling laws. Under current regulatory restrictions, the only way to obtain an online gaming license is to be in operation of a land-based casino within the boundary limits of Atlantic City.
Because PokerStars settled its case with the US government without ever admitting any wrongdoing, The Rational Group may be able to avoid being banned from operating an online gambling site in the US. If they did nothing wrong, as the final result of their indictment and tribunal states, there is no reason the company shouldn’t be permitted to enter the US market. That, at least, is the stance of PokerStars.
The price tag for the Atlantic Club is $15 million, and PokerStars has no intention of missing out on the deal. A hearing has been set for May 17, until which time Colony Capital will not be able to sell the casino.