The Atlantic Club Casino Hotel located in Atlantic City has lodged a response to an appeal filed earlier this month by the parent company of online poker web site PokerStars in their ongoing case to sort out an aborted attempt by PokerStars to take over the property.
Deal timed out this spring after licensing holdup
PokerStars had been in purchase negotiation talks with the Atlantic Club, one of the least successful of Atlantic City's dozen casinos, since late last year. The two parties reportedly signed a purchase contract last December, with PokerStars agreeing to a purchase price of $15 million - well below the $50 million figure that was widely publicized when word of the deal first began to spread last winter.
In late April, PokerStars claimed to be blindsided by a notification sent by officials from the Atlantic Club alerting them to the deal's termination due to PokerStars' inability to secure an interim operating license from New Jersey casino regulators prior to a drop-dead date stipulated in the contract. That date was April 26.
PokerStars appeals after judge upholds termination
PokerStars quickly filed suit against the Atlantic Club, a property that, in the early 1980's, was among Atlantic City's most profitable, seeking to have the deal move forward. The company has already paid $11 million toward the purchase of the embattled property, money that won't be refunded should the decision ultimately go in favor of the Atlantic Club.
Because the New Jersey Division of Gaming Enforcement requires a 121-day waiting period for the close of a casino purchase deal to consider interim licensing, PokerStars had essentially just enough time from the signing of the acquisition deal before the April 26 date.
New filing asserts that PokerStars was well aware of deal's terms
In its new filing, the Atlantic Club asserts that PokerStars was well aware of the terms of the contract - including the outside date - saying that the world's largest online poker room had "its eyes wide open."
Whether the judge will view the matter in the same light remains to be seen. For PokerStars, a victory would be nothing short of a massive win as it seeks to gain a toehold in the emerging United States online gambling market. PokerStars stopped offering US-facing online poker games following a 2011 federal crackdown on illegal gambling operations. They ultimately settled their case with the United States government without admitting to any wrongdoing, in the process taking over the assets - and debts - of their former rival, Full Tilt Poker.
New Jersey Governor Chris Christie signed into law a sweeping Internet gambling bill back in February partly in the hope of aiding a fiscal recovery of the state's long-struggling gambling industry; Nevada and Delaware have also cleared the way for residents to place online wagers. If PokerStars is able to complete their now-interrupted acquisition of the Atlantic Club, the company would then be able to apply for licensing to being offering online poker to New Jersey residents.
Check back with us as we continue to monitor and update this story.
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