NJ Law Likely to Clear Way for PokerStars Bid for Atlantic City Casino
When the parent company of online poker room PokerStars, The Rational Group, made a move toward the acquisition of a land-based casino in Atlantic City, New Jersey, last year, most news outlets reporting on developments in the negotiations were quick to point out that the completion of the deal was utterly dependent on the passage of a law to regulate Internet-based gambling in that state. Now that New Jersey’s Governor, Chris Christie, has issued a conditional veto on the bill, a major stumbling block appears to be removed.
In opting for the conditional veto last week, Governor Christie sent the bill, whose proponents and opponents were equally matched in their commitment to their respective camps, back to the state legislature to vote on changes Christie wants to see made before he will commit to signing the bill into law.
Those alterations mainly focus on tax rates, problem gambling issues, and the fact that Christie wants the law to expire after a ten-year time period is up. One of the legislators who sponsored the bill, New Jersey state Senator Raymond J. Lesniak, has said that he anticipates that the state legislature will vote to approve Governor Christie’s amendments before mid-March.
PokerStars is the world’s largest online poker room, and is also in many ways the one that attracts the most news. This is owed largely to its deal with the United States Justice Department last summer to acquire its former rival, the much-disgraced Full Tilt Poker, for $731 million.
Full Tilt was shut down by the government in April of 2011 and was accused of running a Ponzi scheme of sorts, with high-ups in the company taking large bonuses and payouts from the site, which has still not repaid US-based account holders. The matter of player reimbursement is being handled by the Justice Department, which has sought to hire an outside auditor to oversee the process.
According to the terms of its deal with the government, PokerStars admitted no wrongdoing though it was also guilty of continuing to offer real-money online poker games to American players after the 2006 passage of the UIGEA, a law prohibiting financial transactions related to gambling. It also ceased operating in the US Market on April 15, 2011, the day known to poker players as Black Friday. The legal case has been handled by federal courts in New York.
The New Jersey legislation was changed at the end of last year to amend wording that would have called for a waiting period before companies that offered online poker games to US players after 2006 could enter the regulated marketplace. The removal of that verbiage allows for The Rational Group to operate The Atlantic Club, providing the deal is approved by the New Jersey Casino Control Commission, with which Rational filed an interim application back in December.
The deal, and the Internet gambling bill in general, have been cheered by Atlantic City labor unions and casino employees, who hope for a brighter future for the town. Facing pressure from neighboring states, Atlantic City has suffered annual revenue declines for the better part of a decade, and many eagerly await the completion of the deal.
Said Eric Hollreiser, Rational’s communications director, “The acquisition of The Atlantic Club Casino Hotel will secure up to 2,000 jobs and maintain the economic benefits the casino brings to New Jersey. During this interim period, the Atlantic Club Casino Hotel will operate as normal under current management, who will be retained following completion of the acquisition.”
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