When last week was wrapping up, the latest news in PokerStars' quest to purchase the land-based Atlantic Club Casino Hotel was only that PokerStars was apparently blindsided by the deal's expiration and that the company was still hoping to be able to complete it.
Eric Hollreiser, who serves as director of corporate communications for the famous online poker room, reinforced the company's commitment to taking over the struggling New Jersey casino on Thursday evening, when he remarked via Twitter that PokerStars was under the impression that the Atlantic Club was willing to extend the contract's timeline in order to accommodate the need for PokerStars to apply for an interim license to operate the casino.
That application was originally reported to have been completed and filed with New Jersey regulators back in March, however it was not actually filed until April.
This morning PokerStars put their money where their mouths were and filed a lawsuit against the owners of the Atlantic Club, accusing them of breaching the purchase contract. PokerStars also requested a restraining order that will prevent the Atlantic Club from selling the property to anyone else, a request that a judge has granted. A court hearing has been scheduled for May 17, with the contract being essentially re-instated until that hearing takes place.
According to the complaint, PokerStars was set to purchase the Atlantic Club for $15 million, with $11 million of that sum already having been advanced to the Atlantic Club. The Atlantic Club has, according to the suit, requested a $4 million contract termination fee from PokerStars. There are some who see this as a somewhat suspicious situation, as PokerStars has already paid nearly the entire purchase price and has, to many observers, clearly acted on good faith with regard to the negotiations and the sum of money invested.
PokerStars also notes that the timeline that the Atlantic Club adhered to failed to account for a 120-day waiting period that is required after the operating application is filed, despite having a contractual obligation to assist PokerStars in its bid for licensing.
Speaking to the licensing process, Hollreiser said in a statement posted on the PokerStars blog, "The Rational Group remains entirely committed to resolving this situation, and to its investment in New Jersey, while it continues to diligently work on completing the required licensing process."
The $15 million purchase price is a far cry from the $50 million that has been the most-often quoted figure since news of the negotiations broke early this year. Talks between the two companies began at the end of last year, with PokerStars having promised to return the struggling Atlantic Club to its glory days. Once among the city's most profitable casinos, in 2012 the deteriorating Atlantic Club rebranded itself as a downmarket "locals only" casino, taking on the motto "a casino for the rest of us."
There are many in Atlantic City who have been pinning their hopes on the completion of the PokerStars deal, not only because new ownership of the property may be the only way to save the 1800 Atlantic Club jobs that are in danger if the property shuts down, but also because it would mark the entry of the world's largest online poker room into New Jersey's brand-new online gambling market. The first real money gambling sites are expected to launch there later on this fall, following in the footsteps of Nevada, where the first regulated online poker site in the United States went live last week.
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