Deal Between PokerStars and Atlantic Club Casino Goes Sour
The deal between Altantic Club Casino, a struggling land casino in Atlantic City, and PokerStars, the world’s biggest online poker room, has gone sour. For some time, it looked as if PokerStars would acquire the struggling land casino and easily step into a regulated online poker market in New Jersey.
The American Gambling Association (AGA) had turned PokerStars’ plans upside down. Accusing PokerStars of being a “criminal enterprise,” the association had done everything in its power to stop the online poker room from acquiring Atlantic Club Casino. The AGA had also submitted petitions to the regulatory bodies in New Jersey. PokerStars’ parent company The Rational Group had responded by questioning the AGA’s motives, alleging that the association was trying to cut competition in the US online gambling business.
The Atlantic Club Casino not only terminated the acquisition deal, but also decided to keep the $11 million the online poker room had invested in it on grounds that it is “a risk they took for the opportunity of being at the forefront of online gaming in New Jersey.”
Quite understandably, one wouldn’t expect PokerStars to take no action against this. The company retaliated and secured a restraining order to prevent Atlantic Club Casino from terminating the deal. Raymond Batten, judge of the Atlantic County Superior Court, signed this order stating that the $15 million acquisition deal, which the Atlantic Club Casino had terminated, still remained valid.
Eric Hollresier, spokesperson for PokerStars, said: “This step has been taken to protect Rational Group’s rights and interests under the purchase agreement and reflects the group’s desire to complete the acquisition of Atlantic Club.”
PokerStars alleged that Atlantic Club Casino had demanded an extra $56 million from PokerStars to extend the deal to 10 more days just one day before it terminated the deal. At the same time, Atlantic Club Casino wanted to be allowed to hold negotiation talks with other potential investors. Wayne Positan, legal representative of PokerStars, stated in the company’s complaint: “The circumstances of the termination and the outrageous nature of the terms of the extension demonstrate that the sellers have breached the contract and the duty of good faith and fair dealing.”
Atlantic Club Casino immediately filed a case against PokerStars CEOs, claiming that it knew nothing about the illegal activities going on at PokerStars at the time of the federal government crackdown on April 15, 2011.
It now looks as if the troubles are discouraging new companies from investing in Atlantic Club Casino. If PokerStars does not withdraw its restraining order, the Atlantic Club Casino will most likely never be able to recover from its financial difficulties.
PokerStars has recently issued a statement that it will be catastrophic for Atlantic City if the restraining order is not withdrawn. The company says: “As it currently stands, Plaintiffs – who have breached the Agreement – have been granted a unilateral, exclusive option to purchase The Atlantic Club and seek to extend that grant for many months in the face of serious doubt that they will ever obtain regulatory approval in New Jersey.”