The acquisition agreement between PokerStars and the Atlantic Club casino’s owner expired last Friday, which may result in the world’s top poker site getting shut out of the U.S. online gaming market in New Jersey.
Colony Capital, the investment firm listed as owner of the Atlantic Club, and PokerStars’ parent company the Rational Group, had agreed to terms in December on a purchase price of the struggling casino. A stipulation within the agreement required PokerStars to have secured a casino license by April 26 to complete the deal, the Wall Street Journal reported.
PokerStars applied for an interim casino license in January, but was forced to re-submit the application when New Jersey gaming officials found the initial application to be incomplete. The Division of Gaming Enforcement (DGE) announced on April 10 that PokerStars had complied with the necessary application requirements.
Following the re-submission, the DGE has 90 days to investigate PokerStars’ suitability and file a report with the New Jersey Casino Control Commission. That report would be due July 9. The commission is permitted 30 more days, until August 8, in which to hold a hearing and rule on the application. However, those deadlines may no longer be of consequence if the agreement between the buyer and seller has expired, which the WSJ claims to be the case.
The expiration of the agreement is the latest snafu that may hamper PokerStars’ ability to enter the U.S. online poker market. It follows by almost two months a strongly-worded petition filed by the American Gaming Association that urged New Jersey gaming officials to disallow the purchase of the Atlantic Club by PokerStars.
The AGA blasted PokerStars by stating that the site obtained dominance in the industry through deceptive practices that included virtually ignoring the Unlawful Internet Gambling Enforcement Act in 2006. PokerStars continued servicing the American marketplace while other companies bowed out. New Jersey regulators have yet to decide if the AGA’s petition may be taken under consideration in determining license suitability. But it may not have to rule on such matters if the acquisition agreement has expired.
Rumors abound that Colony Capital may choose to entertain other offers for the Atlantic Club, as its value has certainly increased following passage of online gambling legislation in late February. That legislation has no bad actor clauses that seemingly would preclude an alleged UIGEA violator from obtaining a license. Nevada does have a bad actor provision, so New Jersey is currently seen as PokerStars best chance of getting a foot in the door of the U.S. online gaming market.