PokerStars’ executives expressed surprise that an agreement to acquire the Atlantic Club casino was allowed to terminate without the parties merely extending the deadline.
Through its parent company, the Rational Group, PokerStars had agreed to purchase the New Jersey casino from owner Colony Capital for $30 million contingent on PokerStars being granted a casino operating license from state regulators. The deal between the parties called for an interim casino license to be issued no later than the end of April for the deal to move forward.
But PokerStars’ application submitted to the New Jersey Division of Gaming Enforcement was not completed until April 10. State regulators have 120 days from that date to make a final decision on the matter, which would be in early August.
Colony Capital sent PokerStars a termination notice following the expiration of the agreement a few days ago, much to the dismay of Rational Group’s Head of Corporate Communications, Eric Hollreiser.
“It was the Rational Group’s expectation and understanding, based on the ongoing dealings between the parties, that the closing date would be extended to allow the transaction to be completed,” Hollreiser said. “The Rational Group remains entirely committed to resolving this situation and to our investment in New Jersey.”
PokerStars has reportedly already invested $11 million to operate the casino during the last few months and has promised to sink another $40 million into the ailing casino over the next five years. The deal between Colony Capital and Rational Group had been brokered prior to New Jersey Governor Chris Christie signing online gambling legislation in late February.
Now that the Garden State is preparing to launch an Internet poker and casino gambling regime that promises to be quite lucrative, Colony Capital may decide to entertain other offers for the Atlantic Club. Its value has undoubtedly increased since the parties first sat down at the bargaining table in December.
PokerStars has been accused of being a bad actor by the American Gaming Association and others in the industry for obtaining dominance in the marketplace by flouting the UIGEA in 2006 and continuing to cater its online poker services to U.S. customers. New Jersey’s online gaming statute initially had bad actor language included, but the provision was removed prior to Christie signing the bill into law.
As such, New Jersey appears to be the best opportunity for PokerStars to enter the U.S. online poker market. But with time expired on the acquisition agreement, PokerStars has seemingly been dealt a bad beat.