The Atlantic Club Casino Hotel has filed for Chapter 11 bankruptcy and will continue operating while hoping to expedite a sale.
The struggling casino’s chief operating officer, Michael Frawley, punctuated the announcement by telling the Press of Atlantic City, “We believe in our property’s positioning and the value-centric niche we committed to nearly 18 months ago. . . . Unfortunately, the market has taken longer to rebound than we had hoped.”
New Jersey officials are anticipating a rebound come November 26 when real-money online gambling makes its debut. Declining revenues for seven years will likely be buoyed from regulated Internet wagering that includes poker and a full slate of online casino games such as blackjack, slots and roulette.
However, the Atlantic Club will apparently not be taking advantage of its opportunity to secure an online gambling operator’s permit. The casino’s owners, Colony Capital LLC, have not partnered with any online gaming companies who have experience in providing online software and the like.
The Atlantic Club will be watching from the rail as 10 of the 12 New Jersey casinos do intend to provide online gambling to the almost nine million residents who call the Garden State home. Instead, the Atlantic Club will be subjected to bankruptcy proceedings and will likely be auctioned to the highest bidder.
PokerStars was such a bidder in late 2012, coming to an agreement to purchase the casino at a bargain-basement $15 million price. But Colony Capital exercised its option to back out of the deal earlier this year when PokerStars had not received licensed approval from the New Jersey Division of Gaming Enforcement (DGE) by an agreed upon date.
The Atlantic Club held onto the $11 million that PokerStars had thrown into the pot to keep the casino operating in accordance with the acquisition agreement. PokerStars now wants that money back and has taken legal steps in an effort to facilitate the recovery of funds.
Meanwhile, not wanting to be left out of the U.S. market in New Jersey, PokerStars teamed up with the Resorts Casino. That partnership is still under review by DGE officials who continue to scrutinize the world’s top poker site and their continued operations in the U.S. post-UIGEA. New Jersey removed bad actor provisions from their online gambling regulations before passage.
Also seeking protection in bankruptcy court earlier this year was the Revel, the only other Atlantic City casino that has not inked an Internet gambling partnership agreement. Thus far, five casinos have received the green light from the DGE to go live later this month. The other five, Resorts and the four operated by Caesars, await a DGE rubber stamp.