In a statement on its corporate blog, PokerStars lamented the upcoming closing of the Atlantic Club Casino Hotel, hinting that things may have turned out differently had the casino owners not “walked away from” the acquisition agreement with PokerStars and instead waited several months “for the regulatory approval process to be completed.”
Eric Hollreiser, PokerStars’ Head of Corporate Communications, revealed that PokerStars is “saddened” that the Atlantic Club will close on Jan. 13 following bankruptcy proceedings that saw the Tropicana and Caesars submit an approved joint bid of $23.4 million. The new owners will strip the casino for parts, reducing the number of casinos on the Jersey shore to 11.
Some 1,800 casino workers will begin the new year in the unemployment line, putting the hurt on an already struggling New Jersey economy. PokerStars made a deal to purchase the casino about one year ago for $15 million, which it claims could have saved those jobs and injected “new blood, new technology and new finances” toward Atlantic City’s revitalization.
Considering that the online gambling bill in New Jersey had not yet been signed when the deal to acquire the Atlantic Club was first brokered, Hollreiser stated that PokerStars took a huge “leap of faith and commitment of significant investment” by agreeing to bail out the struggling casino. Remember too that PokerStars shelled out $11 million of that $15 million purchase price to keep the casino afloat “in the dark days following Hurricane Sandy and the seasonally slow winter months.”
Indeed, the claim that PokerStars made a tremendous leap of faith and investment is spot-on. There’s no doubt that license approval from state gaming regulators would have permitted PokerStars to take over the casino, open a new live poker room, operate a number of online gaming sites, and make a go at reversing the struggling fortunes of the Atlantic Club.
However, considering that PokerStars’ application for licensing in conjunction with their partnership agreement with the Resorts Casino Hotel has been suspended, it is somewhat hard to see how the Atlantic Club closing was “avoidable.” Hollreiser claims that the Atlantic Club walked away from the deal “in hopes that the improved economic picture could lead to more rewards” following the enactment of online gambling legislation.
It may be more likely that the Atlantic Club owners walked away more because it was obvious to them that PokerStars was not going to get approved due to founder Isai Scheinberg’s staus as a fugitive from justice regarding the Black Friday charges. The two-year suspension of the review of PokerStars’ license application by the New Jersey Division of Gaming Enforcement bears this out.
It appears that the only way the Atlantic Club closing would have been “avoidable” is if PokerStars gained regulatory approval. With Scheinberg not yet answering the charges against him, it’s likely that the regulatory approval process to purchase the casino would have turned out the same way as did PokerStars’ application to partner with Resorts — not completely denied, but not approved either.
In any event, that won’t be the last of PokerStars’ attempts to set foot in the U.S. market. Hollreiser further stated that the company “will continue to pursue our goals and remain confident that we will have a strong presence and positive economic impact in the American market in 2014, whether that is in New Jersey or another state seeking the benefits of being home to a world-class online gaming company.”