The parent company of online poker outfit PokerStars has filed an appeal of the New Jersey Superior Court ruling that killed Stars’ deal to buy the Atlantic Club Casino Hotel in Atlantic City. On May 17, Judge Raymond Batten ruled that Stars’ failure to obtain licensing approval from New Jersey gaming regulators within the timeline specified in the purchase agreement entitled the Atlantic Club’s owners to cancel the deal and keep the $11m Stars had already advanced them. Stars intended to use the Atlantic Club’s casino license as its springboard to launch operations in New Jersey’s upcoming regulated online gambling market.
Following last month’s ruling, Stars spokesman Eric Hollreiser stated that Stars remained “committed to New Jersey.” Now, in a 34-page brief viewed by the Press of Atlantic City, attorneys for the Rational Group argue that Batten “misconstrued” the timeline specified in the Atlantic Club purchase agreement. Stars had argued in court that the timeline was not a fixed date but was predicated on how long it took New Jersey regulators to make a decision on Stars’ license application. Rational argues that Batten’s decision effectively ended the regulators’ interest in finishing the vetting process. Rational also says Batten “improperly considered” testimony from Atlantic Club witnesses and relied on documents that were never formally introduced as evidence.
Rational’s appeal is the latest development in what has been an interesting week in New Jersey’s nascent online gambling market. On Wednesday, PokerStars CEO Mark Scheinberg reached a $50m settlement with the US Department of Justice to settle forfeiture claims stemming from the Black Friday indictments against Stars. On Thursday, word came that Atlantic City casino operators had been given a June 29 deadline to declare their online gambling technology partnerships or face the possibility of missing out on the regulated online gambling regime’s Nov. 16 launch.
It’s tempting to speculate whether Stars really believes it has a shot of winning on appeal, or whether it just figures it has little to lose. Either way, it appears intent on at least attempting to throw a legal monkey wrench into the Atlantic Club’s ability to flog itself to other buyers (and the clock is ticking). It seems that on the day that Stars dealt its milestone 100 billionth hand, Stars was also set on righting a deal gone wrong.