BUSINESS

Atlantic Club Casino Hotel to file for Chapter 11, go on the auction block

TAGs: Atlantic City, atlantic club casino hotel, Golden Nugget, New Jersey Online Gambling

atlantic-club-bankruptcyAtlantic City’s Atlantic Club Casino Hotel intends to file for Chapter 11 bankruptcy protection this week, with an eye towards putting itself up for auction. Sources told the Wall Street Journal that the filing could come as early as Wednesday night as the New Jersey gaming joint seeks protection from its many creditors. The casino is owned by private equity firm Colony Capital LLC, and the bankruptcy filing will be handled by the legal firm of Cole Schotz. A hedge fund has reportedly provided $15m in bankruptcy financing, an amount that could start the bidding when the auction commences.

The word ‘karma’ will likely cross the minds of online poker players, who saw the Atlantic Club back out of a deal to sell the casino to PokerStars earlier this year, while keeping the $11m the online poker company had already advanced the casino in good faith. (Stars is taking legal steps to recoup the advance.) At the time, it was widely presumed that New Jersey’s progress toward a regulated online gambling market – which wasn’t yet assured when the Stars’ deal was struck in late 2012 – was the reason for the Atlantic Club’s change of heart. Apparently, the already struggling casino‘s owners believed they could strike a better deal on the open market. Apparently not. Stars, meanwhile, has gone on to ink a new partnership with Resorts Atlantic City and is currently awaiting word as to whether New Jersey regulators will approve its gaming license application.

The bankruptcy news goes a long way toward explaining why the Atlantic Club is one of only two AC casinos yet to ink an online gambling partnership. The other casino, Revel, only just emerged from bankruptcy protection in May of this year, so the common thread here is obvious. In October, an investment group led by Philadelphia real estate magnate Kevin Flynn announced it was looking to buy into the AC casino market, and had “not eliminated the Atlantic Club.” In August, UK gambling outfit 2UP Gaming claimed it and its mystery Asian investment backer were working on a “final agreement” to purchase an AC casino, although nothing’s been heard from the company since.

Meanwhile, the folks behind Atlantic City’s Golden Nugget casino are preparing to launch the real-money version of their Goldennuggetpoker.com site in New Jersey. The latest preparations involve the shifting of its free-play offering to a new domain, Goldennuggetpoker.net. The Nugget, which has hitched its online hopes to software from Bally Technologies and Amaya Gaming, was the second AC casino to receive its online gambling permit last month.

Not to be outdone, the Tropicana Casino – which has an online partnership with UK operator Gamesys Limited – has announced it’s accepting registrations to participate in the ‘soft launch’ of its online site. The official launch of New Jersey’s online gambling market is set for Nov. 26, but this will be preceded by a five-day test period to ensure no catastrophic glitches occur while real-money’s on the line. Players can visit Tropicana.net to apply for online gambling ‘first’ bragging rights.

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