There appears to be a hitch in the plans by PokerStars’ parent company to acquire the struggling Atlantic Club Casino Hotel. In December, the Rational Group announced it had struck a deal to acquire the Atlantic City gaming joint from its owners, the Colony Capital investment fund. The deal was seen as a giant win for all sides, as the Atlantic Club was teetering on the brink of insolvency, with thousands of workers facing the unemployment line. Meanwhile, PokerStars would gain a toehold in New Jersey’s nascent online gambling market, participation in which having been restricted to the state’s brick-and-mortar casino licensees. In fact, the only people who seemed opposed to the notion were Caesars Entertainment (by way of the American Gaming Association).
In January, Rational filed an application for an interim casino license with the New Jersey Division of Gaming Enforcement (DGE), although it was only on April 10 that the DGE deemed Rational’s paperwork to be complete, and a final decision is not expected until early August. According to the Wall Street Journal’s Alexandra Berzon, who originally broke the news of Rational’s casino bid in December, that delay may have proved fatal.
Berzon reported on Tuesday that the deal to acquire the Atlantic Club had established an April 26 deadline for Rational’s casino license bid to receive the blessing of New Jersey regulators, and it was unclear whether the two parties had entertained discussions about extending the agreement. The April deadline roughly corresponds to the end of the 120-day wait period Rational would have expected had its casino license application been deemed complete when it was first filed in mid-January. It seems highly dubious that Colony Capital wouldn’t have been kept apprised of Rational’s paperwork delay, which makes the absence of a deal extension puzzling, especially since the Atlantic Club’s financial situation can scarcely have improved in the interim.
No party connected with the deal has commented publicly on the WSJ story. Sources told NorthJersey.com’s John Brennan that the deal was ‘in flux.” Speculation has it that Colony Capital could be using the licensing delay to compel Rational to up its offer. After all, the original deal was established well prior to New Jersey Gov. Chris Christie signing the state’s online gambling legislation, so the Atlantic Club is arguably now worth more to Rational (or possibly one of PokerStars’ European-based competitors). Could PokerStars find itself in a bidding war on the Jersey shore?
