PokerStars Wants to Save Deal to Buy Atlantic Club
The world’s largest online poker website is appealing a judge’s ruling that cost it the right to buy an Atlantic City casino.The PokerStars website’s parent company, The Rational Group, had a deal to buy The Atlantic Club Casino Hotel — and had already paid $11 million of that to keep it afloat during the winter. But a judge last month let the Atlantic Club out of that deal, ruling that a deadline for Rational to obtain preliminary approval from state authorities to own a casino had passed.
The Rational Group appealed that ruling this week.
“This is a matter of great public importance, to the Atlantic Club’s employees, to the highly regulated casino industry, to (state casino regulators) and to plaintiffs, who invested more than $11 million in the Atlantic Club in connection with the purchase agreement,” Rational wrote in its appeal.
It said the court contradicted the language of the state Casino Control Act and also said a submission on behalf of The Atlantic Club by retired Superior Court Judge Steven Perskie should not have been allowed to have been considered. Perskie is a former legislator who wrote most of the casino act.
PokerStars says Superior Court Judge Raymond Batten made several errors, including misinterpreting a time limit for getting the deal done. PokerStars says the 120-day deadline should have started from the day their application for state approval to run a casino was deemed complete, not from the date of the sale contract.
The judge said the contract clearly gave either party the right to end the deal if Rational had not obtained the state’s authorization by April 26. The company’s application for temporary authorization to own a casino was not deemed complete by state regulators until early April.
The parties signed a contract Dec. 24 for The Rational Group to buy The Atlantic Club for $15 million, by far the lowest price ever paid for a casino in New Jersey. But it also promised to fund a $32 million shortfall in the casino’s employee pension account, and had discussed investing an additional $20 million to $40 million into the property once the deal was completed.
Atlantic Club lawyers said it became clear this year that Rational would have a difficult time getting a casino license in New Jersey.
The Rational Group agreed last year to pay $547 million to the U.S. Justice Department and $184 million to poker players overseas to settle a case alleging money laundering, bank fraud and illegal gambling. Rational admits no wrongdoing and says it is in good standing with governments around the world. Still, its recent history was expected to pose a hurdle to the company’s efforts to win a New Jersey casino license.
In its appeal, Rational says The Atlantic Club knew of PokerStars history much earlier than the casino claims.
The Atlantic Club declined to comment Friday. A PokerStars spokesman would say only, “We remain committed to New Jersey and to contributing to its economy. ”
(Copyright 2013 by The Associated Press. All Rights Reserved.)