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NJ Judge Hearing PokerStars Dispute With Atlantic Club

24 May 2013 by Devon Chappell

In an increasingly bitter dispute that has been developing in recent months, a New Jersey judge has decided to hear the argument taking place between PokerStars (the world’s largest online poker site) and the Atlantic Club Casino Hotel, which Poker Stars is seeking to purchase.

PokerStars parent company, The Rational Group, was able to obtain a temporary restraining order on May 6, prohibiting any other company from buying the Atlantic City casino. But according to the Atlantic Club Casino Hotel, the deal to sell itself to PokerStars is no longer in effect.

PokerStars vehemently disagrees. The online gaming poker room insists it has already given the Atlantic City casino $11 million of the $15 million purchase price. The large down-payment was to keep the casino in operation during what Atlantic City is witnessing to be very tough times stemming from Hurricane Sandy (among other things) last October.

Why would PokerStars want to buy this casino in the first place you ask? Back in February, many of you know that New Jersey legalized online gambling. And purchasing an Atlantic City casino would effectively provide PokerStars’ parent, The Rational Group, a platform for launching PokerStars in the Garden State, where a lucrative online gambling hub is now burgeoning.

When New jersey Governor, Chris Christie, signed legislation into law making online casino gaming legal, many stipulations were added, including one that gives land-based Atlantic City casinos the right to launch online casinos. Consequently, once PokerStars (or another approved online casino) owns a land-based casino, it can legally launch the online site and be open for business once all stipulations and licensing agreements have been completed.

While The Rational Group hasn’t had have any real trouble gaining the State’s approval for its purchase of the Atlantic Club Casino Hotel, according to the casino, the deal is dead. Details surrounding this development will most likely become available once the hearing is over and the judge has heard both arguments.

At this time, we can only speculate the reasons for Atlantic Club Casino’s decision to pull out of the deal, which was in motion before Christie even signed any paperwork legalizing online poker and gambling in New Jersey. It was a preemptive move on PokerStars part due to the fact that legalization was looking like a no brainer. In other words, it was a good bet on the part of PokerStars.

Atlantic City was dealt a huge blow when Sandy rolled in – and many casinos, the Atlantic Club Casino Hotel included, started to bleed cash. While some of the big name casinos and hotels may have had a bit more padding, the Atlantic Club Casino Hotel found itself in need of a life raft. Most all of Atlantic City, however, was waiting with baited breath for Governor Christie to finalize the legalization of online gaming. Bringing online casino revenue into a state where its major revenue generator (Atlantic City) was failing, seemed like the logical answer. With an already liberated land-based gambling industry, why not get it together and legalize gaming online as well?

So then, what has changed between the casino and the poker room? Did the Atlantic Club Casino hotel suddenly win the lottery and erase its major losses and debt? Is there another internet endeavor on the horizon with another? It could be anybody’s guess. We will find out shortly. Stay tuned.

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