Key Takeaways
  • Rational Group has officially announced an agreement to purchase of The Atlantic Club Casino Hotel.
  • The deal is pending approval for NJ authorities.
  • Approval could take up to 120 days.

Rational Group, parent company of PokerStars, has officially announced an agreement to purchase of The Atlantic Club Casino Hotel located on the Atlantic City Boardwalk.

Eric Hollreiser, Rational Group head of corporate communications, in a statement sent to pokerfuse, indicated that the deal is contingent upon “the grant of an Interim Casino Authorization by the relevant New Jersey authorities.”

According to a report by Donald Wittkowski of The Press of Atlantic City, the New Jersey Division of Gaming Enforcement “has up to 90 days to conduct its investigation and file a report with the Casino Control Commission.” The commission then has up to 30 days to conduct the hearing and make a final decision.

The Atlantic Club acquisition will “secure up to 2,000 jobs and maintain the economic benefits the casino brings to New Jersey,” pokerfuse was told. During the interim period, the casino “will operate as normal under current management, who will be retained following completion of the acquisition.”

News that the online poker giant was in “advanced talks” to acquire the troubled casino property emerged last month just after a New Jersey Assembly Committee resurrected a bill to authorize online gambling in the state.

The bill has since eventually passed both arms of the New Jersey legislature and is currently awaiting Governor Christie’s signature.

The Atlantic Club Casino, once the pride of casino mogul Steve Wynn, was built in 1980, just four years after the legalization of gambling in Atlantic City. It quickly established itself as the boardwalk’s premiere casino.

But the property fell on hard times through the course of several ownership changes. In 2012, the casino assumed its current name and focused its efforts on attracting locals.

A physical presence in New Jersey is just the latest of such kind for online market leader PokerStars.

In October 2012, it announced an investment in the iconic Hippodrome casino in London. It is refurbishing and rebranding the poker room, and will operate Hippodrome’s online poker presence.

Two month’s later, it announced the addition of a poker room at the Casino Gran Madrid in Spain. It has also previously partnered with the Grand Waldo in Macau.

Bad Actors

The bill on the New Jersey Governor’s desk represents the latest attempt to accommodate the stakeholders in New Jersey and also please the Governor, who vetoed similar legislation in 2011.

Of particular relevance is one change: The removal of language known as a “bad actor” provision. The absence of this language from the current bill, present in previous versions, means that PokerStars’ past history of accepting wagers from Americans would not restrict its ability to obtain an online gaming license in the state.

Such provisions have appeared in other proposed US legislation, including the draft federal bill commonly known as the Reid/Kyl. Though the bill was never formally introduced, a leaked summary and subsequent draft contained language restricting operators and their assets from entering the online gaming market if they continued to take wagers from Americans after the enactment of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.

The constitutionality of such provisions have been openly challenged. Former United States Solicitor General and current Georgetown University law professor Paul Clement, in a prepared memorandum at the request of the Poker Players Alliance, opined that such language created a “statutory presumption of guilt.”

“Defining past conduct as wrongdoing and then imposing punishment for that conduct is exactly what the Constitution’s prohibition on bills of attainder forbids,” Clement wrote.

He also identified the December 31, 2006 cutoff date as being arbitrary and intended to “disfavor certain prior Internet poker providers “noting that UIGEA was passed in October of 2006 but not “fully implemented until years later.”