Another chapter in the saga of the Atlantic Club has begun as the financially-strapped casino filed for bankruptcy protection on Wednesday.
The announcement did not come as a total surprise as reports of the casino’s revenue struggles have been reported at length for quite some time. What is surprising is that the owners have not yet found a buyer considering that New Jersey poker online for real money is set to launch in less than three weeks.
One would think that potential suitors would be lining up at the Atlantic Club door considering the casino is one of only a dozen that have the option of securing an Internet gambling permit as an operator. PokerStars did knock on that door back in December of 2012 and a deal was brokered for the world’s heaviest-trafficked online poker site to purchase the beleaguered casino for only $15 million.
But the Atlantic Club owners, Colony Capital LLC, were able to back out of the deal when PokerStars did not secure casino license authorization by the agreed upon date. Not only did the casino back out, they kept $11 million that PokerStars paid to keep the casino afloat.
A ‘For Sale’ sign went up again following the failed purchase attempt by PokerStars, but no takers have emerged. In hindsight, it appears that the Atlantic Club should not have nixed the deal with PokerStars. In any event, what’s done is done and now the casino will go through bankruptcy proceedings in order to keep its creditors at bay.
PokerStars has since moved on from the failed acquisition. The parties may still meet in New Jersey courtrooms as PokerStars attempts to recoup the $11 million through the filing of legal briefs. However, PokerStars is now courting a new casino by entering into a partnership agreement with Resorts.
The entire online poker industry eagerly awaits the New Jersey Division of Gaming Enforcement’s decision on whether or not PokerStars will be granted a license to operate in tandem with the Resorts Casino. At issue is whether PokerStars’ past actions of remaining in the U.S. market after enactment of the UIGEA is such an egregious offense that would warrant possible punishment in the form of a license denial.
PokerStars’ reputation throughout the rest of the world is outstanding. In fact, parent company the Rational Group has won awards as being one of the best places at which to work. But other gaming companies hoping to make their presence felt in the newly-regulated U.S. online gambling market are typically of the mind that PokerStars should be sanctioned for allegedly flouting the UIGEA.
New Jersey is progressing with its online gambling launch date of November 26. It appears that the Atlantic Club and the Revel, which also went through bankruptcy earlier in 2013, will not be among the 12 casinos vying for an operator’s permit. But the other 10 casinos have made their intentions known. Five have already been approved by DGE regulators. The five still awaiting official approval are Resorts and four Atlantic City casinos under ownership of Caesars.
As a result of the bankruptcy filing, the Atlantic Club will reportedly be on the auction block in due course. The casino will continue operations as the court sorts out its assets and liabilities.