Legal wrangling continued in PokerStars’ bid to purchase the Atlantic Club as the casino filed a brief in response to PokerStars’ request for appellate review.
The latest filing by Atlantic Club lawyers pointed out that PokerStars was fully aware of the agreements stipulated to in the contract, including the requirement that a casino license be secured by April 26 or either party was free to terminate the contract. Judge Raymond Batten made the same determination in his ruling, which PokerStars hopes to be overturned by the court of appeals.
PokerStars was aiming to enter the U.S. online poker market by purchasing the New Jersey casino for the ridiculously low price of $15 million. An agreement between the parties was brokered in December. But the licensing process ran into a snag when state gaming regulators deemed PokerStars’ application to be incomplete upon its initial submission. The leading poker site was forced to resubmit its application.
That application was found to be acceptable on April 10, which started the clock ticking on a 120-day investigative and licensing process. A little more than two weeks later, the Atlantic Club terminated the agreement pursuant to a clause that allowed them to do so. PokerStars argued that the date on which licensing was due was not set in stone and delays in licensing could not be foreseen.
PokerStars also argues that it has already paid $11 million of the purchase price in $750,000 weekly installments since late last year. That matters not, the Atlantic Club claims, because PokerStars failed to receive state authorization within the agreed upon time. And furthermore, casino attorneys believe PokerStars will have a difficult time in being approved by gaming officials based on their past history, Bloomberg reported. That history includes continuing to operate in the U.S. market following passage of the UIGEA in 2006.
The parties made the deal before online gambling was legalized in the Garden State. That came about in February when Governor Chris Christie signed a bill regulating Internet gambling after state lawmakers adhered to his conditional requirements of alloting more funds toward gambling addiction programs and putting a 10-year limit on the statute.
Now that online gambling is legal in New Jersey, the value of the Atlantic Club has likely increased substantially. The casino owners would like to squeeze more out of their investment than the paltry $15 million deal signed with PokerStars.
PokerStars believes that it is being wrongly maligned for its UIGEA transgressions. The company cites its outstanding relationship with governing bodies throughout the world. Those solid relationships in foreign jurisdictions may be well and fine, but U.S. licensing authorities may see things a bit differently as evidenced by bad actor statutes included in U.S. online gambling regulations. However, New Jersey has no such bad actor language in its legislation.