Online poker giant, PokerStars is looking to re-enter the US market by purchasing the struggling Atlantic City land based casino.
In a move that is a first for the poker world, top online poker site PokerStars is making moves to purchase the struggling land-based casino in Atlantic City.
The Atlantic Club, situated on the Boardwalk in New Jersey’s casino city, Atlantic City, has been struggling financially for a while. Should this deal go through it would be a life saver for the brick-and-mortar casino and would the first time that an online poker room has purchased a physical casino in the United States. The Atlantic Club casino has been running at a loss and posted a $13.6 million operating loss for most of 2012.
The move by PokerStars to purchase the Atlantic Club is an attempt to take advantage of a potential new state law that would allow land-based casinos to offer online gambling operations within a year. The move could also be seen as the first step back onto American soil after PokerStars was forced to shut down their operations in April 2011 by the Justice Department.
It will not all be smooth sailing for PokerStars back into the US market, even if this deal goes through. The online poker giant still needs to get their license approved from the Division of Gaming Enforcement and the Casino Control Commission. Both of these organizations are the ones that regulate Atlantic City’s gambling industry which is estimated to be worth $3 billion. Due to PokerStars previous tremulous history with the US authorities, the licensing request is not going to be a simple process.
PokerStars was one of the three online poker rooms that were targeted on “Black Friday” by the US Justice Department almost two years ago. After being forced out of the US market, PokerStars settled with the authorities for $731 million. Following the raid, Rational Group, which owns PokerStars, bought out Full Tilt Poker, another one of the three poker companies raided on Black Friday. Fult Tilt was PokerStars’ leading competitor before their US exit.
Rational Group is now heading the attempt to purchase the Atlantic Club and has requested an “interim casino authorization”, which is the primary step in taking ownership of the land-based casino. Regulators are performing their due diligence in the mean time and the Division of Gaming Enforcement then has 3 months to approve or deny the application. The Casino Control Commission can then take a further month to grant the license or not.