Plans by a British Internet gambling company to buy an Atlantic City casino reflect its confidence in the local market.
Vince Crandon, who is overseeing negotiations for the casino deal, was very upbeat when discussing the possible sale.
“No matter what you say about it, Atlantic City is still a $3 billion market,” he said.
Crandon, managing director of the financial firm MidOil USA, is representing an investment group that includes 2UP Gaming PLC, a London-based Internet gambling outfit. Asian financing is also part of a $330 million funding package to buy the yet-to-be-disclosed Boardwalk casino, refurbish it and rebrand it.
“The money’s in the bank. It’s cleared. We have approval to use the funds,” Crandon said, adding that the casino will be announced when the sale agreement is finalized.
The pending deal signals new interest in the East Coast’s oldest casino market. Atlantic City has seen fierce competition from casinos in surrounding states in recent years, and properties have been changing hands at only a fraction of their original construction cost or their pre-recession value.
Israel Posner, a casino analyst at The Richard Stockton College of New Jersey, believes the combination of an improving national economy and the advent of Internet gambling in New Jersey is nudging new buyers toward Atlantic City. More deals are likely to follow 2UP’s pending purchase, he predicted.
“I’ve been waiting for quite a while for the local market to heat up,” said Posner, executive director of Stockton’s Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism. “I’ve been telling people that this is the dawn of a new gaming industry and a new form of entertainment.”
Crandon envisions the casino his group plans to buy as a hybrid form of entertainment that melds high-tech Internet wagering with traditional land-based gambling operations. Although some have speculated that Internet gambling may cannibalize business from brick-and-mortar casinos, Crandon sees both activities as complementary.
“Online gaming and brick-and-mortar casinos go hand in hand,” he said. “We don’t see Internet gambling taking people away.”
Crandon also is promising to boost the local jobs market. He said there are plans to hire 1,000 workers once 2UP and MidOil buy the casino. Most of the new employees would be connected to 2UP’s Internet gambling operations.
Internet gambling is scheduled to begin in New Jersey on Nov. 26. Atlantic City’s 12 casino hotels are lining up partnerships with Web companies to offer online wagering on slot machines and table games.
Posner characterized the prospect of Internet gambling as “novel and exciting,” but noted that the Atlantic City gambling scene will be dramatically transformed from its traditional image.
“It’s not a 75-year-old standing there playing the slot machines,” he said.
2UP Gaming, which operates online gambling overseas, views Atlantic City as its launching pad for Internet wagering in the U.S. Crandon, who was part of the lobbying efforts for New Jersey’s Internet gambling law, believes New Jersey and Nevada will link up next year to create a multistate online wagering system.
“Looking at it from a global standpoint, we’re already doing this throughout the world, except for the United States,” Crandon said of 2UP’s operations. “The decision was made to look at the potential of the Atlantic City market. We are looking aggressively at how we could domicile our technology into it.”
2UP Gaming is a publicly traded company of leisure and entertainment products. It operates the website 2UP.com, which offers an array of online betting options, including slot machines and table games.
In what Crandon described as a unique feature, 2UP’s website combines real-life dealers with online wagering. Humans deal the cards, but Crandon stressed that the game is controlled by computer technology to prevent errors.
“I see the opportunity for Internet gaming to be done properly in the United States. The live-dealer technology is a game-changer,” he said. “I can see a dealer dealing to me on the computer screen and speaking to me and interacting with me in real time. The crux of our system — the ability to offer fair play — is a cut above other Internet gaming systems.”
Crandon said 2UP has no interest in sharing its technology with other casinos. Under New Jersey law, 2UP would have to either own an Atlantic City casino or partner with one to be part of the Internet gambling action.
Before deciding to buy an existing casino, Crandon’s group played with the idea of building a brand-new casino. Designs were nearly completed for a smaller, boutique-style casino that would have started with just 250 hotel rooms but could have been expanded later, Crandon said.
However, plans for developing a new casino have been shelved in favor of purchasing an existing property. With Internet gambling coming to New Jersey in the fall, Crandon said there is simply no time to waste.
“Our priority is to buy. We want to get into the market now. We don’t want to wait two years,” he said.
Crandon is anxious to return to a city he visited as a child. He has fond memories of his parents taking him to Atlantic City’s Steel Pier amusement park while he was growing up in the 1960s. Crandon, 51, now lives in Mahwah, Bergen County.
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