New Jersey Internet gambling bill could spur sale of Atlantic Club casino - pressofAtlanticCity.com: Breaking News

New Jersey Internet gambling bill could spur sale of Atlantic Club casino - pressofAtlanticCity.com: Breaking News

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New Jersey Internet gambling bill could spur sale of Atlantic Club casino

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Posted: Thursday, December 20, 2012 12:00 am

An Internet gambling bill being voted on by the state Senate today includes a provision that makes the sale of The Atlantic Club to PokerStars or similar company more attractive, according to lawmakers.

Since being introduced earlier this year, the bill authorizing Internet gambling has been revised multiple times, including earlier this month when a substitute bill was introduced with a new section allowing offshore companies to apply for a license, replacing one that essentially would have barred many of them.

“The original amendment, which was taken out, would have barred PokerStars from taking over The Atlantic Club,” said Sen. Raymond Lesniak, D-Union, one of the bill’s sponsors.

Representatives of Poker Stars — which is in negotiation to buy The Atlantic Club for less than $50 million, according to the Wall Street Journal — participated in a telephone call earlier this year, along with an executive from The Atlantic Club, during which they made a case for the bill substitution, according to Sen. Jim Whelan, D-Atlantic, who was on the call.

Whelan, who also heard from casino representatives opposed to the introduction of PokerStars into the Atlantic City market, said he proposed language now in the bill allowing all companies to apply for a license but leaving the decision on approving the application to regulators, directing them to consult with the U.S. Department of Justice. Regulators, who conduct investigation of applicants, would be in a better position to make a decision on who should be issued a license rather than having legislators decide, Whelan said.

“PokerStars is one, but there are others I’m told,” Whelan said. “My position is everybody should be able to apply.”

Barbara Murphy, a spokeswoman for The Atlantic Club, declined to comment on any potential sale of the casino or talks it may be in with PokerStars. Regulators from the Division of Gaming Enforcement and Casino Control Commission said Wednesday PokerStars has not filed any documents requesting a casino license.

Based on the Isle of Man in the British Isles, PokerStars is one of the largest online gambling companies in the world. Earlier this year, the company settled with the United States on money laundering charges, agreeing to pay the government $547 million over three years. Under the settlement, the company, which had its U.S. operations shut down last year as part of a crackdown on illegal Internet gambling websites, admitted no wrongdoing, liability or guilt and can re-enter the U.S. market in jurisdictions where online poker is legal.

If the bill being championed by Lesniak and Whelan is approved, New Jersey will join a growing list of states legalizing Internet gambling, such as Nevada and more recently Delaware. Offering Internet gambling will be important to the future of Atlantic City, setting it apart from other casino markets, according to lawmakers and analysts.

“We view Atlantic City as the strongest,” said Chad Beynon, an analyst with Macquarie Capital in New York, who believes the state’s population and proximity to millions of people makes it particularly attractive for Internet gambling.

While it will bring new gambling revenue to Atlantic City, the addition only will be beneficial if it attracts a new market rather than taking from visitors coming to the resort, Beynon said.

“If it removes traffic to Atlantic City, that would detrimental to the smaller guy,” he said of the smaller casinos in the city.

But Lesniak said he believes the Internet gambling clientele are those who wouldn’t come to Atlantic City anyway and prefer playing in the comfort of their own home. The legislation, if passed by the Senate, also must be signed into law by Gov. Chris Christie, who vetoed a similar bill last year. The governor’s office has declined to comment on this latest version.

Unlike gambling revenue, which is taxed at 8 percent, online gambling would be taxed at 10 percent of gross gambling revenues annually. All equipment also must be located in Atlantic City with the exception of backup and other items. Only Atlantic City casinos or its “gaming affiliate” issued a permit for conducting Internet gambling can offer its premises up for placing wagers.

“Internet wagering must be implemented in a lawful, appropriate, thoughtful and prudent fashion,” Tony Rodio, president of the Casino Association of New Jersey, said in a statement. “We believe that the pending legislation goes a long way towards fulfilling those objectives.”

Buying and receiving approval to operate an Atlantic City-based casino would provide an entryway to a larger U.S. gambling market for PokerStars, Beynon said. But it is far from being a closed deal, he said.

“How many deals have fallen through in Atlantic City?” he asked.

Contact Hoa Nguyen:

609-272-7203

HNguyen@pressofac.com

© 2014 pressofAtlanticCity.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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