Resorts, PokerStars form partnership for Internet gambling - pressofAtlanticCity.com: Breaking News

Resorts, PokerStars form partnership for Internet gambling - pressofAtlanticCity.com: Breaking News

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Resorts, PokerStars form partnership for Internet gambling

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Posted: Wednesday, July 3, 2013 10:55 pm

Spurned by one Atlantic City casino, the world’s largest poker website is joining up with another casino to offer Internet gambling in New Jersey.

The alliance between PokerStars and Resorts Casino Hotel, announced Wednesday, comes two days after a New Jersey appeals court ruled against PokerStars in its bid to buy the Atlantic Club Casino Hotel.

PokerStars’ parent company, the Rational Group, had reached a tentative deal to buy the Atlantic Club for $15 million and use it as a platform for its New Jersey Internet gambling operations. However, the Atlantic Club pulled out of the deal, saying PokerStars failed to win regulatory approval in time to close the sale.

The Rational Group, based on the Isle of Man, responded with a New Jersey lawsuit seeking to complete the sale. A state appeals court ruled Monday that the Atlantic Club has the right to seek a new buyer even as litigation continues in the disputed deal. The decision upheld a lower-court ruling last month.

As that court drama plays out, PokerStars will now join with Resorts to offer Internet gambling. It was not immediately clear whether PokerStars might abandon its fight to buy the Atlantic Club in the wake of the partnership with Resorts. PokerStars spokesman Eric Hollreiser could not be reached for comment.

Atlantic City’s 12 casinos are busy lining up Web partners as they prepare to introduce online betting late this year on their slot machines and table games.

“This is another blue-chip partner for Resorts to complete a wonderful series of brands,” Morris Bailey, the casino’s majority owner, said of the partnership with PokerStars.

Mark Scheinberg, CEO of the Rational Group, said the deal links Atlantic City’s oldest casino with one of the giants of the online gambling industry.

“Resorts is a fantastic partner for us, and we are looking forward to launch PokerStars in the U.S. in association with the other quality brands Resorts has brought to Atlantic City,” Scheinberg said in a statement. “We are very happy to invest in New Jersey, and we are excited about building a successful relationship with Resorts.”

The agreement is pending approval by New Jersey regulatory authorities. Speculation has been building that PokerStars’ legal problems in the past would make it difficult for it to win a New Jersey casino license.

PokerStars agreed last year to pay $547 million to the U.S. Justice Department and $184 million to poker players overseas to settle a case alleging money laundering, bank fraud and illegal gambling. The company admitted no guilt or wrongdoing. The settlement opened the door for PokerStars to seek a license in U.S. casino markets where Internet gambling is legal.

The Atlantic Club canceled the deal for PokerStars to buy the casino when the company couldn’t get preliminary ownership approval from New Jersey casino regulators in time. Atlantic Club’s lawyers have said that PokerStars, ultimately, would find it hard getting licensed to buy the casino.

Rational Group’s proposed $15 million purchase price for the Atlantic Club would be the lowest amount ever paid for an Atlantic City casino. The company also discussed investing $20 million to $40 million in the casino to build Atlantic City’s largest poker room and other upgrades.

The Atlantic Club’s proposed purchase price reflects the slumping Atlantic City casino and real estate markets. It is only a fraction of what the Atlantic Club’s current owner, Colony Capital, paid for the casino in 2005, when it was still called the Atlantic City Hilton Casino Resort. The Hilton was valued at $513 million when it was packaged as part of Colony’s $1.24 billion deal for four casinos in New Jersey, Mississippi and Indiana.

Contact Donald Wittkowski:

609-272-7258

DWittkowski@pressofac.com

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

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