PokerStars lost its bet on the Atlantic Club casino in New Jersey. Judge Raymond Batten ruled that the Atlantic City casino is free to accept purchase bids from other companies in its fight to avoid bankruptcy and foreclosure. The ruling is a significant setback for PokerStars, which hoped to use the Atlantic Club as a launch pad for the newly legalized online gambling market in New Jersey.
PokerStars submitted a purchase bid for the Atlantic Club earlier in the year as New Jersey lawmakers were reviewing an online gambling bill. The bill includes a clause that says all online gambling sites must house their servers within Atlantic City casinos, which means operators must either partner with or own a piece of a brick and mortar casino on the New Jersey boardwalk. PokerStars paid $750,000 a week to keep the Atlantic Club open, after the current owners opted to file for bankruptcy, and have now spent $11 million of the $15 million purchase bid.
The agreement stated that PokerStars must acquire a casino license with the New Jersey Division of Gaming Enforcement by April 26, or the deal was off the table. When the deadline passed and regulators stated the review would last until August, the Atlantic Club rejected PokerStars. The online poker site took its case to court to prevent losing its $11 million and rights to the casino, where Judge Batten ordered a temporary restraining order two weeks ago to prevent the Atlantic Club from accepting other offers while the case was in review.
However, Judge Batten decided that the clauses in the purchase bid stand up under New Jersey law, and sided with the Atlantic Club on May 17. The judge ruled that the arguments from PokerStars were attempts to “rewrite the contract,” and that the Atlantic Club is entitled to keep the $11 million already invested by PokerStars. Batten determined that the remaining $4 million, which the Atlantic Club argues is part of a termination fee, will require further legal review.
Following the ruling, PokerStars spokesperson Eric Hollreiser says the company will review the judge’s decision before deciding on whether to launch an appeal. But Hollreiser stressed that PokerStars remains committed to entering the lucrative New Jersey market.