Judge Temporarily Restores PokerStars Deal for the ACC

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Monday, May 6th, 2013 | Written by Shane Larson

PokerStars’ attempt to purchase an Atlantic City casino took a detour through a New Jersey courtroom today when the online poker site filed suit against the Atlantic Club Casino – the very casino PokerStars has been in negotiations to purchase over the last six months.

For those who haven’t been following the story, here’s a quick timeline of events so far:

In December of 2012 we first started hearing reports that PokerStars and the ACC were in negotiations
PokerStars announced a tentative deal had been reached in January 2013.
After months of delays, PokerStars announced that their temporary license application had been completed and submitted in April 2013.
In late April 2013 the ACC issues a statement saying the deal has been terminated.
On May 6th, 2013, PokerStars files suit against the ACC in a New Jersey court.
On the same day a judge granted PokerStars’ request for a TRO (temporary restraining order) that prevents the ACC from pursuing another sale.

Quite the series of events. So, as of right now, the Atlantic Club Casino is blocked from pursuing any other sale or deal other than the agreement with PokerStars.

Note that this is not the same as saying that the deal is “back on” – think of it more as a pause button than a play button.

PokerStars wants to purchase the Atlantic Club Casino in order to have a shot at securing an operator’s license in the New Jersey online gambling market. As NJ regulations limit applications to the pool of existing casinos, purchasing a casino is essentially the only route PokerStars has to an online gambling license in New Jersey.

Approval in New Jersey would also help with approval in other states considering online gambling, such as Pennsylvania.

Nature of the lawsuit

The complaint filed by PokerStars against the Atlantic Club Casino alleges a number of things, but the basic idea is that the Atlantic Club Casino acted as if a deal was in progress only to back out on PokerStars via a questionable technicality in the contract between the two parties. PokerStars contests the legality of the move on a number of levels, with the primary argument appearing to be that PokerStars has already paid an amount quite close to the total purchase price in advance payments to the ACC.

As for the motivation of the Atlantic Club Casino for backing out of the deal at something like the last minute, that remains left only to speculation until additional information emerges. Right now, those in the know seem to be leaning toward a theory that involves a competing purchaser for the Atlantic Club Casino. Others have seen the hand of the American Gaming Association, an industry trade group that filed a brief opposing PokerStars’ entrance. But it’s unclear exactly what role the AGA could have played, or what their ultimate end game is if they are somehow involved.

The next step for PokerStars and the ACC

We won’t have to wait a terribly long time for at least some sort of resolution. The restraining order signed today effectively puts the deal back on track, pending a hearing on the 17th of May. Unless the Atlantic Club Casino and PokerStars reach an agreement before that date arrives, there’s a good chance we’ll be seeing even more of the dirty laundry surrounding this deal aired for all to examine.