Monday, July 01, 2013 8:11 pm
NJ appellate court denies PokerStars appeal
By BRUCE SHIPKOWSKIAssociated Press
In a decision made public Monday night, the court sided with The Atlantic Club in its battle with PokerStars. The ruling upheld a lower court decision issued last month.
The Atlantic Club canceled a deal for the PokerStars website to buy the casino when the online giant couldn't get preliminary ownership approval from New Jersey casino regulators in time.
PokerStars' Isle of Man-based parent company, The Rational Group, claimed the judge made several errors. It also argued that its $15 million purchase deal should be reinstated, noting it has already given The Atlantic Club $11 million to help the once-struggling casino get through the slow winter months.
Michael Frawley, The Atlantic Club's chief operating officer, said the casino was "obviously very pleased with the appellate court ruling.
"Our intentions have, and will continue to be focused on the aggressive pursuit of New Jersey's emerging online gaming opportunities," Frawley said.
An email seeking comment from a PokerStars spokesman was not immediately returned Monday night.
The parties signed a contract Dec. 24 for The Rational Group to buy The Atlantic Club for $15 million, by far the lowest price ever paid for a casino in New Jersey. But it also promised to fund a potential $32 million shortfall in the employee pension account were the casino to close or withdraw from a union contract. It also had discussed investing an additional $20 million to $40 million into the property once the deal was completed.
Atlantic Club lawyers said it became clear this year that Rational would have a difficult time getting a casino license in New Jersey.
The Rational Group 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. Rational admitted no wrongdoing and said it is in good standing with governments around the world. Still, its recent history was expected to pose a hurdle to the company's efforts to win a New Jersey casino license.