By WAYNE PARRY
2013-01-16 08:55 AM
Rational Group US Holdings, the parent company of PokerStars and Full Tilt Poker, is asking New Jersey casino regulators for permission to buy the Atlantic Club Casino Hotel for an undisclosed amount. If approved, the deal would mark the first purchase of an Atlantic City casino by an Internet gambling company.
The company, based in Isle of Man, promises to invest in the Atlantic City casino to help the struggling seaside gambling resort.
"Rational US is a willing and enthusiastic prospective purchaser, and it intends to improve the financial viability of the property, and therefore the offerings available in Atlantic City," the firm wrote in its application to New Jersey casino regulators. "The purchase will improve the overall economic and competitive conditions of Atlantic City and the state of New Jersey, as the current owner of the company has, for a considerable period of time, been marketing the property for sale."
The company's application to New Jersey regulators was first reported by The Press of Atlantic City. A purchase agreement was reached Dec. 21.
In a joint statement, Michael Frawley, the casino's chief operating officer, and Eric Hollreiser, a spokesman for Rational, confirmed the proposed sale.
"The acquisition of The Atlantic Club Casino Hotel will secure up to 2,000 jobs and maintain the economic benefits the casino brings to New Jersey," their statement read. "During this interim period, the Atlantic Club Casino Hotel will operate as normal under current management, which will be retained following completion of the acquisition."
Rational would buy the casino from Resorts International Holdings, an affiliate of Los Angeles-based hedge fund Colony Capital LLC. Colony has owned the casino since 2005 as it has struggled badly in Atlantic City's cutthroat market, which is suffering from increased competition from casinos in neighboring states.
The Atlantic Club ranks 10th out of Atlantic City's 12 casinos in terms of gambling revenue. It's take from gamblers declined by 11 percent last year, to $127.2 million. It posted a $13.6 million gross operating loss through the first nine months of last year.
The proposed deal will be scrutinized closely. State lawmakers have passed a bill that would authorize Internet gambling, but Republican Gov. Chris Christie hasn't acted on it.
Last year, PokerStars paid $547 million to settle money laundering charges from a U.S. government crackdown on illegal Internet gambling. It admitted no wrongdoing and is allowed to operate in states where online gambling is legal.
Rational is seeking from the New Jersey Division of Gaming Enforcement interim casino authorization, which is preliminary approval to move forward with the purchase. It would then need approval from the New Jersey Casino Control Commission to complete the purchase.
On its website, Rational describes PokerStars as the world's largest online poker site, with more than 50 million registered members. Since December 2001, the company says, more than 85 billion hands have been played on its site.