An Atlantic County Superior Court judge ruled on Friday that Poker Stars cannot keep its claim on the Atlantic City Casino hotel and resort which it is seeking to purchase. The $15 million deal has now been terminated and the owners of the hotel, Colony Capital LLC, are free to seek another buyer.
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Spokespeople for both Poker Stars’ parent company, Rational Group, as well as the Altanticy City Casino, confirmed the judge’s ruling. “We are reviewing today’s ruling,” said a spokesman for Rational Group, Eric Hollreiser said in an e-mailed statement. “We remain committed to New Jersey and to contributing to its economy.”
The deal that was signed between Rational Group and Colony Capital LLC was conditionally sealed with an $11 million payout by the buyer so that the hotel could continue operations until the Rational Group received permission to operate a hotel in Atlantic City. Rational agreed to pay $15 million to Colony Capital, as well as take over a $30 million unpaid pension fund debt.
The problems began when New Jersey’s gambling authorities announced that they would take longer than usual to make a decision about Rational Group’s license, whereby Colony Capital jumped at the opportunity to use the April 26th termination date as a reason to end the contract – no doubt hopeful that they will be able to find a new buyer now that online gambling has become a reality in the state.
“We are pleased that the New Jersey court has dissolved the restraints it entered on May 6,” said the Atlantic Club Chief Operating Officer Michael Frawley . “We are now free to build on the tremendous opportunity provided by online gaming.”
Colony Capital has also asked for the remaining $4 million as a termination fee from Poker Stars.
Poker Stars was hoping to use the Atlantic City hotel as a foothold into the growing US online gambling industry.