Stars' deal to buy New Jersey casino still alive
New Jersey court grants request for temporary restraining order preventing sellers from pulling out of agreement
PokerStars’ bid to acquire an Atlantic City casino could still succeed after the operator won a temporary restraining order blocking sellers Colony Capital from pulling out of the agreement.
The deal, worth around US$15m, appeared to have fallen through last week after the owner’s of the Atlantic Club Casino and Hotel announced it had been terminated “in accordance with its terms”. However Stars filed a lawsuit in the New Jersey Superior Court yesterday seeking to block Colony Capital from breaching the purchase agreement signed in December 2012.
Judge Raymond Batten granted the request for a temporary restraining order shortly after, meaning the deal is still on as long as Stars’ parent company Rational Group receives an interim casino licence from New Jersey’s regulator. The initial deal agreed in December reportedly stipulated a 30 April deadline for Stars to be licensed in order for the acquisition to proceed.
Rational Group spokesman Eric Hollreiser said yesterday’s legal action had been taken “protect Rational Group’s rights and interests” under the original agreement and reflects the company’s “desire to complete the acquisition of the Atlantic Club”. The company has invested $11m to date in keeping the ailing casino up and running.
“The Rational Group has funded Atlantic Club shortfalls throughout the winter season since October 2012 preventing its bankruptcy and the loss of over 1,800 jobs,” Hollreiser said in a statement. “The Rational Group remains entirely committed to resolving this situation, and to its investment in New Jersey, while it continues to diligently work on completing the required licensing process.”
The purchase would allow Stars, the world’s most popular online poker site, to gain a foothold in the New Jersey market which legalised several forms of online gambling in February. Its ability to obtain a licence has since been the subject of much debate, with the American Gaming Association (AGA) filing a petition to the New Jersey Division of Gaming Enforcement which argued that Stars “should not be found qualified” for a licence in the state.