Rational Group U.S. Holdings, the parent company of PokerStars and Full Tilt Poker, is seeking permission from New Jersey casino regulators to purchase the Atlantic Club casino hotel for an undisclosed amount. If the deal is approved, it would be the internet gambling company’s first purchase of the Atlantic City casino.
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“Reasonable America is a willing and passionate prospective buyer, and we want to improve the financial feasibility of the property and the products available in Atlantic City,” the company said in an application to the New Jersey casino regulator. “This purchase will improve the overall economic and competitive conditions in Atlantic City and the state of New Jersey, as our current owners have been marketing the property for sale for a considerable period of time.”
The company’s application for the New Jersey regulator was first reported by The Press of Atlantic City. The purchase agreement was made on Dec. 21.
In a joint statement, Michael Frawley, the casino’s chief operating officer, and Eric Holleiser, a spokesman for Rational, confirmed the proposed sale.
“The acquisition of Atlantic Club Casino Hotel will secure up to 2,000 jobs and maintain the economic benefits that the casino brings to New Jersey,” the statement read. “During this period, Atlantic Club Casino Hotel will operate as normal under its current management, which will remain in place after the completion of the acquisition.”
Rational will acquire 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 a cutthroat market in Atlantic City, which has struggled with increasing competition from casinos in neighboring states.
Atlantic Club ranks 10th among Atlantic City’s 12 casinos in terms of gambling revenue. Gamblers’ revenue fell 11% last year to $127.2 million. Atlantic Club posted a total operating loss of $13.6 million in the first nine months of last year.
The proposed deal will be scrutinized. State lawmakers passed legislation that would allow Internet gambling, but Republican Gov. Chris Christie has not acted on it.
Last year, PokerStars paid $547 million to settle money laundering charges stemming from a U.S. government crackdown on illegal Internet gambling. PokerStars has not admitted any wrongdoing and has been allowed to operate in states where online gambling is legal.
Rational is seeking a temporary casino license from the New Jersey Gaming Enforcement Division, a preliminary approval to proceed with the purchase. The approval of the New Jersey Casino Management Board is required to complete the purchase.