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Pokerstars Loses Atlantic City Case Appeal

Out of options and out of pocket in New Jersey
The Rational Group, parent company of Pokerstars and Full Tilt Poker, has suffered another legal setback in its attempt to establish a foothold in the nascent New Jersey online gambling market by buying troubled land casino the Atlantic Club.
On Monday a New Jersey appeal court rejected the company's appeal against an earlier decision in a lower court that Atlantic Ciub was within its rights to withdraw from an acquisition deal with Rational after the agreement ran out of time due to licensing delays.
By then Rational had handed over $11 million to Atlantic Club owners Colony Capital as a gesture of good faith and to help the casino to survive; the American judges have ruled that Colony is within its rights to keep that money.
In its appeal, the Rational Group claimed the judge in the initial hearings 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.
Commenting on the successful outcome of the appeal for Atlantic Club, chief operating officer Michael Frawley said the casino was clearly pleased with the result of the litigation.
"Our intentions have, and will continue to be focused on the aggressive pursuit of New Jersey's emerging online gaming opportunities," Frawley said.
Pokerstars-Rational Group had not commented when we went to press Tuesday morning.
There has been speculation that Atlantic Club used the licensing delay to pull out of the deal because a more attractive alternative may have developed.
The casino was in financial trouble prior to the Rational deal, which put an acquisition price of $15 million on the table and also involved a commitment by Rational to fund a potential $32 million shortfall in the employee pension account.
Rational also had discussed investing an additional $20 million to $40 million into the property once the deal was completed.
As things stand at present, Atlantic Club has not only succeeded in withdrawing from the agreement, but it is keeping the $11 million handed over so far by Rational Group.

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