With the new Internet gaming law in place, the Atlantic Club Casino Hotel is in the process of finalizing a deal with the owner of the online gaming company PokerStars.com. NJ Today’s Managing Editor Mike Schneider spoke with Atlantic Club’s Michael Frawley, about the pending deal.
Happy with the progress made so far, Frawley said the deal with PokerStars is moving along and is now just waiting for the regulatory process to be completed. If and when the deal is finalized, Rational Group, the parent company of PokerStars, would assume ownership of the Atlantic Club. Frawley anticipates a transformation of the Atlantic Club property when Rational Group takes over. He said, “the one thing that they’ve been great about is the plans that they’re going to make to make the property representative of their brand.”
Atlantic Club’s financial situation was such that some feared that without the state’s new online gambling law, Atlantic Club would have been in dire straits. And Frawley is thankful to state lawmakers for making it possible for Atlantic Club to come together with PokerStars. “Right now, we are not a profitable casino,” said Frawley. “With PokerStars and Internet gaming and the capital investment they’re prepared to make in the property, we expect to be more than profitable.”
The capital investment Frawley expects PokerStars to make is about $20 million in the first year. Frawley calculated that over the next fiver years, the investment will total over $40 million on just Atlantic Club alone. “I know that there are plans to invest in other places in the state,” he said. “We are also going to have to build a data center on property which is a very significant property investment.”
The American Gaming Association (AGA), the lobbying group representing virtually every casino operator in America, including Caesars Entertainment, has been the biggest opponent of PokerStars acquiring the Atlantic Club. Frawley said that Caesars, via AGA, may be acting on an agenda, and urged a look “at what ulterior motive could be behind it.”
In an interview he gave to NJ Today, Bill Pascrell III said he found the timeline of Caesars’ actions and the progress of the Internet gaming law to be more than coincidental. “Isn’t it ironic that on Feb. 8 of this year while the bill was sitting on the governor’s desk, Caesars approached the PokerStars headquarters and asked them to buy the Rio for $400 million … because they knew that they control Nevada, they don’t control New Jersey,” said Pascrell.
While there has been increased public support for Internet gambling, as a recent poll showed, some have expressed concern over a law that makes it easier to gamble, especially for addicts. But Frawley is confident that measures will be in place to restrict some gamers, including those underage, by creating an exclusion list. He added that PokerStars is prepared to contribute a significant sum to a fund to address problem gamers.
“I think there needs to be a little bit more education on it in a lot of ways before people make a snap judgment,” said Frawley.
State officials and industry experts have repeatedly said that Atlantic City’s future depends on the casino town becoming a resort destination. Frawley agreed that Atlantic City needs to have a broader appeal beyond gaming, but that the goal of becoming a family destination is still a ways off.
“But we are making progress. I am very pleased with the things that I’m hearing from the governor’s office. I’m very pleased with the things I’m hearing from PokerStars. I think that if you look at more capital investment, the more the casinos are profitable, the more capital investment they’ll make, the more people are apt to come, the more we’re able to build our properties up to where we want them to be.”