Atlantic City Boxing Scene: Atlantic Club Casino Goes Broke and Will Close January 13
By Robert Brizel, Head RCM Boxing Correspondent
Atlantic City, NJ (January 2, 2014)– The Atlantic City boxing scene is still alive in 2014. The number of Atlantic City casino hotels available to stage boxing venues is still going down, however. First, The Sands folded in 2006, and the casino project which was supposed to replace it after it was demolished never happened. Pinnacle Entertainment acquired the property for $270 million in 2006, and sold the 20 acre site for $28.5 million in November 2013 to Boardwalk Piers, an outfit who hopes to build a new casino on the site.
Now, the Atlantic Club Casino Hotel, formerly the original Golden Nugget Casino Hotel (not the current Golden Nugget Casino Hotel at the former Trump Marina), and the Hilton Hotel, has gone bankrupt and will close its doors for good on January 13, 2014, upon which time the entire hotel will be stripped for parts to be sold at auction. Caesar’s Entertainment will get the property and its 800 hotel rooms for $15 million, with the remote possibility of turning it into a nongaming hotel in Atlantic City at some point in the future. In a separate transaction, Tropicana Entertainment has bought the 1,641 slot machines and 48 table games in The Atlantic Club Casino for $8.4 million. At last count, Atlantic Club Hotel Casino employs 1,659 workers.
Online poker site PokerStars ‘almost’ bought The Atlantic Club Casino Hotel in 2010. The site’s parent company, the Rational Group, also blames the owners of the Atlantic Club for the casino-hotel’s impending shutdown. The Rational Group signed a deal to buy the casino for $15 million in December 2012, but the casino owners canceled the deal in April 2013 when Rational did not get state approval by the established contractual deadline. PokerStars had advanced the hotel $11 million of the agreed $15 million purchase price to tide it through its financial tuugh times.
New Jersey regulators suspended PokerStars’ application for an Internet gambling license for two years, due to an unresolved indictment against the company’s founder.The company is still working to resolve the matter through legal channels.The company’s partnership with Resorts Casino Hotel in Atlantic City remains intact as The Rational Group continues to pursue a New Jersey Internet gambling license. Rational aligned itself with Resorts after The Atlantic Club Casino Hotel purchase deal fell through.
According to PokerStars, which had promised to safeguard 1800 jobs at the casino, “As spring (2013) approached, the economic prospects for the Atlantic Club appeared to brighten even more with newly enacted internet gaming legislation, and the promise of summer tourism business on the horizon,That’s when the casino’s owners gambled with their employees’ future. In hopes that the improved economic picture could lead to more rewards for them, they walked away from our contract, rather than wait another few months for the regulatory approval process to be completed..Now, the Atlantic Club will be stripped for parts and its employees will be put out onto the Boardwalk (unemployed) in search of jobs. PokerStars does not share the vulture-like management practices that led to the coming job losses and disappointment of thousands of people in New Jersey with the closure of the Atlantic Club.”
Atlantic Club terminated the PokerStarsdeal, when PokerStarsfailed to to get an interim casino operating license prior to the final date stipulated in their purchase agreement of the casino as the reason for nullifying the sale.PokerStars cried foul at the Atlantic Club’s move, and filed a law suit in an attempt to preserve the deal. The case was quickly decided in New Jersey State court in favor of The Atlantic Club, which was permitted to pocket the $11 million PokerStars had already fronted toward the $15 million purchase price. Without the purchase agreement, though, The Atlantic Club Casino Hotel, which attempted to market itself to low roller locals gamblers, had no more dice to roll and no more cash flow, so bankruptcy was the only remaining option.
From a boxing writer’s perspective, the Hilton name gave Atlantic City class and prestige, but as the Atlantic Club Casino Hotel, the hotel itself, like The Sands Atlantic City before it, rapidly became too small and antiquated and unknown to have any chance of survival. Competition from casinos and slot machines of one type or another in New York State and Pennsylvania also continues to hurt the Atlantic City casino and hotel business badly.
the casino has about $2.4 million in assets.
A 660-page document lists assets and liabilities. The casino owns 11 vehicles. It has $618,973 worth of inventory, including food, beverages, tobacco, room supplies, linens, fuel oil and promotional marketing gifts for customers on hand. Creditors range from unpaid accounts worth hundreds of thousands of dollars, to $25 owed to a Brooklyn man who has taken the casino to court.
Slot machine manufacturers are owed hundreds of thousands of dollars, including Bally Gaming ($722,654) and IGT Corp. ($453,453). The casino owes the city of Atlantic City $2.25 million, and Atlantic City Electric Company $435,897. In addition, numerous employees have workers’ compensation claims against the casino.
Historically, half of Atlantic City’s 12 casinos filed for bankruptcy in the past six years. Not all survived. Atlantic Club Casino Hotel, better known as ‘ACH’ (after Hilton Hotels took its brand name off the gaming location) joins Revel Casino Hotel, which sought Chapter 11 protection this year and emerged from bankruptcy court in May 2013.
Online gaming is current legal to in-state residents only in the states of Delaware, Nevada and New Jersey. Rules and regulatiosn permit state residents to legally place bets within the state only. While Poker Stars application for New Jersey licensing has been suspended for two years, Ultimate Casino, a separate group, has been approved by the New Jersey Casino Control Commission. The Ultimate Casino online website is at http://www.ucasino.com/safe-secure/ and can currently be used by New Jersey residents for in-state gaming only. They cannot sue the internet site if they are physically outside of New Jersey.
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