New Jersey’s Atlantic Club Casino Hotel closes

In 2005, hedge fund Colony Capital bought the property for around us$ 500 million. Colony Capital was at one point prepared to sell it to PokerStars for a comparatively measly sum of us$ 15 million, however the deal collapsed amid a whole whirlwind of drama. PokerStars — whose one-time chief is under federal indictment — still hasn’t been found suitable to run online poker in New Jersey.

PokerStars’ plan to buy the Atlantic Club was vigorously opposed by the American Gaming Association, the U.S. commercial casino industry’s top lobbying group. Its members include the likes of Caesars Entertainment. The AGA claimed that PokerStars “operated as a criminal enterprise for many years." PokerStars settled with the federal government but didn’t admit any wrongdoing.

Struggling for years against newer, bigger casinos in Atlantic City and in neighboring states, the Atlantic Club sought a buyer for the last few years but was unable to attract one. It filed for bankruptcy in November and was sold for a combined $23.4 million just before Christmas to two competitors who will strip it for parts. Tropicana Entertainment bought the table games, slot machines and customer lists, while Caesars Entertainment bought the 801-room hotel, for which it has no immediate plans.

Even when it wasn’t the subject of a bitter dispute within the gaming industry, the Atlantic Club was still an abyss. The property’s assets were eventually bought by Caesars and Tropicana Entertainment, who will quickly gut the carpet joint. The closure marks the loss of around 1,600 jobs, according to the Associated Press.

The Garden State legalized online gambling nearly a year ago to help stop the bleeding and prevent casino closures, but apparently it was too little too late for the Atlantic Club. One former casino executive told the Associated Press that more closings could be on the horizon.

New Jersey debuted online gambling in late November, so the industry is still in its infancy. In other words, the new revenue stream hasn’t been open too long.

There is a bitter debate within the gaming industry as to whether online gambling will weaken or strengthen the brick-and-mortar side of things. If more Atlantic City casinos close, despite the state having online gambling, it might give the anti-online gambling camp some more ammunition, most notably Sheldon Adelson, who thinks web games will be a detriment to the core of his business. It’s worth noting that not every casino in Atlantic City has web gambling.

Most seem to attribute it to bolstered gambling industries in nearby states (most notably Pennsylvania), which seems to have resulted in decreased interest in New Jersey gambling. It could also be partially due to people being poorer and not having as much to spend at casinos. There was, after all, a major economic crisis in or around 2008. Atlantic City started sliding in 2006, though. Twelve casinos for the area might have just been too many for the area to handle long-term in most economic climates. Finally, maybe top casino firms saw more lucrative investments elsewhere (Macau, for example) and thus scaled back on their New Jersey dealings.