Pokerstars' Bid to Buy Casino Could Signal Gambling Gold Rush

Poker websites and brick-and-mortar casinos vie for future of gaming industry.

ByABC News
March 11, 2013, 12:46 PM

March 12, 2013— -- A move by the online gaming giant Pokerstars to buy an Atlantic City casino could signal a gold rush for the gambling industry, according to industry watchers.

Online companies are expected to be scrambling for land and casinos in states like Nevada, New Jersey, and Delaware, which recently passed laws allowing online gambling if it is affiliated with in-state casinos. Similar bills have also been introduced in Pennsylvania and Illinois.

Pokerstars, part of the online gambling corporation Rational Group, based in the U.K., struck a deal earlier this year to buy the Atlantic Club, an 800-room hotel and casino on the Atlantic City boardwalk, according to paperwork filed with the state's division of gaming enforcement.

The move came after New Jersey Gov. Chris Christie signed a law Feb. 26 allowing online gambling for residents as long as the games were hosted by in-state casinos located in Atlantic City.

The company, which was previously indicted by the Department of Justice for offering online gambling to U.S. residents, wants to legally operate its website and the casino, according to its owners. They reportedly paid about $30 million for the casino.

"In a nutshell, the future of gaming will require a mix of online and offline expertise," Eric Hollreiser, spokesman for Pokerstars, told ABCNews.com in an email. "We are the world's largest online poker company and one of the largest producers of live poker tournaments in the world, which we produce in many of the world's best known casinos."

Hollreiser said that the proposed business model would help drive online gamers into casinos for live tournaments, and remind casino-goers to log on and game at home until their next visit.

"We drive traffic from our online tournaments to our major casino partners around the world. This drives a poker tourism business in cities such as London, Monte Carlo, Barcelona, (and) Rio," he said. "The traffic runs both ways as we introduce new audiences to poker in these live tournaments."

Pokerstars is awaiting approval from the Division of Gaming Enforcement and the state's Casino Control Commission. If it goes through, it could represent the first time a gaming website has transformed into owning and operating a hotel and casino.

The development could send waves through the gaming industry.

"The casino-going population is older. You have this huge bubble of younger people who have never gone to a casino or intend to go to one, but spend half their waking life on smartphones or computers, playing games, social networking. So how does the gaming industry respond?" said Joe Brennan, director of the Interactive Media Entertainment and Gaming Association (iMega), who has studied the effects of disruption on the gaming industry.

Because states are requiring online gamers to have a casino in the state, companies on both sides of the issue are rushing to take advantage of business opportunities. Casinos are partnering with online gamers or developing their own web games, while online poker giants are rushing to find real estate in states where casinos are legal, Brennan said.