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Gaming group: Rational Group takeover of Atlantic Club would 'gravely compromise' industry

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The nation's largest gaming industry trade group is formally objecting to an online poker company's attempt to purchase the Atlantic Club Casino, in Atlantic City.

In a brief filed today, the American Gaming Association, of Washington, D.C., says the integrity of the gaming industry will be "gravely compromised" if the Division of Gaming Enforcement and the Casino Control Commission allow The Rational Group, which runs Full Tilt Poker and PokerStars, to take ownership of Atlantic Club.

"For many years, the PokerStars individuals and entities operated a business with a history of intentional, uninterrupted criminal violations," the brief states. "They cannot demonstrate the good character, integrity and honesty required by New Jersey law."

The filing marks the first time the association, which was founded in 1995, has intervened in a licensing proceeding. NJBIZ obtained a copy of the filing Monday afternoon. The filing was confirmed by Holly Wetzel, an association spokeswoman.

PokerStars and Full Tilt were among a number of online poker sites whose domain names were seized by the U.S. Justice Department in 2011. The government charged the firms with operating illegal gambling sites, bank fraud and money laundering. At the time, the two sites were rivals.

Last year, PokerStars reached a settlement with the Justice Department under which it paid more than $700 million to settle the case and take control of Full Tilt's assets.

Last month, the company filed paperwork with the Division of Gaming Enforcement seeking permission to purchase the Atlantic Club.

The company didn't admit fault in the DOJ settlement, but the American Gaming Association said Rational still isn't qualified to operate a casino under New Jersey's famously stringent requirements. The association also urged the state not to grant an interim authorization as a means to buy more time to investigate the company.

The association claims PokerStars took bets from New Jersey residents for more than a decade, thereby violating the state's prohibition of unlicensed contests of chance.

"From 2006 to 2011, PokerStars masterminded the payments involved in that unlicensed betting by systematically defrauding every bank and other financial institution that touched those transactions," the brief states.

The move comes less than a week after Gov. Chris Christie signed a law legalizing online gaming in New Jersey. The law would allow Atlantic City's 12 casinos to set up online gaming operations. Thus, if PokerStars is approved to purchase Atlantic Club, it would gain far more than the brick-and-mortar casino. It would also gain access to New Jersey's potentially lucrative legal online gaming market.

In an e-mail, Eric Hollreiser, a spokesman for the Rational Group, noted his company has been declared suitable to apply for a casino license by the Justice Department, and said the application must be judged on its merits.

"These are matters for expert regulators to determine, not self-interested partisans picking a public fight," he said.

He noted that PokerStars has online gaming licenses in a number of European countries, and said the company is "one of the largest and most respected" online gaming firms in the world. "We will continue to work positively with regulators in New Jersey and elsewhere whenever they review our qualifications," he said.

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