What do you do if you’ve got a purchase agreement with Colony Capital and the latter allegedly reneges on you? If you’re Rational Group, which thought it had a $15 million deal in place to purchase the Atlantic Club Hotel, the answer is simple: “We’ll see you in court.”
While the deal with PokerStars is, publicly, still up in the air it seems as if Atlantic Club Casino is still searching for a buyer. But is $15 million even worth it to buy a casino just to earn online gaming revenue? Not so fast my friend.
Online wagering could bring in a comparatively scant $30 million … not surprising given the difficulty that some of the major players are having getting onto the field.
If you divide online gaming revenue between 10 companies that’s $3 million per company. That’s not much revenue at all and certainly wouldn’t make buying into a dying casino market worthwhile. However, this is short-sighted. Online gaming is an investment today.
Online poker will grow once it becomes legal. Online poker is also a gateway to other online gaming revenue for a casino. Whenever sports betting is legalized it will also earn revenue for online gaming companies.
Looking much further into the future online gaming will include slot machines and video poker. Playing slot machines online has always felt a little sketchy but the most trusted companies for online gaming will be the familiar companies with a good track record elsewhere.
Further, Atlantic Club Casino has undergone renovations over the past few years. It’s not a dump in need of a major facelift. With minimal investment it could be made into a marginal casino that could someday turn a profit – even if it’s a small profit. There is still some value in connecting online business with a brick and mortar business.
So, is an online poker license worth $15 million and whatever investment you’d have to make in the Atlantic Club Casino? In the long-term, absolutely.
Photo – Atlantic City Insiders