Less than a week after the American Gaming Association (AGA) filed a brief with the New Jersey Casino Control Commission and Division of Gaming Enforcement opposing the Rational Group’s application for an Interim Casino Authorization (ICA) in the state, the parent company of PokerStars has struck back. On Sunday, Rational Group responded with a letter to the same New Jersey gaming divisions, urging them to not consider the AGA’s efforts to derail PokerStars’ ICA.
To give a little background, Rational Group entered into an agreement with Resorts International Holdings in January to purchase the its languishing Atlantic City property, the Atlantic Club Casino Hotel. In order to actually finalize the purchase, Rational Group must be granted the ICA. The AGA took umbrage to Rational/PokerStars’ attempt to get into the U.S. brick-and-mortar gambling market, filing a brief last week, saying among other things, “The ICA is designed to expedite conditional licensing of qualified licensees, not open the door into New Jersey’s gaming industry for applicants who cannot meet the law’s standards for integrity and honesty.”
PokerStars has now fought back, saying, in so many words, that the AGA is full of it. In the letter, PokerStars made three main points:
1. The AGA lacks a “significant interest in the outcome” of these proceedings.
2. The AGA’s participation is not “likely to add constructively to the case.”
3. To permit the AGA to participate in this matter would be destructively anticompetitive, and would do a disservice to the people of New Jersey.
To the first point of contention, PokerStars says that the AGA’s usual activities do not jive with this attempted interference in the application proceedings. It is sticking its nose where it doesn’t belong, stepping on the toes of New Jersey’s regulatory bodies. PokerStars goes on the offensive, saying (emphasis added):
The AGA’s application is far afield from these types of situations. The AGA has no firsthand knowledge. It makes no suggestion – nor can it – that the Division’s investigatory process is flawed. And the AGA can offer no information whatsoever which is useful or outside of the scope of the Division’s usual investigatory process. The AGA’s sole interest here is economic warfare. If AGA is permitted to participate here, the Commission will have set a precedent inviting competitors to intervene in every licensing proceeding, thereby permanently multiplying the proceedings and delaying the disposition of those matters indefinitely into the future.
PokerStars continues:
For all of its lofty rhetoric, the only interest the AGA actually has in this proceeding derives from the fact that some of its members perceive themselves to be Rational’s competitors. At bottom, the AGA’s brief constitutes an attempt by these competitors to exclude Rational from the U.S. market.
As far as the second point is concerned, the message is simply that the AGA has nothing useful to add that the Division and Commission either do not already know or cannot find out via publicly available sources. For example, the AGA tries to denigrate Rational Group and PokerStars by discussing the civil case that was settled with the U.S. government last year. PokerStars does not deny any of that happened (though it emphasizes that in the settlement, it admitted to no wrongdoing), but says that the Division and Commission already know all about it, so having to listen to the AGA is just a waste of time.
Said PokerStars, “The AGA’s rote assertion that its participation in this case would not cause “undue delay or confusion” is belied by the AGA’s own submission – voluminous filings many hundreds of pages in length and measuring approximately three inches in height.”
“’Undue delay and confusion’ are virtually guaranteed if AGA is invited to participate,” it added.
The last point, that the AGA’s participation would be “destructively anticompetitive, and would do a disservice to the people of New Jersey,” is fairly straightforward. PokerStars sees the AGA’s protest as an attempt to protect its territory, to keep out a strong competitor. This competitor, by purchasing the Atlantic Club Casino, would save a couple thousand jobs and help New Jersey’s economy.
