Judge Batton said the contract clearly gave either party the right to end the deal if Rational had not obtained the state regulator's authorisation to operate by the agreed expiry date April 26.
Accordingly, Judge Batten dissolved a temporary restraining order obtained two weeks ago by Rational Group that barred the casino owners from selling to anyone else. What's more, RIH-Colony Capital is free to keep over $11 million already paid by Rational, as well as to sell the casino to other suitably qualified parties if it wishes.
Although, the new deal will have to be a good one to surpass Rational's offering: $15 million, along with an undertaking to underwrite around $32 million in debts incurred by the casino's pension fund, and tens of millions of dollars that Rational had planned to invest in a casino makeover and online operations.
The ruling, on the other hand, halts the online gambling industry ambitions, as a promising attempt by one of the world's biggest, and most successful global online poker brands to gain a foothold in New Jersey as a currently evolving legalised online gambling market, has failed.
RIH-Colony lawyers also sought to show that, despite an agreement between Pokerstars and the Department of Justice in 2011, in which it was agreed that its founder Isai Scheinberg would have no further management involvement, he had communicated on with casino execs during the formation of the acquisition agreement, thereby breaching the earlier settlement with the US authorities.
While RIH lawyers claimed Scheinberg remained under indictment in a Black Friday criminal case, but as "he had chosen not to return to the United States to face those charges" he was therefore a fugitive, Rational's legal representatives deny that the company or Scheinberg had failed to comply with the DoJ settlement deal, so there was nothing improper about his role in the negotiations.
If anything, the American Gaming Association, a trade body for land casino owners who would be affected by a successful Pokerstars entry into the New Jersey gambling market, will be pleased with Judge Batten's ruling.
Commenting the Judge's ruling Atlantic Club's COO Michael Frawley said: "We are now free to build on the tremendous opportunity provided by online gaming."
However, on the other side, a spokesman for Rational said the company is reviewing the decision, and still hopes to enter the New Jersey online gambling market.
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