This is one of a series of profiles covering companies that hold a license to participate in Nevada’s online gambling market.
American Casino & Entertainment Properties (commonly referred to by the much simpler to remember and say acronym, ACEP) is a subsidiary company of Whitehall Streets Real Estate Funds, which purchased ACEP and its assets in 2008 from American Real Estate Partners.
The best known asset of ACEP would be the Stratosphere Hotel and Casino in Las Vegas, Nevada, which the ACEP Company picked-up after the original Stratosphere owners declared bankruptcy in 1996. When Whitehall entered the picture they paid $1.3 billion for land and casino assets which were valued at about $1 billion in 2007, and since the acquisition ACEP has been operating in the red.
ACEP wasted little time in filing their application for a Nevada online poker license, formally submitting their application in February of 2012. Acep was the fourteenth company to apply for an iGaming license in the state.
On September 6, 2012 ACEP received preliminary approval for an online poker operator license from the Nevada Gaming Control Board in a formal hearing. Just a couple of weeks later ACEP’s license application was approved by the Nevada Gaming Commission.
On September 20, 2012 American Casino & Entertainment Properties saw their license application accepted by the Nevada Gaming Commission. ACEP’s license allows them to host online poker games in Nevada.
As an online poker operator ACEP will be allowed to host and operate an online poker site in the state of Nevada, following the regulations set by the NGCB and the NGC.
As stated above, ACEP has formed a strategic partnership with Bally Technology and has already launched the OnGame powered AcePlay.com poker room. While their deal is with Bally, Bally has also entered into a strategic partnership with Amaya Gaming, which allowed Bally to lease out the OnGame software to ACEP as well as the Golden Nugget.
AcePlay was launched in February of 2013 and at this time AcePlay.com is currently only available in play-money format, but it appears that ACEP and Ballys are well on their way to launching real-money online poker in Nevada.
Whitehall Streets Real Estate Funds is an equity firm managed by Goldman Sachs, but so far Whitehall seems to have overpaid for ACEP, apparently banking on a parcel of land around the Stratosphere Hotel to increase the valuation of ACEP’s holdings. Currently the properties controlled by ACEP are losing money, and Whitehall has sought to restructure their debt, which means the Stratosphere could very well be a massive failure twice-over.
In 2009 ACEP restructured its debt with Goldman Sachs and laid-off some 600 employees, but the Stratosphere and other assets of ACEP have continued to bleed money. Online poker may very well be the tourniquet the company needs.
As mentioned above, the Stratosphere is considered one of the biggest flops in Las Vegas history as its location is simply too far down the Las Vegas Strip to appeal to many tourists. When the hotel opened in 1996 it was considered one of the nicest properties on the Strip, but its poor location has failed to attract visitors and the Stratosphere has fallen into disrepair, unable to keep pace with their competitors farther south on the Strip.
According to an article in Cardplayer Magazine, ACEP’s Director of Gaming Development Alec Driscoll, sees online poker as a “player acquisition tool”, bucking the conventional wisdom that online gaming will detract from land-based gaming.
Here are the four properties controlled by ACEP:
Arizona Charlie’s Decatur
Arizona Charlie’s Boulder
Stratosphere Las Vegas
In February of 2013, along with their partner Bally Technologies, ACEP launched the free-play version of their online poker site, AcePLAY.com. AcePLAY will have a familiar look and feel to online poker players as the site is using the OnGame client to host their online poker games.
OnGame is currently owned by Amaya Gaming, which entered into a agreement with Bally Technologies earlier this year, with the three players making for one of the most convoluted partnerships in the market.
The head honcho at ACEP is the company’s CEO and Board of Directors member Frank V. Riolo. Riolo has been in his current position since 2008, and has been an executive in the gaming industry since 2002.
Other key people in the ACEP hierarchy are:
CFO, Treasurer and Board Member: Ned Martin
Board Member: Alan Kava
Board Member: Peter Weidman
And here are the people at the helm of each of the four properties controlled by ACEP:
Executive Vice President, General Manager Arizona Charlie’s Decatur: Ronald P. Lurie
Senior Vice President, General Manager Arizona Charlie’s Boulder: Mark Majetich
Vice President, General Manager Stratosphere Casino, Hotel & Tower: Paul Hobson
General Manager Aquarius Casino Resort: Sean Hammond
ACEP does have casino properties in other states, but at the time being their role is limited to the Nevada market. For ACEP to jump into a newly regulated market where they have no physical presence they would likely have to see new laws introduced as well as needing to comply with the imposed regulations.