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Best of Howard Stutz

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Howard Stutz
 

Pinnacle Entertainment acquires bankrupt operators of Epic Poker League and Heartland Poker Tour

18 June 2012

Las Vegas-based Pinnacle Entertainment, Inc., which is owed $2 million by the bankrupt Federated Sports + Entertainment, said Friday it acquired the company and its two poker businesses, the Epic Poker League and Heartland Poker Tour.

Pinnacle, which operates six casinos in St. Louis, Louisiana and Indiana, and a racetrack in Ohio, did not reveal a purchase price for the transaction. The casino operator said it will take over all of Federated's assets and its intellectual property.

Bluff Magazine reported on its website that a Pinnacle-controlled company submitted a winning bid of $4.5 million for the Federated assets at a bankruptcy auction in Maryland on Wednesday.

When the Federated filed for Chapter 11 bankruptcy reorganization in February, Pinnacle was listed as being owed $2 million, of which $1 million was used by the company to acquire the Heartland Poker Tour, a minor poker circuit that is in its eighth season and has a television contract to broadcast events on network, cable and satellite stations throughout the U.S.

The Heartland Poker Tour made 17 stops across 15 states in 2011. Pinnacle Entertainment's River City and Lumiere Place casinos in St. Louis hosted Heartland Poker Tour events in March.

Pinnacle Chief Executive Officer Anthony Sanfilippo said the transaction gives the company "one of the poker industry's most powerful brand and intellectual property portfolios, as well as the opportunity to expand the Heartland Poker Tour and more extensively integrate its events into our network of casino properties."

Sanfilippo said the acquisition also provides Pinnacle with elements that could help in the company's online gaming strategy.

Former World Series of Poker Commissioner Jeffrey Pollack started Federated Sports + Entertainment in January 2011 and created the Epic Poker League. At the time of the bankruptcy filing, Pollack said the company would seek a partner.

In January, Wicked Chops Poker website reported Epic Poker was in negotiations to be bought by Pinnacle.

Federated owns the Global Poker Index, epicpoker.com, the Epic Poker game on Facebook and the Heartland Poker Tour.

Pollack started the Epic Poker League with professional poker player Annie Duke as commissioner. The idea was to attract professionals who would earn player cards to compete, similar to players on golf's PGA Tour.

Epic Poker held three events last year at the Palms. The first Epic Poker event had 137 players and smaller fields in the next two events.

When Federated filed for bankruptcy on Feb. 28 in Maryland, creditors were owned more than $5 million. The business had $15,000 in cash and $115,000 in receivables.

The majority of the debt was owed to two companies, $2 million to Pinnacle and $1.966 million to All In Production, a Fargo, N.D., company that sold Federated the minor circuit Heartland Poker Tour last year.

All In sued Federated Sports in North Dakota in October for nonpayment stemming from the acquisition, which was originally almost $3 million.

In April, Federated told the bankruptcy court it had nearly $7.9 million in liabilities and $38,000 in cash on hand. In a court filing released Thursday, a group of creditors said the former owners of the Heartland Poker tour knew Federated was insolvent and a $1 million payment made in January should be treated as a fraudulent transfer of funds.