According to Steamboats.org (and reiterated on CruiseTalk) the paddlewheel ship may have been purchased by Asian partners with the intent to convert her into a gambling ship. She would then be placed in Asia.
The 360ft, former Majestic America Line, US flag vessel has been laid up on the West Coast since the cruise line went bankrupt. Since she was built with funds from the US Maritime Administration (MARAD), and being US Flagged, she was then taken over by the US Government. MARAD has been in possession of the ship ever since.
Peter Knego, of Maritime Matters, reports another rumor that American Queen Steamboat Company is looking at purchasing the vessel. If successful, she’d be the future fleetmate of the paddlewheeler American Queen.