The American Gaming Association (AGA) has recently lodged a legal brief in opposition to PokerStars’ recent application to gain a Gaming Licence in New Jersey to allow it’s take over of the Atlantic Club Casino in Atlantic City, NJ.
The brief is centre around the case brought by the Southern District of New York’s US Attorney, causing Black Friday. Although the civil case against PokerStars has been dismissed after they paid a massive fine, acquired Full Tilt Poker, and resolved the debts owed to Full Tilt customers outside the US. They did this while accepting no wrong doing, guilt or liability in respect to the charges made.
The AGA claims that PokerStars had built it’s business on “deceit, chicanery and the systematic flouting of U.S. law”.
The actions taken by the AGA are apparently the first time they have attempted to get involved in the process of the approval of a gaming licence.
Here’s where the story gets interesting…
There have been several articles posted by very reliable online publications claiming that all is not as it seems with this brief.
According to quotes attributed to Eric Hollreiser, who currently holds the position of Head of Corporate Communications for the Rational Group (Owners of PokerStars), suggesting the AGA is acting for less than altruistic reasons.
Several weeks ago, according to Mr Hollreiser, the Rational Group was approached by Caesars Entertainment, with an offer to sell both the Rio Casino in Las Vegas, and the WSOP brand (it’s not clear at this time if this was the online brand, or the actual rights to the tournament series). Caesars Entertaining is in significant financial difficulties, with around $20 Billion in outstanding debt, and with revenues not looking to significantly rise anytime soon, many analysts have been touting the demise of this behemoth of the Gambling industry for a while. There have been several suggestions that the WSOP brand has been up for sale, but these have always been squashed by Caesars PR machine.
Caesars were positioning the PokerStars Acquisition of the Rio as allowing a better PokerStars/Caesars relationship, and could help in PokerStars attempts to gain a Nevada iGaming Licence.
PokerStars response that they had “no plans to acquire another casino in the near term.” seems to have started a response from Caesars, using the AGA as it’s cat’s paw.
The first action was the addition to the Nevada iGaming legislation of a “Bad Actor” clause, effectively stopping PokerStars from operating in the state, as they had operated post UIGEA in the US.
This addition looks to be a wonderful piece of opportunism, as the Nevada bill required amendments to allow it to operate an intrastate structure in the post NJ regulation world. In 2011, when Black Friday was much fresher in the minds of legislators, they had seen no need to add this clause in, yet nearly 2 years later, they found the need to?
The AGA has then presented the brief outlined above to the NJ gaming authorities, attempting to block PokerStars, who’s two online poker software solutions are widely considered to be the market leaders by a considerable margin, from entering the New jersey Market as well as Nevada.
It seems that Hollreiser is of the view that these actions are selfish in nature. He is quoted by Diamond Flush Poker as saying:
“Many of the AGA’s charges are false and defamatory. No court has found PokerStars or the four named PokerStars executives guilty of any offenses and neither they nor the companies face any criminal charges. Furthermore, the settlement with the DOJ includes no admission of any wrongdoing.
The Department of Justice has said PokerStars is suitable to apply for a license in the U.S. and saw fit to sell us the assets of our largest competitor and entrust us to compensate their customers outside of the U.S.
We will continue to work with authorities including the NJ regulators and other interested state regulators to discuss our qualifications and allow them to comment on what they find.
PokerStars is one of the world’s largest and most respected internet gaming companies because we work closely with regulators and are in good standing with governments around the world, holding licenses in France, Germany, Italy, Spain, Denmark, Estonia, Belgium, Malta and Isle of Man. We will continue to work positively with regulators in New Jersey and elsewhere whenever they review our qualifications.
Perhaps it’s no coincidence that AGA member Caesars Entertainment approached PokerStars in early February and offered to sell us certain assets, such as the Rio Casino in Las Vegas and the World Series of Poker. Caesars suggested that this acquisition would give us a better relationship with Caesars and would help PokerStars gain a license in Nevada. PokerStars declined the offer because we had no plans to acquire another casino in the near term.
Within weeks Nevada legislators inserted language in their online poker bill clearly aimed at preventing PokerStars from participating and the AGA came out with these specious claims.”
FTR will be keeping a very close eye on these events over the coming weeks, and we’ll bring you the next steps in what seems to be becoming a tit for tat exchange between these giants of gaming.
Any opinions in this article are the writers alone, and do not necessarily express the views of FlopTurnRiver.com