Wednesday March 6, 2013 : AGA OPPOSITION TO POKERSTARS COULD TRIGGER INTERESTING LEGAL QUESTIONS
Online partners for some Association members may also come under scrutiny
With the issue of the American Gaming Association's attack on Pokerstars heating up fast a number of interesting legal questions – not all of them to the advantage of AGA land casino members – could be emerging.
Reuters reported Tuesday that the AGA petition opposing the acquisition of Atlantic Club by the online poker firm alleges that criminal charges are still pending against Pokerstars founder Isai Scheinberg, and that this would send ‘a damaging message' if New Jersey regulators approved the acquisition.
But the petition also acknowledged that despite 2006 and the advent of the UIGEA being regarded as the unofficial cut-off point for ‘illegal' online gambling activity in the United States, "….that many states had declared that online poker was illegal even prior to 2006. At least eight states enacted laws specifically banning Internet gambling and every state bans gambling without a license."
Thus, "PokerStars violated the laws of every state," the AGA petition suggests.
Why is this an important admission?
AGA leading members like Caesars and MGM Resorts have partnerships with top European online gambling companies like Bwin.Party and 888, clearly with an eye on gaining commercial advantage as individual states like New Jersey, Delaware and Nevada by-pass the legislative gridlock in the US Congress and legalise internet gambling at state levels, with interstate compacts a possibility.
Several industry observers have commented that it is the pursuit of commercial exclusivity that motivated the AGA outrage and strongly worded petition against Pokerstars.
Bwin.Party's predecessors and 888 pulled out of the US following the advent of UIGEA, but given the AGA acknoeledgement, what about their activities in the US market prior to 2006?
Does that not also constitute the same sort of legal defiance as that for which Pokerstars stands accused by the AGA?
"By that standard, 888 and Bwin's PartyGaming, with which AGA's members are now allied, would also have been in violation of the laws of every state," the Reuters news agency postulates.
The Pokerstars-Rational Group communications chief Eric Hollreiser has been active this week in putting across his company's reaction to the strong attack from the AGA and its members.
In regard to the comments on Isai Scheinberg he commented that many of the claims in the AGA brief were "false and defamatory" and that Pokerstars made no admission of wrongdoing in its settlement with the Department of Justice; a deal that involved hundreds of millions of dollars.
Party Gaming likewise struck a deal with the DoJ worth $105 million, as did one of its founders, Anurag Dikshit (for an even higher amount) and Sportingbet .
"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," Hollreiser said. "We will continue to work with authorities, including the New Jersey regulators and other interested state regulators, to discuss our qualifications."
The New Jersey regulators are expected to hold a hearing on the AGA petition and the acquisition next week, whilst 888 and its latest US land casino partner Treasure Island are due to present their case for a Nevada online poker licence to the Nevada Gaming Control Board soon. 888 is also seeking Nevada online poker licensing to further its partnership arrangement with Caesars.
Outspoken New Jersey Senator Jim Whelan entered the furore over the AGA petition this week, supporting of the Pokerstars deal and alleging that Caesars Entertainment, which owns numerous casinos in Atlantic City, is using the AGA to keep their competition out of the area.
“They are motivated by greed,” said Whelan. “They want to keep foreign investors out. The gaming association is their vehicle.”