Black Friday

by Wendeen H. Eolis

PokerStars' purchase agreement for the Atlantic Club Casino and Hotel in Atlantic City has expired. In a public statement, this morning ,Michael Frawley, COO of Atlantic Club Casino and Hotel has confirmed that the purchase agreement is terminated.  Nevertheless, it is too early to jump to conclusions.
 
There is nothing said thus far to suggest that the two companies cannot re-cement an updated agreement. If necessary, PokerStars could update its completed application which has been submitted to the New Jersey Casino Control Commission.
 
When it comes to online poker, machinations, twists, turns, and outcomes unfathomable at one moment have been known to become stark reality the next.

PokerStars May Still be Valued in New Jersey

Governor Chris Christie, a proponent of a full court press to revive Atlantic City, faces massive pressure to find the means to recovery from Hurricane Sandy. PokerStars' promise to bring jobs, civic commitment and 40 million dollars to the project cannot so easily be dismissed.
 

FLORIDA INTERNET CAFE CRACKDOWN PROMPTS LEGISLATION BANNING ELECTRONIC GAMING DEVICES

A $300 million scandal involving the arrest of 57 individuals and the resignation of Florida’s attorney general has prompted the introduction of a new bill which includes a sweeping ban on all electronic devices that can be used for gaming purposes. Florida’s new HB 155 measure swept through the state’s House on a 108-7 vote, following the disclosure that of $300 million netted by supposed charitable organization Allied Veterans of the World, which operates dozens of the video game-style slots parlors throughout the state, only $6 million went to the intended charities. The resulting move to ban such “internet cafes” includes language so broad it endangers almost all forms of electronic gaming, from arcade devices to the internet, regardless of whether skill or luck is involved.

888 HOLDINGS, TREASURE ISLAND

PokerStars, Caesars, Borgata, Showboat and Happenings in the State of New Jersey 

By Wendeen H. Eolis

 The application by Poker Stars for an Interim Casino Authority (ICA) license at the Atlantic Club Casino and Hotel in Atlantic City appears to be in limbo for the moment. The Casino Control Commission (CCC) has yet to announce the next steps in the process, but the Communications office of the CCC has confirmed that the licensing deliberations take place in meetings open to the public. 

AGA and PokerStars Are Subject to a Unique Bureaucratic Process

 Here is a quick review on recent events and a primer on the bureaucratic process that pits the American Gaming Association (AGA) against PokerStars in a bid to delay if not deny the online poker company’s entry into the American-based gaming market.   

 The AGA has opposed PokerStars’ application for a license and has asked the New Jersey Division of Gaming Enforcement (DGE) for permission to participate in its license application hearing.  PokerStars has shot back an indignant response to the DGE objecting to the AGA request. It has also leveled pointed accusations in the direction of the AGA and Caesars Entertainment as pots calling the kettle black.  

 The CCC which has responsibility for casino licensing matters received the AGA papers from the DGE. The DGE is the body that accepts petitions; the CCC has no authority to do so.  The bifurcated duties of these two regulatory bodies are clear to them but murky for most of the rest of us.  

 The DGE may make licensing recommendations but it is the CCC that is charged with issuance, suspensions and termination of casino licenses.  The DGE will be responsible for issuing online licenses to casinos qualified by the CCC.  So now you’ve got the picture of the bureaucratic process.  

 In the matter of the PokerStars application for an ICA, the CCC has elected to take a step back after the warring parties rattled their sabers relentlessly at each other. It is reportedly studying the situation before proceeding further on the application.

by Wendeen H. Eolis

The battle for supremacy in the emerging online poker market, stateside, is in full swing with a series of gambits by the American Gaming Association (AGA). The AGA has effectively delayed PokerStars’ anticipated acquisition of the Atlantic Club Casino & Hotel in Atlantic City by its letter and legal brief in opposition.

PokerStars is perceived as a white knight among poker players but as a black sheep by members of the AGA.

The various bones of contention are coming into sharper focus but some relevant matters of fact are becoming more murky. Lawyers supportive of the AGA stance and of AGA members most likely to be affected sooner than later have become increasingly vocal in response to this reporter’s request for help in dissecting the issues—in plain English.

Questions and Answers

More than a dozen lawyers representing both sides of the issues contributed questions and comments last week. This week the AGA supporters (on condition of personal anonymity)  reviewed their position and various documentation in an effort to flesh out the general consensus among them. One of the participants stepped up to provide  a voice on behalf of the prevailing views of AGA supporters interviewed.    PokerStars supporters in the group are expected to provide enhanced responses with references to legal documents, shortly. In the interim some of their initial comments are repeated to remind readers there are two sides —if not more— in this evolving story.

Note: For the avoidance of doubt, readers are advised that both PokerStars and the AGA declined to comment   on the Q & A  for this article  through their respective communications offices and none of the responses reflect authorized comment by either organization.  

 1. Why did Poker Stars conclude affirmatively that their online poker fare was legal in America after enactment of UIGEA?

AGA PETITIONS NEW JERSEY REGULATORS TO BAR POKERSTARS, ONLINE GIANT FIGHTS BACK

 In an unprecedented move, the American Gaming Association (AGA) filed a brief with the New Jersey Casino Control Commission in an attempt to convince the state’s gambling regulators that PokerStars is a “criminal enterprise,” operating in violation of US law, and that the state should thus rule against the application of Stars-related entity Rational Holdings US to operate the recently purchased Atlantic Club casino in Atlantic City. Lawyers for Stars responded immediately with a brief of their own, alleging that the AGA had no legal standing from which to petition, and was engaging in blatant market protectionism. New Jersey regulators postponed a scheduled hearing on the AGA petition to consider the matter in greater detail.

DEPARTMENT OF JUSTICE ANNOUNCES CLAIMS ADMINISTRATOR FOR FULL TILT REMISSION PROCESS

by Wendeen H. Eolis

Over the past two weeks the American Gaming Association and PokerStars have sparred over the future of the online gaming company’s activities in Atlantic City. There is no end in sight for a battle that has AGA pressing the New Jersey Division of Gaming Enforcement (DGE) on behalf of its members into a long methodical examination of the merits of PokerStars’ entry into the United States casino market.  

While the plot thickens and the legal issues unfold, more than a dozen lawyers are responding to my call for help to dissect in plain English what is happening. Lawyer sources for this article have intimate knowledge of the online and live casino industry. Many have represented one or more of the following: PokerStars, MGM, Caesars, other brick and mortar casinos and online gaming companies and/or the AGA. They weigh in today on a few of the questions they have brought to the table for discussion. 

Author's disclosures: The  writer is a a legal consultant but not a lawyer and therefore does not offer legal advice and  does not express any legal conclusions in the matters presented in this article.This acknowledges without specific reference that the writer and/or EOLIS companies have had business dealings at one time or another with most of the businesses mentioned in this article and necessarily, have retained confidences provided in the context of those relationships.

Please also note: For the avoidance of doubt, readers are advised that no spokesperson for either PokerStars or the AGA was solicited for comment with regard to this article and none of the responses reflect authorized comment by either organization

The questions and the summarized answers provided as a result of consulting with a wide variety of gaming law experts and white collar crime specialists follow:

1. Why did Poker Stars conclude affirmatively that their online poker fare was legal in America after enactment of UIGEA?

Last Thursday, Poker Player Newspaper proposed five questions for consideration in PokerStars suitability hearing before the New Jersey Division of Gaming Enforcement. A further article to discuss these questions was delayed Friday
after PPN asked PokerStars for comment and was advised by automated response that Poker Stars spokesman, Eric Hollreiser would “have access to email, only sporadically.” PokerStars has chosen not ro comment 
Note: For the avoidance of doubt, readers are advised that neither PokerStars nor the American Gaming Association has authoized anyone to respond to questions  posed by PPN as of this time.    

By Wendeen H. Eolis

Unlikely collaborations as well as predictable conflicts have marked the relationship between Caesars Entertainment, Inc. (formerly Harrahs) and PokerStars (Rational Group) since the enactment of the Unlawful Internet Gambling Enforcement Act of 2006. For the moment the collaborations seem like bygones.

The American Gaming Association, a trade group that is best known for representing the interests of commercial casinos in Nevada and almost as well known for its close ties to Caesars took the unprecedented step last week of opposing PokerStars' efforts to obtain a gaming license In New Jersey.

The Association has effectively picked up where the United States Department of Justice left off in its settlement last summer with PokerStars.   Last July, the DOJ settled its  civil claims against the Company, arising from the government's ballyhooed prosecution of online gaming. The cases  originated April 15, 2011 in  the indictment  U.S. v Scheinberg et al.

CHRISTIE SIGNS AMENDED ONLINE POKER LAW

 New Jersey Governor Chris Christie recently signed into law a bill approving online poker for New Jersey residents, two earlier versions of which had been vetoed upon reaching his desk. Christie had demanded minor changes to the previous bill, including larger tax levies and increased funding for problems associated with gambling addiction, changes which were quickly approved by the NJ legislature. The changes were approved by the New Jersey Assembly and Senate on 68-5 and 35-1 votes, respectively, before the bill was signed by Christie. No timetable has been set for the rolling out of NJ-authorized online poker sites, though some local political reports indicate an early 2014 debut is likely.

CALIFORNIA ONLINE POKER BILL BACK FOR ANOTHER TRY

 California online poker players are also watching state legislative happenings after a new bill seeking to authorize the creation of an intrastate online network was introduced by State Sen. Lou Correa. Several previous California efforts have failed in the past three years, due to a combination of antigambling resistance and in-fighting among perceived proponents of the plan. Correa’s new measure would give the California Gambling Control Commission the responsibility for overseeing any California-based online poker, with the bill projecting over a billion dollars in much-needed tax revenue. Correa’s proposal joins one by state Rep. Roderick Wright already under consideration.

NEVADA APPROVES INTERSTATE ONLINE POKER

by Haley Hintze

NJ GOVERNOR CHRISTIE CONDITIONALLY VETOES ONLINE POKER MEASURE, BUT BILL NEARS SIGNING

 New Jersey’s online-poker bill saga became a bad-news/good news story when NJ Governor Chris Christie issued a conditional veto on the latest measure of the bill to reach his desk, but with recommendations for minor changes that will allow the bill to become law, probably within two months. The bill’s primary supporter, NJ State Sen. Ray Lesniak, hailed the compromise as a victory of New Jersey’s casino interests and the creation of jobs, even as he set about implementing the changes Christie demanded. Those changes include an increase in the tax rate from generated online-poker revenue and additional money set aside to combat problem gambling concerns. No timetable has been set for the arrival of real-money New Jersey online poker, though a late-2013 or early-2014 window is likely.

 POKERSTARS TARGETED BY NEVADA “BAD ACTOR” PROPOSAL