Poker News

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 Barbara Rogers

History was made at Delaware Park Casino in Wilmington, with the announcement from the Guinness World Record officials confirming the world record for the “Longest Continuous Poker Tournament”. This was their second attempt at setting the record. Delaware Park’s 2012 Ironman Poker Challenge began on Saturday, August 25th, at noon. The tournament concluded after 36 hours 34 minutes, and 11 seconds. This feat of endurance ran without breaks, with a total of 192 participants. Three of the players were still standing, or actually slouched in their seats when the thirty-six hour mark was eclipsed. The prize pool totaled an impressive $100,608. It took a tough guy from the Czech Republic, Pete Konas to make it to the end. He was rewarded with the title, and $27,160.

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?

Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has retained the Garden City Group (“GCG”) to serve as Claims Administrator to oversee the process of compensating eligible victims of the fraud committed by Full Tilt Poker against United States players.

Bharara said, "The Garden City Group brings a track record of handling the administration of some of the country’s largest and most complicated settlements. With their selection, we take a significant step forward in the process of compensating victims of the Full Tilt Poker scheme.”

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 Wendeen H. Eolis

 A complicated relationship between Rational Group (PokerStars) and Caesars Entertainment has begun to reveal itself in earnest in recent weeks with an eclectic crowd of movers and shakers surrounding the players at the top of their respective pyramids.

 The two companies, with assistance from empowered supporters, have been known to deliver understated slaps back and forth over the years, but lately the protagonists are exchanging more powerful blows.

 Members of the Scheinberg family and top executives in the corporate empire of Caesars Entertainment are in the mix. So are the likes of American Gaming Association president, Frank Fahrenkopf, who will soon take his leave from his longtime position there.

 The cast of characters in recent machinations between the two companies has also included Scott Wilson, a business consultant/professional gambler with powerful connections. He was the spark that ignited a telephone call between Caesars and PokerStars -- the call that was heard around the world last week in a report by Nathan Vardi in Forbes  Magazine.

Mark Scheinberg and Mitch Garber are the key players in the sandbox

 Poker Player Newspaper has learned the identities of the "two high level officials" that were referenced without attribution in the Forbes article. They were Mitch Garber, CEO of Caesars Interactive and Mark Scheinberg, CEO of PokerStars.  

Tom McEvoy and David Chicotsky will again be teaching their tournament strategy at the Golden Nugget casino in Las Vegas on July 3, 2013, a day before the annual Poker Player of the Year Tournament. Their seminars are part of an overall package that begins at 9:00 AM to Noon, with lunch and other refreshments supplied. The second session starts at 1:00 PM and ends at 4:00 PM. At 7:00 that evening the participants will play in a satellite tournament for entry into the next day’s Poker Player of the Year event. The fee for this entire activity is $390.

Last year’s participants at these seminars apparently learned quite a bit, many of them placing at or close to the final table, thus proving the value of this outstanding poker education event. The blend of McEvoy’s decades of tournament experience, he was the WSOP World Champion in the 1980’s and young David Chicotsky’s internet and recent tournament experience, he was the 2008 Internet Player of the Year, has produced a learning experience second to none. It’s something you won’t want to miss as it is sure to improve your game, whether a beginner or an old pro.