http://www.forbes.com/sites/nathanva...ck-to-america/
Twenty months ago, PokerStars, the biggest online poker company in the world, essentially got kicked out of America. The U.S. government sued the company for operating an illegal gambling business, shut down its U.S.-facing web site, and indicted PokerStars’ founder. The company’s bitter competitors were elated and the publicly-traded stocks of some of them soared in the immediate aftermath. The rich online poker market in America effectively ended.
But less than two years later PokerStars is plotting its return to the U.S. The company, based in the Isle of Man, is on the verge of inking a deal to purchase a financially stressed New Jersey casino, says a person familiar with the situation. The Atlantic Club casino would serve as a beachhead for PokerStars to reenter the online U.S. market, which remains the single most lucrative online poker market in the world. It also continues PokerStars’ new strategy of investing in land-based casinos, like its recently purchased stake in a London casino.
The potential deal, which was first reported by The Wall Street Journal, comes with a price tag of maybe $50 million, but for PokerStars and its rivals, like the big U.S. casinos such as Caesars Entertainment, and online social gaming company Zynga, it means a great deal more. If PokerStars gets the deal approved by New Jersey gaming regulators, acquiring Atlantic Club, which doesn’t even have a poker room, would cap a string of victories for PokerStars.
In July, PokerStars resolved its problems with the Department of Justice, agreeing to a $731 million deal to settle the U.S. government’s civil charges that the company used fraudulent methods to process payments and evade U.S. restrictions on Internet gambling. The settlement saw PokerStars forfeit $547 million to the feds and make $184 million available to reimburse non-U.S. customers of Full Tilt, the disgraced online poker company whose assets PokerStars acquired as part of the deal. PokerStars’ reputation among the online poker playing community was enhanced because the company quickly repaid all its players after the feds shut its U.S.-facing web site down, paid back all of Full Tilt’s foreign players, and made enough money available to the Department of Justice to repay Full Tilt’s U.S. players, who have been left in the lurch.
In the U.S. meanwhile, the legal landscape changed after the Department of Justice reversed its position on a key law that the government had previously maintained made online poker illegal. In addition, proponents of online poker won a key legal ruling in federal court in Brooklyn.
Despite the efforts of Nevada Senator Harry Reid and others, there seems to be little chance that federal lawmakers will pass any legislation regulating online poker any time soon. But states like Nevada and New Jersey are moving toward introducing regulated online poker within their states, with New Jersey legislators considering a law that would only make the market for online poker players in the state open to Atlantic City casinos. If a big state like California would also join in, there would suddenly be a viable online poker market again in the U.S.
To be sure, PokerStars’ competitors will fight against PokerStars’ efforts to own a regulated casino in New Jersey, probably pointing out that the company’s founder, Isai Scheinberg, remains under indictment and out of the U.S. But the company, which always claimed U.S. law did not bar online poker, remains confident that its civil settlement with the U.S. government does not prohibit it from opening shop in the U.S.
i wonder if isai will be here?
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