On Saturday, Gambling Compliance writer Chris Krafcik (@CKrafcik) tweeted that he’d received an email from New Jersey state Senator Ray Lesniak in which Lesniak said the NJ Senate’s online gambling legislation would receive a floor vote on May 31. Meanwhile, the state Assembly’s companion legislation AB2578, which received committee approval this week, has been published online (read it here). The bill was heavily amended before receiving the committee’s okay, but one addition in particular is drawing a lot of attention on the interwebz.
Section 37 of the new and improved AB2578 would specifically bar any company that took bets from Americans after Dec. 31, 2006. (A similar provision was included in California’s latest online poker bill.) This clause is viewed as a way of ensuring the support of US land-based casino companies with operations in New Jersey – in particular, those which have already inked online poker joint venture pacts with European operators that withdrew from the US market following the October 2006 enactment of the Unlawful Internet Gambling Enforcement Act (UIGEA), such as Caesars Entertainment/888 Holdings and Boyd Gaming/Bwin.party. It would also place the market off limits to companies that didn’t exit the US post-UIGEA, such as PokerStars and Full Tilt Poker.
But AB2578’s Section 37 goes further, prohibiting the use of any “covered assets” these companies utilized to take wagers from US residents after Dec. 31, 2006 — even if these assets were “purchased or acquired, directly or indirectly, in whole or in significant part” (‘significant’ here defined as 5% or more, or any percentage that provides control) by an entirely untainted party. “Covered assets” includes the software used to take wagers, a trade name, service mark or similar intellectual property, as well as databases of US customer information. The legislation allows for a party to apply for a waiver of these conditions, provided they can prove the entity that previously owned the assets wasn’t breaking any laws. Sadly, the last best opportunity to test that premise died when Black Friday defendants John Campos and Chad Elie struck plea deals with the US Department of Justice.
Assuming the rumors about PokerStars acquiring the mothballed assets of Full Tilt Poker as part of a wider deal with the DoJ are true, AB2578’s Section 37 poses the thorny problem of what to do with FTP once it’s been acquired. Scuttlebutt had it that Stars intended to partner FTP’s beloved software and highly recognizable brand with a US casino company. This is a hypothetical on a hypothetical, but in New Jersey, at least, such a plan wouldn’t fly under AB2578. Hypothetical or not, it’s a thought that may leave FTP’s US players – who have invested enormous emotional capital in Stars’ ability to swing a deal that would enable them to recover their frozen FTP balances – hyperventilating.