PokerStars fails to make latest New Jersey online gambling approval list

TAGs: Caesars Entertainment, division of gaming enforcement, New Jersey, New Jersey Online Gambling, PokerStars

waiting-roomThe New Jersey Division of Gaming Enforcement (DGE) released its latest list of companies approved to participate in the state’s online gambling market when it officially launches on Nov. 26. Unlike last Friday’s list, this week’s honor roll included neither brick-and-mortar casino operators nor their online gambling partners. The vendors and ancillary companies approved on Friday consist mainly of payment providers, marketing outfits, affiliates and such.

The DGE’s next update is set for Nov. 20, just one day before the commencement of the state’s five-day trial run of approved operators’ online gambling systems. To date, only five of Atlantic City’s 12 casinos have received the DGE’s online green light. Two of the remaining seven – Revel and the Atlantic Club Casino Hotel – have indicated that their troubled finances preclude them from making any online moves for the time being.

That leaves just five laggards, four of which belong to Caesars Entertainment. The agenda for the state Casino Control Commission’s Nov. 20 hearing includes Caesars’ petition for licensing approval but there’s no mention of Resorts Atlantic City, the casino that has partnered with the Rational Group, the parent company of online poker titan PokerStars.

Whether or not the DGE is prepared to approve Stars’ bid for a New Jersey online gambling license has become something of an industry parlor game. In 2012, Stars entered into a $731m deal with the US Department of Justice to settle civil charges that were laid on Black Friday, but criminal charges remain unresolved. The civil settlement called for Stars’ founder Isai Scheinberg to step down from any active role in the company’s affairs, although his current position among the company’s brain trust remains a matter of some debate. Scheinberg’s son Mark was not named in the Black Friday indictments but has paid $50m to settle potential forfeiture claims against his Stars assets.

It’s unclear whether these moves were sufficient to bleach out any stains on Stars’ reputation, and the individuals ultimately responsible for making this call have been pretty cagey as to their own interpretation of events. At last month’s World Regulatory Briefing, DGE director David Rebuck told OnlinePokerReport’s Marco Valerio that the vetting process hinged on whether company principals “have the right character, suitability and what are the tentacles of the leadership as such that it taints the whole company.”

Rebuck said he personally didn’t like to be in a position of “killing a company unless I can show that the leadership, the tentacles of leadership are such that they have unduly influenced the operation of the company so that no matter who you take out, you can’t correct the problems that you’ve identified.” Industry prognosticators have seized on this repeated reference to ‘tentacles’ as suggesting the DGE isn’t convinced that the senior Scheinberg has actually agreed to go live on a island with no communication links to the outside world.

The DGE has also offered mixed signals on how it treats past transgressions. Paul Leggett recently stepped down from his executive position with the Amaya Gaming Group after a mere six months, reportedly because his former role as COO of Ultimate Bet’s parent company Tokwiro Enterprises would have complicated Amaya’s New Jersey aspirations. Yet Jim Ryan’s Pala Interactive was deemed New Jersey-worthy despite Ryan’s former role as the boss of Ultimate Bet’s previous owner, Excapsa.

Stars point man Eric Hollreiser has publicly stated that the company continues to work with the DGE to resolve any lingering concerns, but Rebuck suggested we may never learn the DGE’s true feelings on Stars’ suitability. Rebuck told Valerio that in most cases in which licensing appears unlikely, “the company that is being evaluated withdraws from the process,” either because “they figure that regulators are being unreasonable” or because the operators “see the handwriting on the wall.” At this point, the only thing that appears certain is that a Resorts-Stars online offering won’t be among the nags bolting out of New Jersey’s starting gate on Nov. 26.


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