When the shortlist for this year’s nominees for the Poker Hall of Fame was revealed earlier this month, PokerStars founder Isai Scheinberg’s name was nowhere to be found. For many, Hyman Roth’s impromptu eulogy of Greene in The Godfather Part II echoes Scheinberg’s dilemma: “This was a great man, a man of vision and guts. And there isn’t even a plaque, or a signpost or a statue of him in [Las Vegas].”
Caesars Entertainment controls the Hall of Fame, so it’s no surprise that Scheinberg failed to make the cut. Caesars has a longstanding feud with PokerStars, and while the animosity has thawed somewhat over the past year, Caesars interactive Entertainment CEO Mitch Garber recently told eGaming Review that Stars had “unfairly” grown its business by staying in the US market following the 2006 passage of the Unlawful Internet Gambling Enforcement Act.
Unfair or not, Scheinberg’s decision to keep Stars in the US market was the right business move, as Stars is now the unquestioned global market leader, while PartyPoker – which Garber used to oversee – has become a poker afterthought.
The poker world was surprised earlier this year when online affiliate PokerNews.com announced that it wouldn’t be handling live updates from the 2015 World Series of Poker. Word had it that Caesars had balked at PokerNews’ compensation demands but the decision may have had more to do with Caesars discovering that PokerNews had been acquired by Scheinberg.
Sources have told CalvinAyre.com that Scheinberg took an interest in acquiring PokerNews after online gambling technology company Playtech acquired PokerStrategy in 2013. Perhaps mindful that he better act before Playtech founder Teddy Sagi got out his checkbook again, Scheinberg reportedly made PokerNews founder Tony G an offer he couldn’t refuse. Scheinberg and Tony G are both of Lithuanian descent and are known to be close, and the deal they reportedly struck has remained unnoticed by most of the industry.
Imagine Caesars’ reaction if they heard the rumor that Scheinberg retained a beneficial interest in PokerStars after the $4.9b sale to Canada’s Amaya Gaming in 2014. Improbable as it may seem given the scrutiny applied to the acquisition, sources close to both Scheinberg and PokerStars have told CalvinAyre.com that Scheinberg has yet to completely relinquish his hold on his creation.
The lengthy delay in New Jersey gaming regulators approving Stars’ entry into the state’s regulated online gambling market was recently pinned on the Division of Gaming Enforcement’s investigation of Amaya’s acquisition. Given Scheinberg’s unresolved criminal indictments in the US, any evidence of his continued involvement would be lights out for Stars’ chances of entering not only New Jersey but also for any other US market.
True or not, it’s ridiculous that Scheinberg’s involvement would be a deal-breaker. Yes, Scheinberg was indicted on Black Friday, but there’s no shortage of US casino companies – including Caesars – who have been fined millions of dollars in recent years for serious slip-ups in their commitments to stamp out money laundering.
And yes, Scheinberg’s indictment was for bank fraud. Yet what’s the difference between Stars miscoding bank transactions and Caesars/Sands/Trump Entertainment looking the other way while shady high rollers funnel money of undetermined origin in and out of casino accounts?
One is a sin of commission, the other of omission, but the intention was the same: keep the money flowing so players can continue to gamble. The casino companies blatantly ignored their AML responsibilities, hoping no one with a badge would notice, while Stars sold more ‘golf balls’ than Titleist. Tomato, tomato…
Scheinberg paid a far greater financial penalty to resolve his US law enforcement predicament than did the US casino companies, yet they were allowed to shrug it off and get back to work, while Scheinberg remains branded with his scarlet letter. Clearly, there’s one rule for US companies and another for international companies.
Should the DGE uncover some trace of Scheinberg’s continued involvement in PokerStars operations, one would hope they would give Amaya the benefit of the doubt, much as Las Vegas Sands was allowed to carry on as usual despite doing business with a reputed Mexican methamphetamine supplier who preferred to transfer tens of millions into his casino account in small sums through tourist-type money exchange kiosks.
After all, as the DGE has likely discovered, it’s difficult to determine who owns what when things are filtered though 27 layers of shell companies. So how was Amaya to know that the Irrational Group’s Esau Schernbeig was anyone other than who he claimed to be?
