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Suspension of Online Gambling License Throws Off PokerStars Game

The New Jersey Division of Gaming Enforcement suspended its review of the online poker company’s two year license application. This has crippled PokerStars long planned desire to become part of the largest state to regulate online gambling, and its best shot of returning to the U.S. online gambling market.

New Jersey regulators

Though regulators in New Jersey have left room for reconsidering PokerStars’ application, it is unlikely there will be any reversal as long as PokerStars founder, Isai Scheinberg, is under federal indictment. Scheinberg was indicted two years ago by federal prosecutors. He allegedly violated the Unlawful Internet Gambling Enforcement Act and the Illegal Gambling Business Act. Though Scheinberg hired Michael Mukasey, a former U.S. Attorney General, as his representative, he has not made any attempt to answer the charges. Scheinberg is not a citizen of the U.S.

PokerStars was a target in the government’s Black Friday crackdown in 2011. At the time, PokerStars was attempting to set up in Nevada, going as far as a potential partnership with Wynn Resorts. That fell through after Black Friday. In response to Black Friday, the company admitted to no wrong doing though it did pay a $731 million settlement. The company was forced to leave the U.S. market with the Department of Justice offering the opportunity to reenter if any jurisdiction that legalizes online gambling afforded PokerStars a license.

New Jersey’s Division of Gaming Enforcement’s caveat about taking another look at the application means a lot to PokerStars. The company has never really stopped actively looking for a way to get back into the U.S. market. At one point they were negotiating to buy the Atlantic Club Casino hotel but the deal collapsed. They have also had discussions with Resorts Casino Hotel to host a live poker room on the premises. PokerStars was ready to put up $10 million to execute the project. Getting a license in New Jersey had been their strongest opportunity to date.

A statement from PokerStars expressed their disappointment with the setback in New Jersey. With a promised second viewing of their application if circumstances changed in place, they plan to continue an open dialogue with governing bodies in the state.

Unfortunately, the deal’s suspension is not necessarily a neutral blow to New Jersey. It was estimated that PokerStars’ venture would have helped the state meet a $160 million tax revenue goal by end of the fiscal year.

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About the author
Daniel Hattem
From Amsterdam, Netherlands, Daniel Hattem is a qualified journalist who has worked in both media and non-media roles...

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