Caesars, PokerStars Are Major Competitors in NJ Online Gaming Market
Caesars Entertainment Corp. offered to sell its Rio Casino, located in Las Vegas, along with the World Series of Poker (WSOP) to PokerStars in February. Confirming that such an offer was indeed made, Eric Hollreiser of PokerStars said that the giant online poker room “declined the offer” because it “had no plans to acquire another casino in the near term.”
Online gambling companies have already started scrambling for their share of the New Jersey online gaming market although Chris Christie, the governor of New Jersey, has just approved the state’s online gambling bill. New Jersey is the third US state to legalize online gambling, shortly after Delaware and Nevada did the same. Caesars Entertainment and PokerStars are two of the major competitors in the New Jersey online gambling market. While PokerStars is the world’s largest online poker gaming company, Caesars has invested a large sum of money in its online gambling sector in a bid to establish its position in the ever-growing US online gambling market.
Caesars Entertainment happens to be a prominent member of the American Gaming Association (AGA), which petitioned to the New Jersey Control Commission and Division of Enforcement against granting an interim casino license to PokersStars. The brief submitted by the AGA has 26 pages and states that PokerStars, which “was operated as a criminal enterprise for many years cannot demonstrate the good character, integrity, and honesty required by New Jersey law.”
Stating that it has sought to interfere in a licensing procedure for the first time in its history, the AGA said that it is forced to do so because PokerStars was based on “deceit, chicanery, and the systemic flouting of US law.”
PokerStars is in the process of acquiring a struggling land casino called Atlantic Club Casino Hotel based in Atlantic City, New Jersey and has already applied for a gambling license. The online poker operator, who is based in the Isle of Man, is attempting a smooth return to the US market after the events of Black Friday. In April 2011, the feds cracked down on three major online poker rooms, including PokerStars, seized their domain names, and charged their chief executive officers with multiple offenses. In July 2012, PokerStars signed a $731 million settlement deal with the US government as part of which it admitted to no wrong doing and acquired Full Tilt Poker.
According to the AGA, granting a license to PokerStars “would send a damaging message to the world of gaming, and to the world beyond gaming, that companies that engage in chronic lawbreaking are welcome in the licensed gaming business.” The organization also hints that Isai Scheinberg, founder of PokerStars, would have still continued as the CEO of PokerStars if the US government had not required the company to keep Scheinberg out of the management team.
PokerStars has responded to the brief by issuing a public statement, in which it says that expert regulators, and not vested interests eager for a public fight, ought to determine whether it should be granted a license.