Amaya Takeover to Boost PokerStars Return to US, Company Eyeing Californian Market

Amaya
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  • PG News June 27, 2014
  • 3 Minutes Read

When poker world was shaken up, with the record-shattering deal between the Amaya Group and the Oldford Group for 4.9 Million, we brought you the news and followed it with instant updates about PokerStars and Full Tilt Poker getting licenses in Spain.

We now bring you latest developments from Amaya, post the takeover. Amaya has launched a strategic and aggressive campaign, against its opponents, who have been trying to block the company’s foray into the growing American online gambling market.

PokerStars is one of the world’s most popular and largest online gaming providers, with a base of 90 million plus players and 11 worldwide operating licenses.

In 2011, PokerStars had faced a blackout from state regulators, after the Department of Justice took stern measures. Though, it fought back, it was clear that the popular gaming site was clearly losing the long battle for licensing in Delaware, New Jersey and Nevada, the 3 states to run legalized online gambling.

Indian tribes in California, though keen to legalize poker, have been trying to block PokerStars from entering the state, through a “bad actor” clause, in the proposed legislation, which bars operators, who have been illegally operating in the US after 2011. PokerStars has been fighting against this move unsuccessfully, until this takeover by Montreal based Amaya. Analysts believe that the takeover could prove to be the catalyst in opening the doors for easy licensing deals for PokerStars now and that its re-entry could be a game-changer.

The takeover agreement has a clause, which states that the old owners would cut ties, though management would be retained. This clause could positively affect and allow the return of PokerStars into the US market – Fitch Ratings stated this.

Harvard Law Professor, Laurence Tribe has been recruited by PokerStars to counter the moves of its opponents, in trying to stop their comeback. Tribe, one of the country’s most eminent professors of “Constitutional” laws, has already begun the attack by stating that the “bad actor” move was unconstitutional language and hence, not applicable. This move by the company has already begun to show results, with PokerStars reopening licensing negotiations with New Jersey gambling regulators. However, the internationally popular gaming site has to also make its way into California, considered the country’s potential online gaming jewel, which would pave the way for its entry to other states as well.

A gambling regulator explained, “What we talk about is the domino effect – that [states] by and large copy each other, That means if you get in trouble in one jurisdiction, you have to explain it in another.”

PokerStars suffered a setback in 2011, when the US Justice Department, exiled it, while conducting a crackdown on offshore online gaming operators. The company settled the charges with $731 million, against bank fraud, money laundering and violating gambling regulations, without admitting to any wrongdoing.

Even as the company continues to maintain a stance of no wrong doing, its founder Isai Scheinberg, is still under indictment in the US, who denies all charges.

With its new parent Amaya, PokerStars is confident that it will regain its strength and overcome past wounds. Eric Hollreiser, PokerStars spokesperson spoke about an agreement recently signed with one of the major gaming tribe’s in the state,“The agreement with Amaya will strengthen our business coalition in California,”

The company will now face its real test in New Jersey, which had suspended PokerStars license application, last year, due to the Scheinberg indictment. Richard Schuetz, a commissioner on the California Gambling Control Commission, US, reiterated that the New Jersey decision would play an important role in furthering PokerStars future participation in the regulated gaming industry in the US.

While New Jersey remains the first hurdle, the real prize lies in California with its 38 million populations. In California, Indian tribes hold great sway over gambling and sheer economics has caused 13 of these 14 tribes, trying their best to keep PokerStars out. The tribes are doing this via the “bad actor” clause, a move, which has elicited great flak from PokerStars. The tribes are hitting back, with the reasons cited as “losing one of the few means of economic livelihood.” Victor Rocha, a political veteran of Indian gaming went on to state that the tribes were afraid of being economically outwitted and were deliberately protective of gambling, as it was their only means of survival.

Keep tuned in to catch the happening news in this takeover, as it happens, right here on PokerGuru.

Image Courtesy: calvinayre

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