| On 7 years ago

Amaya Gaming’s New Jersey-related PokerStars Gambit an Uncertain Venture

By Haley Hintze

The sale of PokerStars parent Oldford Group Limited to Canadian online-gambling firm Amaya Gaming last week in a $4.9 billion dollar deal has reinvigorated talks of a PokerStars return to the United States market, but the shape and timing of that return – if it happens at all – remains unclear.

The New Jersey situation remains fluid, with new developments virtually every day; among the latest is the announcement that Amaya has already been in touch with the New Jersey Division of Gaming Enforcement (DGE), regarding the PokerStars acquisition, and is expected to file a new application as a service provider for online gambling in the state of New Jersey before the end of June.

According to an Associated Press report authored by New Jersey gambling reporter Wayne Parry, DGE director David Rebuck expects to move forward on the new Amaya application immediately.  “We’ve had discussions with Amaya to reactivate the application, and we plan to begin discussions with them tomorrow,” Rebuck stated. “We’ll look at whatever they bring over.”

Prospects for quick New Jersey approval are enhanced by several factors, the largest of which is that Amaya is already a New Jersey license holder, with an existing service agreement already in place with Caesars Interactive in conjunction with the CaesarsCasino.com site.  However, Amaya is not involved with the major Caesars-related sites, which are operated in partnership with 888 Holdings.

888 is one of the oldest of all online-poker companies, predating both PokerStars (Rational Group) and PartyPoker (bwin.party) in the online sphere.  888’s first big brand was Pacific Poker, and while that brand has yet to resurface in the US, the deal with Caesars Interactive involves five major New Jersey sites, including the poker offerings at WSOP.com.  All told, Caesars sites www.HarrahsCasino.com, www.WSOP.com, us.888.com, us.888poker.com and us.888casino.com are all part of the Caesars/888 partnership, all being run in conjunction with Caesars’ Bally’s Atlantic City casino property.

And all that brings up the question of how strong the deals are between Caesars and both 888 and Amaya.  It’s Caesars, after all that played a major role in instigating the New Jersey DGE to throw a politically convenient roadblock in front of the previous PokerStars New Jersey application, a deal Stars reached with Atlantic City’s Resorts Casino Hotel (no longer a part of the Resorts Casino family). 

Resorts Casino AC is now run by Mohegan Gaming Advisors, a part of the large Mohegan Tribal Gaming Authority.  The Mohegans now operate gaming properties in six states, including the giant Mohegan Sun complex in Connecticut, and its pending software deal with PokerStars has been on hold, but should transfer in its entirety to Amaya under the recent acquisition.

Rapid approval of Amaya’s Stars purchase would likely mean the quick introduction of a ResortsCasinoACPoker.com site (or something similar) in the New Jersey market as well.  The Stars application was previously put on hold for two years ending the resolution of federal concerns regarding the cofounder of PokerStars, Isai Scheinberg, who remains at large under a “Black Friday” federal indictment. 

The removal of Isai, son Mark, and a few other key executives from the New Jersey picture is a key part of the process that’s been crafted via the Amaya deal.  If Stars couldn’t win a license in New Jersey, the company was going to have troubles reentering the US market in any state seeking to authorize online poker, regardless of whether the “bad actor” clauses inserted into bills in several states are constitutional or not. 

One mainstream report even described New Jersey regulators as “desperate” to find ways to grow that state’s online-poker revenues, which have fallen far short of the over-optimistic projections used by GOP Governor Chris Christie to help sell the deal to political allies.

And yet, the state’s whole market could get a major twisting in the process of figuring out how a Stars-derived product fits.  Caesars has this existing deal with Amaya, but would it consider jettisoning that deal and going solely with 888 software?  Still other reports suggest that Caesars hasn’t been thrilled with the 888 software package either.  So the opposite question also has to be asked: Does Caesars dump 888 and go with Amaya? 

And if that somehow occurred, would other New Jersey casinos and licensed software providers then launch the same sort of “tainted assets” complaints that have already surfaced in other states, such as California and Pennsylvania? 

Caesars is a big player in the struggling New Jersey casino economy, operating five of the 12 remaining properties and a similar proportion of the online sites launched to date.  The company will have its say. 

How it all plays out will be a very tricky dance.  The state’s Division of Gaming Enforcement must keep all parties happy if it indeed allows an Amaya-owned PokerStars software entity into the mix, and the weak results to date don’t make the available revenue pie appear overly large.  Will the addition of the PokerStars name to the state’s market grow that market enough to offset whatever customers might be cannibalized from competing sites?  That’s a big question for the DGE – and right now, no one truly knows the answer.

Haley Hintze

Veteran poker writer and editor Haley Hintze offers a uniquely independent and entertaining look at many of the most newsworthy topics in poker.  Noted for her lengthy series that helped expose the cheaters behind the Absolute Poker and UltimateBet scandals, she remains a champion of consumer interests and fair play.