Inside Gaming: PokerStars effort to buy Atlantic City casino raises many questions
The idea that online gaming giant PokerStars would buy the struggling Atlantic Club Hotel-Casino in Atlantic City brings additional intrigue into the ongoing Internet gambling legalization debate.
The Wall Street Journal reported Thursday that PokerStars is negotiating to purchase the Boardwalk property from private equity group Colony Capital for less than $50 million.
This part is not a surprise. For that price, acquiring the casino originally built by Steve Wynn in the 1980s as the Golden Nugget and most recently operated as the Atlantic City Hilton is practically a steal.
One question, however, supersedes all others. Can PokerStars which agreed to pay $731 million to the federal government in August to settle a nine-count criminal indictment actually gain licensing approval from the ultra-strict New Jersey gaming regulators?
Hot off the DOJ presses: PokerStars is the hero!?
It’s all moving … Nelson Burtnick landing at Newark airport to surrender, and the DOJ puts out their word just before lunchtime across the river in New York City. Full Tilt players will have the chance to be reunited with their beloved bankrolls … all thanks to the fine and awesome work of our Department of Justice in the United States of America. Phew, now everything can return to normal, lol.
Details will be everywhere, for sure … so pick your slant and poison — whether it’s 2+2, Diamond Flush, Gambling 911, Twitter or whatever. The PokerStars spin machine got ahead of the game first with their version of near-billion-dollar events.
Read below for what the most powerful Preet Bharara DOJ has to say about it all:
Players on edge with latest claims that Stars deal to pay back Tilt players before 2013 is #DOJApproved
Just when the poker masses had all but given up on the latest rumor about PokerStars settling with the DOJ … In just a few sentences published early on Friday in Poker Player Newspaper, Wendeen Eolis threw fuel on smoldering embers of hope for those still dreaming of someday seeing monies attached to Full Tilt Poker.
And though some are beginning to doubt yet again after more than one full business day, Wendeen’s assertion that Stars had indeed settled with the DOJ, and that Full Tilt players will be paid back in full (and rather soon!) was enough to make this rather vocal skeptic do a double-take and re-think. I know Wendeen chooses her words carefully, and she wouldn’t move in like this without the goods unless she has gone completely off her rocker — a possibility she addresses in a follow-up PPN update.
So while the poker world awaits some semblance of official word … I‘m gathering up $60 to pay off a few possibly lost bets, as I’ve had probably a 170-degree POV flip — and now see a DOJ vs. Online Poker endgame that might-could actually include PokerStars resolving its civil matters at the same time Full Tilt and UB players get made whole!
Probably a good time to put out the disclaimer, I’m not a lawyer but … Even though I still see the notion of criminal indictee #1 buying his freedom by offering to take the assets of criminal indictee #3 off the government’s hands for a fire-sale price as rather ridiculous, here’s some recent DOJ-SDNY hand history that I believe supports what Wendeen might be suggesting:
Murmurs and hubbub rising from the Full Tilt/GBT rubble
You hear a lotta stuff … ok, maybe not so much now without 2+2 … but regardless, I go to our Manhattan-based pal Wendeen in matters of DOJ vs. Full Tilt/PokerStars et al … and sure, even though I was all over so-called poker radio screaming that there wasn’t a chance the supposed GBT/Full Tilt bailout plan would go through, Pokerati was just spouting on “instinct” and maybe “hunch” while Wendeen was collecting actual data to either confirm or deny various pieces of the ongoing online poker saga unfolding in her SDNY back yard.
Check out her latest in Poker Player Newspaper — Full Tilt Creates Drama at PokerStars. Wendeen doesn’t seem as willing as I am to flat-out scoff and pshaw at any suggestion that PokerStars could swoop in and “save” Full Tilt (while saving itself for less than a billion) … but she does provide more facts to put any emerging hubbub in context — including some rather interesting narrative about PokerStars’ designs on going public and American banking giant Morgan Stanley’s interest in online poker sites prior to Black Friday.
A good companion piece of reading is DiamondFlush’s GBT post-mortem, which includes the email Laurent Tapie sent to his extended inside circle, giving not only his presumably honest perception of the deal as it went afoul, but also insights into some of the hard, painful numbers in play.
Online poker has been a conspiracy to fool US government, Beckley admits
My bad: Brent Beckley, guilty of online poker.
DOJ prosecutors keep moving up their ladder of bad guys in the unlawful internet gambling case against Isai Scheinberg et al. Brent Beckley, the 31-year-old father of two and a co-owner of Absolute Poker, told a Manhattan judge he did indeed lead a company that deceived US banks to circumvent US law, and acknowledged conspiring with others to commit bank and wire fraud. Beckley will likely serve 12-18 months in prison as part of a plea agreement, Reuters and the New York Times report.
This probably doesn’t bode well for other Black Friday defendants who face more severe charges and still haven’t stepped foot into US court. Though I haven’t seen actual documents on this one yet (readers please feel free to send a link or pdf), I’d be willing to bet (on this-here internet?) that the plea deal does not cut Beckley any slack because Absolute Poker patches said “dot net”.
Alleges PokerStars mafia connek; declares sports betting a game of skill, too
The DOJ has laid out more of its case against Isai Scheinberg, Ray Bitar, et al — in a 58-page response to the response from two Black Friday indictees, payment processor Chad Elie and the Utah banker John Campos.
The People vs. Online Poker
Among other denials, Campos and Elie sought to get much of the case thrown out on the grounds that the UIGEA is a bad law and/or poker isn’t gambling. With the action back on the DOJ, Preet Bharara assistant Arlo Devlin Brown delivers some rather compelling legal composition (the best writing is in the footnotes, imho) that reads like a big STFU from SDNY … with a message of hey, better watch it or we could indict the whole damn poker industry!
I’m paraphrasing, obv … but here’s the full Government’s Response to Defendants’ Pre-Trial Motions. They purport to have a mountain of evidence ready for trial … and show a century’s worth of precedent to snuff out any hopes that poker people could actually win this case.
With the standard disclaimer of “I’m not a lawyer but …” some fascinating elements include:
Update on Domain Name Seizures
The arrest warrant in rem in the parallel civil forfeiture case (11 Civ. 2564) involving PokerStars, FullTilt, and UB is out. This is the instrumentality through which the domain names were redirected by the FBI to the notices up on the sites. The only sites affected by this are: www.pokerstars.com, www.fulltiltpoker.com, www.ub.com, www.ultimatebet.com, and www.absolutepoker.com.
The warrant directs the .com registrar (VeriSign) to direct the name servers to the addresses specified in the warrant or such other name servers or IP addresses as directed by the FBI.
These domains have been locked by the registry (and by the registrar in the case of www.ultimatebet.com – this domain remains with GoDaddy pending a final disposition of the domain seizure case in Kentucky) and now cannot be moved without a court order or the consent of the Department of Justice. I understand that the rest of the domains (save and except for www.ultimatebet.com) are registered with foreign registrars.
Here’s the actual indictment, in the case of DOJ vs. Scheinberg et al.
UPDATE: Sorry for the bad link … have put it in a more easily accessible place via Scribd:
UPDATE: Going live on Donkdown Radio to try to help online poker degens make sense of it all. http://donkdown.com/radio
Forbes associate editor Nathan Vardi published an article this morning entitled “How Casino Mogul Steve Wynn Went All In On Online Poker and PokerStars”, which despite the lame-o “All In!” header, is a compelling high-seas tale of how PokerStars founder Isai Scheinberg wooed and won the reticent Steve Wynn based on Vardi’s interview with the casino titan.
Because where else could billionaires come to grips with their future together but on a fabulous yacht in exotic locations and make the deal (surprisingly) even-steven 50-50?
I couldn’t help but think of Vardi’s post as if told in a novella….
When Scheinberg Met Steve
Chapter 1: The First Meeting
Nearly two years ago billionaire Las Vegas casino mogul Steve Wynn met Isai Scheinberg, the founder of PokerStars, the world’s biggest online gaming firm, for the first time. Scheinberg generally avoids traveling to the U.S., but the meeting took place on Wynn’s boat while it was anchored in the Mediterranean Sea. Over a three-hour lunch, Scheinberg tried to convince Wynn that the two of them should work together to regulate online poker in the U.S. with an eye toward setting up a joint venture.
This is an odd one … never before heard much out of Israel against online gambling, despite there being no brick and mortar casinos there (I’m pretty sure) … in fact, Israel is something of a haven — if not a headquarters — for all sorts of online gambling related businesses. Yet supposedly, Israeli police just ordered all its ISPs to block access to IP addresses associated with overseas online gambling websites.
Don’t know many details, other than that the ISPs were given a list of banned sites, supposedly including some biggies … but the only known name so far has been Victor Chandler.
Sounds taxy. Anyone have Isai Scheinberg’s number so I can give him a call and say, yo, Mr. Moneymaker, what’s up? Surely he’s gotta know, or maybe live down the street from someone who does …
The ISPs were given 48 hours to respond, and several reportedly have already asked for an extension to a week.
ALT HED: Israel is the New Kentucky?