PokerStars’ ambitions at a comeback in the United States are being thwarted at every turn, it seems, as gambling operators within newly regulated states show resistance towards the world’s biggest online poker site.
Twelve months ago, PokerStars was looking to make its mark in New Jersey, with its attempted takeover of the Atlantic Club in Atlantic City. PokerStars’ parent company, the Rational Group, had initially sought to buy the ailing Atlantic Club for the heavily discounted price of $15 million – a deal that would have served as a platform for a license to enter the state’s then-imminent online casino market. However, Stars was rebuffed at the last minute, which meant months of costly litigation before the poker site eventually abandoned the land casino as a lost cause. Since then, the American Gaming Association (AMA) has made no bones about its opposition to PokerStars entering the New Jersey market.
CTBA Just Says No
Could it be that similar forces are at work in California, where the California Tribal Business Alliance (CTBA) pledged this week that it would “strongly oppose any legislation which allows PokerStars to participate” in any proposed regulation within the state?
The declaration follows reports that the online poker giant had recently entered negotiations with the Morongo Indians, who operate the Morongo Casino Resort & Spa in Cabazon.
Another report by the Blue Sky Consultancy Group suggested that California would benefit from increased revenue of $1.01 billion over the next 10 years should it choose to regulate and tax online gaming; that’s assuming that the state gets a 10 percent cut on gross operating revenue. That’s an indication of the amount operators can expect to gross should California opt for regulation, as it’s expected they will in due time.
With a population of over 38 million, the state is considered to be potentially not only the biggest online gambling market in the US, but also one of the biggest in the world. And, when you consider the power and reach of PokerStars – a company that has complete dominance in the online poker market everywhere outside of America – you can see why indigenous operators inside California would want to fend off its potential infiltration.
The CTBA is an association made up of California’s three largest tribes – the Pala Band of Luiseño Indians, the Paskenta Band of Nomlaki Indians, and the Viejas Band of Kumeyaay Indians, all of whom have long held gaming interests within the state. CTBA chair Leslie Lohse stated this week that the association would fight to block all attempts by PokerStars to enter the California market, warning that the company’s inroads had come at “a particularly opportunistic time”, as the State Legislature prepares to debate two separate proposals to license online gambling.
Lohse said that only companies with the “highest regulatory standards” should be awarded a licence, citing PokerStars’ failure to withdraw from the US market following the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, as well as the fact that the site was shut down by the Department of Justice in 2011 in its Black Friday seizure, as evidence that it had previously flouted US law.
Violating the Law
While CTBA accepted that Stars had agreed to a $731 million settlement with the US government, it drew attention to the fact that the Department of Justice had accused the company of conspiracy, money laundering, bank fraud and violations of the Wire Act.
Lohse said the CTBA member tribes would work to ensure new legislation would “impose strong controls, mandate disclosures, and promote the highest standards of integrity in the gaming industry.”
While PokerStars has done many good things for the game over the years, its stranglehold over competition in Europe has stifled the market. If poker is to succeed in America, therefore, it needs a diversity of local operators in order to grow the market holistically. Under these terms, perhaps the CTBA’s resistance to foreign invaders makes a great deal of sense.