APNewsBreak: Licensing talks for PokerStars buyer
- Article by: WAYNE PARRY
- Associated Press
- June 18, 2014 - 9:15 PM
ATLANTIC CITY, N.J. — A Canadian company buying the PokerStars website will begin licensing talks with New Jersey casino regulators aimed at letting the world's largest Internet poker site operate legally in the state, the state's top casino regulator said.
The state Division of Gaming Enforcement will begin the talks Thursday with Amaya Gaming Group, which is buying PokerStars and Full Tilt Poker for $4.9 billion, division director David Rebuck told The Associated Press.
Most importantly, the sale involves PokerStars executives charged with fraud and money laundering resigning from the company. That would appear to clear the way for PokerStars to enter the New Jersey market, something it had tried twice to do before the state suspended it for up to two years, citing the unresolved indictments against the executives.
"We've had discussions with Amaya to reactivate the application, and we plan to begin discussions with them tomorrow," Rebuck told the AP on Wednesday. "We'll look at whatever they bring over."
He said he was "encouraged" by the sale and the licensing talks.
"I think in the long run it will be a good story for New Jersey," he said. "I'm optimistic that they know what the rules are, and I fully expect them to be very aggressive because they want to be here."
Internet gambling has hit a wall in New jersey after just six months. The Atlantic City casinos' online operations posted revenue declines for the past two months.
Since the launch, the casinos have won about $61.9 million online, a far cry from the pace some state political leaders expected. Republican Gov. Chris Christie had estimated they would rake in $1 billion in the first year. Many Wall Street analysts have reduced their estimates to the $200 million to $300 million range, but even those may need to be adjusted downward.
The entry of PokerStars could provide a jump-start to the nascent industry in New Jersey.
Amaya, which has already been approved for Internet gambling operations in New Jersey as the platform for Caesars Interactive, is optimistic about its chances for the PokerStars approval, company lawyer Marie Jones said.
"They are optimistic they will get this done quickly," she said.
No documents have been filed, but Jones said she expected a licensing application to be submitted by next week. Rebuck said he could see Amaya getting approval to operate PokerStars in New Jersey by the fall.
PokerStars tried to buy the Atlantic Club Casino in Atlantic City before that deal fell apart. The casino shut down in January.
PokerStars then partnered with Resorts Casino Hotel, which has been unable to offer Internet gambling while PokerStars was under suspension in New Jersey. A PokerStars spokesman had no immediate comment, and Resorts declined to comment.
The website operated in the U.S. after online gambling was banned in 2006 but exited the U.S. in 2011. It paid a $547 million fine to the Department of Justice but didn't admit wrongdoing.
In a note to investors on Monday, Fitch Ratings called PokerStars' re-entry into the U.S. gambling market "a game-changer."
"The return of the exiled poker giant would inhibit the online poker ambitions of big U.S.- based operators such as Caesars Entertainment, Boyd Gaming and Station Casinos," it wrote. "PokerStars, with its Full Tilt unit acquired in 2012, commanded roughly 70 percent of the U.S. market until authorities shut the sites down in 2011."
New Jersey is one of three states that legalized Internet gambling, along with Nevada and Delaware. But as many as 10 others are considering or recently have considered joining the online market.
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