Does CEO settlement open US door for PokerStars?
News of $50m settlement with DoJ could be one of very few remaining barriers to US re-entry
Mark Scheinberg’s $50m settlement with the US Department of Justice naturally raised a few eyebrows, but its relevance to the egaming sector beyond some lazy schadenfreude is harder to determine.
On the one hand it can be viewed as the co-owner and CEO of the online poker giant simply clearing up any potential issues with the US authorities and drawing a line under the affairs of Black Friday. On the other it is hard to ignore the timing of the deal in the light of the failed deal to acquire the Atlantic Club, and its potential relevance to the poker firm’s ambitions in the US market.
The deal is a full and final settlement with the US authorities to put to bed any potential claims for distributions paid to Scheinberg by PokerStars during its post-UIGEA operations. PokerStars head of corporate communications Eric Hollreiser was quick to point out it was a pro-active move on the CEO’s part. “The agreement is not in response to any action that had been brought against Mark and contains no admission of wrongdoing, culpability or guilt on his behalf,” he said.
The current CEO of PokerStars was not named in the criminal indictments handed down on Black Friday and his on-going involvement in the operation of the business has not been questioned by the authorities in the US. He remains the head of the group’s executive team and this deal seems a clear sign that he doesn’t intend to take a back seat despite the increasing media interest in the Scheinbergs’ involvement in the States.
Exactly what this involvement will be is harder to say following the cancellation of PokerStars acquisition deal for the Atlantic Club in New Jersey. Sources suggest PokerStars is in talks with other casinos in the state and that its application for interim authorisation is also still on-going, but there remains some fierce lobbying against it in the Garden State. Moreover, time appears to be fast running out for PokerStars to nail down a deal in New Jersey, with today’s news the state’s regulator has imposed a 29 June deadline for online partnerships throwing yet another spanner into the works.
But with a clear settlement from both the firm and its CEO of all charges with no admission of guilt the path back to the US market does seem to be there. Among the remaining barriers is the so-called ‘bad actor’ clause “ imposed by Nevada and proposed by several other states including California “ which seeks to block post-UIGEA operators. But the absense of a bad actor clause in New Jersey leaves the door open there.
The other remaining issue would seem to be around the firm’s founder Isai Scheinberg. Although he is no longer involved in any management role at the firm his role as a major shareholder and founder continues to cause media interest and act as a target for those who want Stars kept out of the US. If this deal with Mark Scheinberg can be followed by a similar one for his father then the US land-based sector should be very worried indeed.