The nation’s top casino lobbyist, reiterating his call for federal legislation for online poker, used the proposed Atlantic Club Casino Hotel sale to underscore his concerns about individual states creating their own regulations for Internet gambling.
Frank Fahrenkopf, president of the American Gaming Association, told an industry conference Wednesday in Las Vegas that federal legislation would set the legal and regulatory framework for Internet gambling across the country.
The AGA, a national lobbying group for commercial casinos, has been pushing for a federal law that would restrict online gambling to poker, but Congress has resisted. The AGA fears that a patchwork of individual state laws could lack stringent consumer protections for the emerging Internet gambling market.
Fahrenkopf pointed to the proposed Atlantic Club sale in Atlantic City to emphasize his concerns. The Rational Group, parent company of online global gambling giant PokerStars, has announced plans to buy the Atlantic Club for an undisclosed price.
Last July, PokerStars agreed to pay $731 million to settle a civil lawsuit by the U.S. Justice Department involving money laundering, bank fraud and illegal gambling charges. PokerStars did not admit guilt or wrongdoing in the settlement, which stemmed from the company’s Internet betting operations.
Fahrenkopf said PokerStars, through its parent company, is on the cusp of entering the New Jersey casino market in the proposed Atlantic Club sale.
“Those people, for many, many years, blatantly violated U.S. law,” Fahrenkopf said of PokerStars in keynote remarks to the iGaming North America Conference carried over a live webcast.
In response to Fahrenkopf’s comments, the Rational Group issued a statement saying that “PokerStars has never violated U.S. law.”
“Unlike other companies in the gaming industry that admitted to violating U.S. law, our settlement agreement with the U.S. Department of Justice explicitly says that we admit no past wrongdoing and we are entitled to apply for relevant gaming licenses in the U.S. when they are made available,” company spokesman Eric Hollreiser said in the statement.
The Justice Department settlement cleared the way for PokerStars to enter the U.S. market and begin taking online bets once Internet gambling is legalized in the United States. However, parent company Rational Group still needs a New Jersey license to buy the Atlantic Club.
“PokerStars is one of the largest and most respected Internet gaming companies in the world,” Hollreiser said. “We are in good standing with governments around the world, holding licenses in France, Germany, Italy, Spain, Denmark, Estonia, Belgium, Malta and Isle of Man. We will continue to work positively with regulators in New Jersey and elsewhere whenever they review our qualifications.”
The Casino Control Commission and the Division of Gaming Enforcement, the New Jersey agencies that regulate the Atlantic City casino industry, have pledged to scrutinize the Atlantic Club deal before voting on the Rational Group’s petition to take over the casino.
In a statement Wednesday, division spokeswoman Lisa Spengler noted the agency will conduct an extensive background investigation of the Rational Group, followed by a report to the commission. The division is expected to take a close look at PokerStars as part of its investigation.
Fahrenkopf said it would be difficult for New Jersey casino regulators to find PokerStars unsuitable for Atlantic City because the sale is seen as a savior for the financially troubled Atlantic Club.
“The economic situation in Atlantic City is very tough, and it may mean jobs,” he said.
Fahrenkopf’s call for federal Internet gambling legislation comes as New Jersey awaits action by the state Legislature and Gov. Chris Christie on the state’s proposed online betting law. Christie conditionally vetoed the bill Feb. 7, saying he wants to restrict Internet gambling to a 10-year trial period. The Legislature is expected to revise the bill next week to comply with the governor’s wishes and have him sign it into law.
New Jersey’s Internet bill would allow online betting on the slot machines and table games at the Atlantic City casinos. New Jersey, Nevada and Delaware are among the states that are considering or have approved Internet gambling. Delaware expects to begin online wagering on casino slot machines and table games in September. Nevada has started in-state poker play over the Internet, but is looking to expand to include bets from gamblers in other states.
Steve Lipscomb, founder of the World Poker Tour, said government and industry cooperation is key to getting Internet gambling laws approved. Lipscomb, who was another speaker at the iGaming North America Conference, said what is happening in New Jersey, Nevada and Delaware is an important first step in the nascent U.S. Internet gambling industry.
Lipscomb disagreed with Fahrenkopf’s concerns about PokerStars. He said he believes the U.S. Internet market would get a boost by having PokerStars, the world’s largest poker website, involved in its development.
“If the PokerStars of the world are in the mix, I think there is a good chance of moving forward,” Lipscomb said.
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