PokerStars’ alleged use of deceit, trickery and other illegal tactics should bar the online poker company from operating in Atlantic City, the nation’s leading casino trade association told regulators in a brief filed Monday.
“The integrity of the gaming industry would be gravely compromised by any regulatory approvals of PokerStars, a business built on deceit, chicanery and the systematic flouting of U.S. law,” lawyers Brian Molloy and David Stewart representing the American Gaming Association said in the brief. “New Jersey’s law and regulatory tradition mandate denial of this petition.”
The Washington, D.C.-based association is seeking to block the issuance of an interim casino authorization to Rational Group, the parent company of PokerStars and would-be buyer of the Atlantic Club Casino Hotel.
The filing to the Division of Gaming Enforcement and Casino Control Commission is expected to be the start of a contentious licensing process that has advocates of both sides alleging ulterior motivations.
“They are motivated by greed,” said state Sen. Jim Whelan, D-Atlantic, who alleged that Caesars Entertainment, the operator of several casinos in Atlantic City, was using the gaming association to oppose the introduction of PokerStars to Atlantic City. “They want to keep foreign investors out...The gaming association is their vehicle.”
Holly Wetzel, a spokeswoman for the association, said the group’s Board of Directors approved of the brief and decision to submit it. She declined further comment.
Isle of Man-based Rational Group is seeking interim casino authorization from the Division of Gaming Enforcement and Casino Control Commission as part of its bid to buy the Atlantic Club for an undisclosed price.
Eric Hollreiser, a spokesman for Rational Group, said the trade association should leave the licensing decision to regulators.
“These are matters for expert regulators to determine, not self-interested partisans picking a public fight,” he said in an email. “PokerStars is one of the largest and most respected internet gaming companies because we work closely with regulators and are in good standing with governments around the world.”
The gaming association in its brief said the corporations and individuals associated with PokerStars “operated as a criminal enterprise for many years” in the United States.
Last July, PokerStars agreed to pay $547 million to the U.S. Justice Department and $184 million to poker players overseas to settle a case, which involved charges of money laundering, bank fraud and illegal gambling. The world's largest online poker operator admitted no guilt or wrongdoing in the settlement.
The association said unlike other businesses that complied with federal laws and stopped taking bets from players, PokerStars disregarded the federal Unlawful Internet Gambling Enforcement Act in 2006 and continued to take bets from U.S. players. That allowed PokerStars to grow its share of the global online poker market from 7.6 percent in 2002 to more than half by 2012, according to the association.
“Any action allowing PokerStars to be licensed would send a damaging message to the world of gaming, and to the world beyond gaming, that companies that engage in chronic lawbreaking are welcome in the licensed gaming business,” the trade association said in the brief. “That message would dramatically undermine public confidence in gaming regulation and could cripple the industry’s public image.”
Whelan, the state senator, said PokerStars represents competition to Caesars Entertainment — which through Bally’s, Caesars, Harrah’s Resort and Showboat Casino Hotel operates a third of the casinos in the city.
Caesars had attempted to lobby to bar PokerStars from recently enacted legislation authorizing Internet gambling in New Jersey, said Whelan, who participated in a conference call with PokerStars and helped to remove that language from the bill prior to the legislature’s approval. Lawmakers decided to insert language that allowed PokerStars to apply for a license but left the decision on whether it should be granted to New Jersey regulators.
Caesars spokespeople could not be reached for comment.
Whelan as well as other lawmakers have said PokerStars’ decision to buy the Atlantic Club may have depended on passage of the Internet gambling bill. The senator said he believed the opposition brief from the gaming association was another attempt by Caesars to derail the competition.
“I’m fed up with these guys and their ‘holier than thou crap,’” he said.
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