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October 25, 2014

U.K. Company PokerStars is trying to enter the U.S. market


PokerStars logoAs laptop computers, smart phones, and tablets become more common, online gambling becomes increasingly popular. Online gambling is an easy, convenient way for busy people to play their favorite casino games on the go. Up until now, the legality of online gambling in the United States has been a bit hazy and unclear. Thanks to a new law granting legality to gambling websites affiliated with brick and mortar casinos, however, Americans in some states are now finding it easier to lawfully gamble online. PokerStars, one of the world's largest online gambling sites, is hoping to cash in on this new law, currently effective in Nevada, Delaware, and New Jersey.

Governor Chris Christie Paves the Way for a New Trend

On February 26, 2013, New Jersey governor Chris Christie signed a bill legalizing online gambling in his state (click to read). According to the law, websites that are affiliated with a brick and mortar casino in New Jersey can lawfully engage New Jersey citizens in betting online. Conversely, websites that are not affiliated with a brick and mortar casino in New Jersey cannot lawfully engage New Jersey citizens in betting online. Experts speculate that Christie, a well-known and important man in American politics, just might have the reputation and winning influence to persuade other states to follow suit. Similar laws already exist in Delaware and Nevada.

PokerStars Buys the Atlantic Club

In response to Christie's new law, PokerStars, a U.K. gambling company, jumped on an opportunity to purchase New Jersey's Atlantic Club. The Atlantic Club is an 800-room hotel and casino which, ironically, does not actually have a poker room. PokerStars is now awaiting permission from the Division of Gaming Enforcement and New Jersey's Casino Control Commission to convert their multi-million dollar purchase into a thriving, brick and mortar casino. Once they receive the go-ahead, PokerStars, which will be automatically linked with the Atlantic Club Casino site, will be able to legally engage New Jersey citizens in both online and on-land gambling. Eric Hollreiser, spokesman for the company, sees great revenue potential for the legalized pairing of online casino companies with brick and mortar casinos. He speculates that the profits for PokerStars in their Atlantic Club venture could be huge.

PokerStars: Shady Past, Bright Future

Isai Scheinberg (Founder of the PokerStars site)Nearly two years ago, PokerStars founder Isai Scheinberg was indicted by the U.S. government for allowing American citizens to engage in illegal online gambling activities. The company paid a $731 million dollar settlement to the U.S.; $547 million went to the government itself, while $184 million went to reimburse customers from other countries who were negatively impacted by the ordeal. The fact that PokerStars was so easily able to fork out this large amount of money earned them the awe, if not the respect, of the gambling industry. This bold and confident financial move may be part of the reason why, in spite of its shady past, the United States is now entertaining the possibility of allowing PokerStars back inside its borders. Although Scheinberg remains indicted and out of the country, the company feels confident in its ability to legally operate in the U.S. This confidence was made obvious by their multi-million dollar purchase of New Jersey's Atlantic Club.

American Gaming Commission Opposes PokerStars Purchase

Not everyone is gung-ho to see PokerStars set up their shingle in the United States. The American Gaming Association (AGA) has filed a brief opposing the maneuver. Large U.S. casinos like Caesars Entertainment, as well as social gaming companies like Zynga, stand to lose substantial revenue to PokerStars if all goes to the U.K. company's plan. Frank Fahrenkopf, CEO of the AGA, generally supports the affiliation of online casinos with brick and mortar casinos, seeing the partnership as a good thing. He has declined to explain the AGA's reason for the opposing the PokerStars move. Some speculate that the AGA would prefer to see American-based online sites hooking up with brick and mortar casinos, rather than losing income to competing foreign-based sites.

Logo of the American Gaming Association (AGA)

Legal Online Gambling: A Trend That's Here to Stay

Experts speculate that Christie's new law will spread like wildfire across the United States, leaving a chain of legally-operating, website-linked casinos in its wake. The trend of online gambling legalization has the potential to entice more customers than ever before, creating improved business for casinos and higher revenue for states. Joe Brennan, director of the Interactive Media Entertainment and Gaming Association, believes that a younger generation of technologically savvy gamblers will be drawn into the habit if gaming becomes legal and available on smart phones, laptops, and tablets. If laws like Christie's continue to crop up across the country, Brennan predicts that online companies will be making a mad rush to get their hands on profitable American casino soil. Online gambling companies, he says, have more money and resources to spend than on-land casinos. The union of the two entities could strike a winning financial balance for all involved.

Online Casinos Paired With On-Land Casinos: The Winds of Change

Before the advent of online gambling, there were only brick and mortar casinos. Gamblers had to travel to their destination, sit down at a slot machine or gaming table, and fork over real money. They heard the noisy whir of the slot machines, felt the cool coins or chips between their fingers, bumped into other gamblers on the crowded floor. It was a rich sensory experience, going to a brick and mortar casino. Today, the winds of change are blowing. It began with Nevada, Delaware, and New Jersey. Governor Christie cast an influential ballot when he legalized the pairing of online gambling sites with brick and mortar casinos. His maneuver basically invited PokerStars, a controversial online gambling company with a questionable past, back into the United States. Some oppose the PokerStars move; others applaud it. One thing is for certain: the American gaming experience is expanding, its landscape changing (Read here), with new and exciting digital opportunities on the gambling horizon.


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