The PokerStars Journey in 2016: Success, Scandal, and the Road Ahead

Posted on December 26th, 2016 by Alana Markoff
PokerStars New Jersey US 2016 Daniel Negreanu

Daniel Negreanu did plenty of campaigning in 2016 for PokerStars, but for all of its successes the Amaya-owned platform encountered over the last 12 months, an equal amount of setbacks were met. (Image: alchetron.com)

PokerStars has done what was once considered the unthinkable in returning to the United States.

The world’s largest online poker platform was forced out of the US five years ago on April 15, 2011, a day that would become known as poker’s Black Friday.

As Americans were scrambling to file their taxes, the US Department of Justice (DOJ) seized the domains of PokerStars and Full Tilt Poker for violating the Unlawful Internet Gambling Enforcement Act (UIGEA). The federal statute passed in 2006 made it illegal for banks and financial institutions to process digital payments related to online gambling.

Fast-forward to 2016, and PokerStars’ “bad actor” reputation had kept the digital poker powerhouse on the sidelines of the regulated iGaming markets in Nevada, Delaware, and New Jersey.

But after being acquired in part of a $4.9 billion deal in June of 2014, PokerStars’ new owner Amaya, the Canadian-based conglomerate that had previously focused on business-to-business gaming solutions, sought to return PokerStars to America.

Its target was the Garden State.

Teasing and Poking

Throughout much of 2015, Amaya executives and New Jersey politicians hinted that the New Jersey Division of Gaming Enforcement (DGE) was close to approving Amaya’s iGaming application.

New Jersey State Senator Ray Lesniak (D-District 20) had suggested as early as January 2015 that PokerStars’ approval was imminent. But the DGE took its time in investigating all aspects of PokerStars’ new leadership, while Governor Chris Christie (D) deflected allegations he was behind the delay.

The DGE finally approved PokerStars and Full Tilt on September 30, 2015. PokerStars officially returned to New Jersey on March 21, 2016.

“PokerStars is the global leader in online poker . . . We are honored and excited to now bring these experiences to New Jersey,” Amaya CEO David Baazov said at the time.

In May, Amaya dissolved Full Tilt to reduce costs and consolidate its customer base.

PokerStars got off to a fast start in New Jersey and quickly overtook the World Series of Poker/888 room, and Party Borgata. But the fun was short-lived, as the WSOP/888 shared room closed 2016 as the leader in the state.

Black Eye on Bad Actor

The last thing PokerStars needed was fresh controversy. After somewhat repairing its image, at least in the eyes of regulators in New Jersey, David Baazov, Amaya’s founder and CEO, became the subject of a massive insider trading case in Quebec.

Baazov was accused by the province’s securities regulator of providing confidential information on Amaya’s activity to outside investors. Baazov denied any wrongdoing, but resigned from the company he founded in August.

The Baazov developments won’t do PokerStars any favors as it refocuses its legalization efforts on California. Amaya spent an untold amount of money campaigning for online poker throughout the Golden State, and shipped several of its marquee ambassadors including Daniel Negreanu and Chris Moneymaker to various events.

The complicated gaming environment in California consisting of the commercial card clubs, Native Americans, and state politicians led to iGaming stalemate in 2016. The subject of whether once “bad actors” like PokerStars should be allowed in remains a contentious concern.

Looking ahead, various states are poised to consider online gambling legislation in 2017. And PokerStars will do everything in its power to be dealt into the game.

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