AGA Opposes PokerStars New Jersey License

John Mehaffey March 5, 2013 877 Reads

The American Gaming Association (AGA) filed a brief with the New Jersey Casino Control Commission today.  This 28-page brief describes why the AGA opposes PokerStars’ application for a license to operate the Atlantic Club in New Jersey.  The AGA claims that this is the first time in its history that it has ever participated in a licensing proceeding.

The document begins with an overview of the AGA’s position.  The group states that they do not feel that the Rational Group, Oldford Group, or any other related company of PokerStars, is qualified to hold a New Jersey gaming license.

The next portion of the brief covers the company’s profile and portions of the Black Friday indictment that pertained to PokerStars’ US facing business.  It goes into details about how the AGA feels that PokerStars’ profited from a business that was illegal, a business that current New Jersey gaming license holders were excluded from entering.  In fact, the AGA points out that a New Jersey court ruled online gambling to be illegal in 2005.   The document describes in detail how PokerStars must have committed fraud to process hundreds of thousands of payments to and from US players.

The AGA holds the opinion that the $731 million fine paid to the US Government by Rational Group is an admission of guilt, regardless of whether the agreement forced the Rational Group and their executives to admit to it.  The group also mentions that Nelson Burtnick entered a guilty plea on charges related to these PokerStars’ transactions.  Burtnick made statements about his and other PokerStars employee’s involvement in the business that he admits violated US law.  The filing also states that five others that helped PokerStars process US payments also entered guilty pleas.  All five of these individuals entered sworn testimony about payment processing that both the AGA and the US Department of Justice claim was illegal.

New Jersey Legal Claims

The AGA claims that the fact that PokerStars operated in New Jersey without a gambling license automatically excludes the company from consideration for licensing in the state, regardless of whether PokerStars can make the poker is a game of skill argument.  That is because commercial poker requires a license in New Jersey and may only operate within Atlantic City according to the New Jersey Constitution.  All games where “the element of chance is a factor that is material to the final result” are considered gambling in New Jersey.

The brief also alleges that PokerStars accepted New Jersey players under 21 years of age.  New Jersey gaming regulations require all players to be at least 21 years old.  The minimum age at PokerStars is 18.  The complaint then goes on to quote laws in a number of states that have specific statutes aimed at online gambling.

The AGA takes issue with language in the DOJ settlement that may imply that PokerStars may receive a license to operate in the US.

That agreement states:

…nothing in it “is intended to or shall limit the PokerStars Companies…from offering real-money online poker” in the United States “if and when it becomes permissible to do so under relevant law”.

The AGA’s opinion is that this statement only makes it so that the DOJ would not oppose future licensing by PokerStars simply because the DOJ does not have jurisdiction to issue gaming licenses.

Of particular interest is that someone named Isai was a leader in a meeting of PokerStars players in the Isle of Man in October 2012.  This was months after Isai Scheinberg was ordered through a settlement with the DOJ that he withdraw from operations at PokerStars.  The brief notes that there is no proof that the Isai mentioned is in fact the former founder of PokerStars.

The brief closes out with a conclusion based on all of the above that PokerStars should not receive a license to operate a gaming establishment in New Jersey.

The AGA brief may be found here.

 

 

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