David Baazov Spent $4.9 Billion to Purchase Rational Group, Which Owns PokerStars and Full Tilt
The latest reports indicate PokerStars and Full Tilt Poker could be licensed by October of this year. Before the Black Friday scandal broke, the two gaming companies were the biggest US gaming sites. Now both are owned by Amaya Gaming, which might open the door for the long-banned companies to operate in the United States again–at least part of it.
The reports suggest “unnamed sources” in New Jersey say that the two gaming sites could be about to receive licensing from New Jersey’s gaming regulators. The Division of Gaming Enforcement suspended the licensing process for PokerStars last December, but it never denied the company’s application.
Instead, the DGE suggested it would suspend the license process until PokerStars either got its dispute with the U.S. government resolved, or when the executives which still had pending legal issues with the US government left the company. The purchase of Rational Group (the parent company of PokerStars and Full Tilt) by Amaya Inc. means Isai Scheinberg, one of PokerStars’ founders, will leave the company.
When he does, New Jersey gaming officials might be ready to move ahead with licensing.
No Official Confirmation Yet
No official from the state of New Jersey has confirmed the rumors, so it should remain just that for now. Most industry observers agree that the DGE looks with favor on Amaya’s purchase of Rational Group, because the Scheinberg family will leave the management circles of Full Tilt and PokerStars.
Amaya is said to have received a preliminary approve to prepare both brands for launches before an August 11th deadline. This would give both brands over a month to tweak their websites, therefore anticipating and meeting any technical and regulatory standards necessary to receive a license.
Structure for Licensing Unclear
The question at hand is how the PokerStars licensing with be structured. Previously, it was assumed that PokerStars would partner with Resorts Casino on a gaming site. The Division of Gaming Enforcement has said the PokerStars/Resort brand license would not be reconsidered, even if a restructuring took place. Resorts Casino seems likely to be the brand associated with PokerStars, given the two already have a partnership in place, but other options are available.
Amaya Inc. Already Licensed
Amaya Gaming might use a different method to receive the proper licensing. Amaya is a software provider for many of the online gambling companies in the world. It has a surprising number of licenses in any given market, because they supply products to so many different operators.
Amaya Gaming’s Complicated Licensing Deals
One possibility is for Amaya to adjust its current licenses in order to include the Rational Group properties among their own licensing. Amaya Inc.’s software is used at the Golden Nugget poker site, so David Baazov’s company already has the proper licensing to make things happen.
Amazingly enough, Amaya Gaming also has partnerships with several of the other top competitors in the New Jersey gaming market: Borgata, Caesars Interactive, and Trump Plaza. This might create conflict among the various companies, because one or more of these operators might object to Amaya using their partnerships to bring PokerStars and Full Tilt into the Atlantic City market.
Resorts Casino the Likely Partner
However the deal is patched together, it’s fairly certain that Resorts Casino will be the partner for PokerStars. The two signed a deal in June 2013 and were moving ahead with plans until December of last year. Resorts Casino knows the huge advantage of partnering with PokerStars, so they seem willing to wait until they can launch with the biggest online brand in the world.
Amaya’s David Baazov has said that re-entering the U.S. market is a top priority for PokerStars, now that it is under new management. Having spent $4.9 billion to purchase the Rational Group, Baazov and his financiers are going to want to see financial results soon.
Black Friday Legal Case
In April 2010, a U.S. federal judge called for the seizure of the domains of PokerStars and Full Tilt, citing a number of alleged crimes the companies had committed under provisions of the UIGEA and 1961 Wire Act. Because the two companies were the largest poker sites still accepting US players, the gaming industry began calling that day Black Friday.
In 2012, PokerStars agreed to pay the U.S. government over $700 million to settle the charges, though key executives with PokerStars still have charges pending with the United States authorities. After online casinos and poker sites were legalized by New Jersey, Delaware, and Nevada, PokerStars found the uncertain nature of their legal situation allowed the regulators in those states to bar them from proper licensing. The purchase of Rational Group by Amaya therefore clears up some of those concerns, though “bad actor” laws might keep PokerStars barred from some states.
