Ralph Caputo Spared No Words, Describing PokerStars Co-Founder Isai Scheinberg as a “Fugitive”
Ralph D. Caputo, a New Jersey Assemblyman long associated with the state’s gambling industry, heavily criticized PokerStars this week. Caputo, the Majority Whip and head of the Assembly’s Tourism, Gaming and Arts Committee, described PokerStars as a “disgraced company” and said the Isle of Man based company has a “history of bad behavior”.
In a piece he wrote for NJ.com, the Assemblyman warned readers that Amaya Gaming had purchased “the fruits of a poisonous tree”. Earlier this month, Amaya Inc. spent $4.9 billion to purchase Rational Group, which is the parent company for Full Tilt and PokerStars.
Division of Gaming Enforcement Should Not Rubber-Stamp
Assemblyman Caputo also suggested that the Division of Gaming Enforcement should scrutinize the company’s past and present before allowing PokerStars to enter the New Jersey market.
In December 2013, the DGE suspended the licensing process for PokerStars, due to its bad actor status. PokerStars had a deal in place with Resorts Casino to provide the software for its official gaming websites. Instead, their license languished for the past 9 months.
PokerStars Set for Online Licensing
The acquisition of Rational Group by Amaya offers a chance to revisit the licensing. Amaya Gaming has a good reputation in New Jersey, as it is licensed to provide software to several of the gaming sites already in operation. It is thought that PokerStars and Full Tilt are weeks away from tentative approval to launch in the market. October 1st is seen as a potential launch date.
Many in the gaming media view the PokerStars launch view as a good thing. These people believe having the world’s largest poker site in New Jersey might invigorate a struggling market.
“Filthy Hands”
Caputo invoked former New Jersey Governor Brendan Byrne’s stance about a rigorous vetting process for gaming operators. In that case, Governor Byrne wanted to assure land-based casinos had no ties to organized crime, and he famously told the mobsters to keep their “filthy hands off Atlantic City.”
In the PokerStars case, Caputo’s issues stem from the Black Friday scandal, in which PokerStars and Full Tilt Poker had their domains seized by a U.S. federal judge. Executives at those companies were indicated, and it was alleged they had used their influence to get smaller American banks to accept US players for real money gambling, in violation of the UIGEA law. For these practices–essentially accepting USA players after a federal ban–PokerStars has been labeled a “bad actor” by several U.S. states.
PokerStars eventually settled its case with the U.S. government, paying over $700 million in fines to make the case go away. Isai Scheinberg, the co-founder of PokerStars, remains indicted. That’s why Ralph Caputo described Isai Scheinberg as “a fugitive“.
Describes Isai Scheinberg as a “Fugitive”
Caputo added, “While a casino operator is required to go through an exhaustive vetting process, as it stands now, PokerStars and its new owner will face no such scrutiny as the online gaming law requires the company to be licensed only as a vendor; a much less stringent approval process and one that does not require any public transparency.”
The majority whip says that, while the Scheinberg family will be removed from operations at PokerStars, they also stand to collect several billion dollars in the buyout.
PokerStars’s Failed Bid for Atlantic Club
This is not the first time Assemblyman Ralph Caputo has been critical of PokerStars. In May 2013, Caputo applauded the Atlantic Club’s owners for turning down an offer from Rational Group to buy the Atlantic Club and expand into land-based gambling. The Atlantic Club eventually went bankrupt, and closed its doors in January 2014.
The people who approve of the PokerStars connection would say a purchase by the world’s largest poker site might have stopped the losses of the Atlantic Club, and perhaps saved it from bankruptcy. They would add, had the Atlantic Club closing not happened, banks and financiers might have been more willing to invest in the Atlantic City casino market. In that case, the Showboat, Trump Plaza, or Revel Casino might have been saved. Such is idle speculation, but the Division of Gaming Enforcement faces hard choices in deciding whether to allow PokerStars to enter the New Jersey online gaming market.
