Last Minute Changes Leave PokerStars Facing a 5 Year Ban With a Vote Coming Monday

2 years ago
PokerStars May Face Five-Year California Ban
22 Aug

Pre-vote political jostling has led to a last minute amendment being made to the Internet Poker Bill which could see PokerStars facing a mandatory five year ban and $20 million fine for being seen as a “bad actor”. The term “bad actor” is not as we may know it in relation to poor performances in a Hollywood movie, but in a poker context it becomes very serious for PokerStars and is the main sticking point to a bill that has been discussed now for nearly a decade.

After the Unlawful Internet Gambling Enforcement Act of 2006 (known as the UIGEA Bill) become law, some online poker rooms like Full Tilt and PokerStars took legal advice (from their own lawyers of course) and came to the conclusion, dubious though it was, that to continue offering online poker that to the layman appeared flagrantly breach the terms of the UIGEA Bill was, in fact, legally acceptable. When the Department of Justice (the DOJ) acted on Black Friday and closed their sites down to US customer and seized their assets, it was clear the US legal system did not agree.

Now that the Internet Poker Bill is heading for a crucial vote on the Assembly Floor of the Californian legislature, the various stakeholders are keen to ensure that those deemed to have breached law, classed as “bad actors”, are given an appropriate penalty for being so bold as to have broken US law in the first place. The standard penalty is a 10 year ban with a $60 million fine, but PokerStars were hoping that with the support of their business partners, which include groups such as the Morongo and San Manuel Mission Indians, as well as three Los Angeles-area card rooms , amendment AB 2863, tabled by Assemblyman Adam Gray, would go through, which watered down the most severe penalties into a one-time fine of $20 million or a five-year ban.

Unfortunately for PokerStars the various stakeholder groups which includes casino operators and various Indian tribes with business interests throughout gaming and internet poker did not like what they saw as PokerStars and others in a similar predicament receiving a “get out of jail free card”. The issue of bad actors and penalties to existing poker rooms has stifled progress of this bill for years and it is clear it remains a massive sticking point even as a vote approaches. The bill was even withdrawn for “final negotiations” when no agreement could be reached.

Now it appears there has been progress and it is bad news for PokerStars. It looks like the bill will include proposals for both a $20 million fine and a mandatory five year ban, drawing a political line in the sand. Whilst pokerstars and their partners have published a letter denouncing the proposals and objecting to them, it is unclear if they have the numbers to scupper the bill. Even if they have the numbers to vote the bill down, the added problem is that without the bill in one form or another internet poker cannot be legalised. It is catch 22 for Amaya.

Amaya argue as new owners they were not responsible for the decisions to breach the UIGEA Bill and they feel it is unfair to be punished for the legal indiscretions of their predecessors.

If the bill passes in its current form, other poker rooms in the industry will have an opportunity to seize the lion's share of the market in what would be a legalised internet poker arena in California. This would undoubtedly be very frustrating for Amaya, who already operate legally in New Jersey.

Political posturing usually goes on right up until the vote itself so watch this space for further developments. The bill must pass the Assembly and be approved by the Senate before August 31st, so time is of the essence, but reading the comments around this interesting issue it is clear there is momentum for this bill to pass, so PokerStars need to get their thinking caps on to ensure that if poker is legalized in California, which is appears likely to be the case as soon as early this coming week, they are not banished from benefiting from it.

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Malcolm comes from Consett in the North East of England and is an avid poker player and writer.Read more


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