PokerStars operator Rational Group has seen its application for a New Jersey online gaming licence suspended for two years by the state’s Division of Gaming Enforcement (DGE), over the company’s post-UIGEA activities in the US.
DGE spokesperson Lisa Spengler explained that the decision to hand Rational Group the 2-year suspension was “based primarily on the unresolved federal indictment against Isai Scheinberg” for the “alleged violation” of the Illegal Gambling Business Act and the Unlawful Internet Gambling Enforcement Act (UIGEA).
Spengler also cited the involvement of “certain PokerStars executives” with US online gaming following the passage of UIGEA as further justification for the suspension.
However, she added that within the period the DGE could consider having the suspension lifted and the application process reactivated, if “significantly changed circumstances” were demonstrated, “at which time the Division's investigation of Pokerstars and its affiliated entities and associated individuals will be resumed to assess suitability.
Rational Group responded with a statement saying the company was “disappointed” by the DGE’s decision.
“We note that the DGE will resume the review of our application if our circumstances change,” said director of communications Eric Hollreiser. “We will remain in open dialogue with the DGE and will update them on changes in our situation as they occur.”
The company had been set to launch an online poker and casino offering in New Jersey with Atlantic City’s oldest casino, the Resorts Casino Hotel, after an attempt to acquire the Atlantic Club Casino failed.
However, with the operator having seen indictments unsealed against a number of its executives in April 2011 for its continued activity in the US market after the passage of UIGEA, its potential entry to New Jersey had met with fierce opposition from industry body the American Gaming Association, which warned that the operator’s involvement in the licensing process set “a dangerous precedent.”
Such concerns were raised despite the company reaching a settlement with the US Department of Justice in July 2012, as part of a $731m deal which also saw the Isle of Man licensee acquire its former rival Full Tilt Poker.
As part of that agreement PokerStars founder and majority owner Isai Scheinberg was required to withdraw from any managerial or director role in the business. Scheinberg’s son Mark, now CEO of the company, also paid a personal settlement of $50m for his role as a major shareholder in the business.
Under the terms of each settlement, neither Rational Group nor Scheinberg admitted any wrongdoing on their part for post-UIGEA activities.