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POKERSTARS AND THE AGA IN AC HOLDING PATTERN

Poker
By Wendeen H. Eolis
Poker Player Newspaper
April 9, 2013

The application by Poker Stars for an Interim Casino Authority (ICA) license at the Atlantic Club Casino and Hotel in Atlantic City appears to be in limbo for the moment. The Casino Control Commission (CCC) has yet to announce the next steps in the process, but the Communications office of the CCC has confirmed that the licensing deliberations take place in meetings open to the public.

AGA and PokerStars Are Subject to a Unique Bureaucratic Process

Here is a quick review on recent events and a primer on the bureaucratic process that pits the American Gaming Association (AGA) against PokerStars in a bid to delay if not deny the online poker company’s entry into the American-based gaming market.

The AGA has opposed PokerStars’ application for a license and has asked the New Jersey Division of Gaming Enforcement (DGE) for permission to participate in its license application hearing.  PokerStars has shot back an indignant response to the DGE objecting to the AGA request. It has also leveled pointed accusations in the direction of the AGA and Caesars Entertainment as pots calling the kettle black.

The CCC which has responsibility for casino licensing matters received the AGA papers from the DGE. The DGE is the body that accepts petitions; the CCC has no authority to do so.  The bifurcated duties of these two regulatory bodies are clear to them but murky for most of the rest of us.

The DGE may make licensing recommendations but it is the CCC that is charged with issuance, suspensions and termination of casino licenses.  The DGE will be responsible for issuing online licenses to casinos qualified by the CCC.  So now you’ve got the picture of the bureaucratic process.

In the matter of the PokerStars application for an ICA, the CCC has elected to take a step back after the warring parties rattled their sabers relentlessly at each other. The regulators are reportedly studying the situation before proceeding further on the application.

There Is More Than Two Sides to this Story

While we search for more clues as to the likely outcome and the timetable for resolution of the skirmish, Poker Player Newspaper (PPN) continues to explore the respective positions of the various protagonists.  PPN has been advised by a broad spectrum of gaming lawyers and white collar litigators that credible cases can  be made on all sides of this story.

 

For starters, attorneys are deeply divided concerning PokerStars’ decision to continue U.S. facing operations after the enactment of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).  For its part, the U.S. Department of Justice has consistently insisted that the intent of the Act was to end online betting in America, but it has not litigated this issue to conclusion.

The diverse group of lawyers queried, generally concur that the DOJ is involved in its own perception of proper enforcement.  They note, however, that it is the job of a judge to interpret the law. One attorney quipped that practitioners straddle the fence with guesses on how judges might rule and how aggressively law enforcement agencies might pursue their view of a legal infraction. But it is clear that there is room for differences in perspective as to  the legal impact of the Unlawful Internet Gambling Enforcement Act which triggered the grand investigation of online poker businesses.

The Position that Favors Stars

Last week, the position of supporters of the American Gaming Association was fleshed out; this week lawyers lawyers who favor PokerStars’ application for approval of a casino license begin to expound upon their reasons, At the outset, they suggest that Stars had a reasonable legal basis on which to proceed with their U.S. facing operations post UIGEA.  They say the Company was mistaken in its understanding of the risks it took. But the attorneys queried suggest that attempts by competitors to tag the Company as unsuitable for a license are mostly self-serving  efforts  that disregard a legally complicated set of facts.

The commentary in response to various questions posed to the avid supporters of PokerStars is filled with smart legal nuggets. Their fuller comments and responses to PPN questions  will be published in a separate piece— to assure sufficient consideration of the various eye-opening  perspectives.

Meanwhile, for the time being PokerStars, the AGA and the public have been left to cool their collective heels. The CCC has published the agenda for its April 10th meeting with nary a word on the PokerStars application.  Stars has still copped plenty of attention in a flurry of activity surrounding the seaside gambling mecca this past week.

Linda Johnson Lobs Another April Fool’s Day Joke

Monday brought an April Fool’s Day joke from “First Lady of Poker” Linda Johnson.  In an email blast, poker’s “hostess with the mostess,” informed a world of poker friends she was leaving Las Vegas for her dream job as a card room hostess at a new venue on the east coast. She allowed that the offer was too lucrative to refuse.

Then her good friend Jan Fisher, poker strategy teacher extraordinaire, chimed in with a follow up email. It cast Johnson as poised to take up residence at PokerStars’ “new card room” in New Jersey. Fisher then described the Garden State in terms the Governor might not relish, laying on thick that the big draw was  big bucks.

Friends of the perennial April Fool’s Day pranksters found the imagined scenario hilarious, but a few folks at the Atlantic Club and Poker Stars as well as an aide at the New Jersey Statehouse who learned about the missives that morning were a bit less amused.  By afternoon the story evaporated with Johnson proclaiming to her “Wednesday Poker Discussion Group, “The joke worked.”

Showboat is on the Ropes 

The next stunning rumor to surface in AC last week was circulated discretely among gaming industry insiders. The facts have yet to unfold, publicly, but according to a highly respected gaming lawyer with close ties to the powers that be at Caesars, the largest casino stakeholder in New Jersey has decided to close or sell its Atlantic City Showboat property.

Governor Chris Christie and casino regulators are now forced to consider the impact of a lot more jobs in peril—beyond the floundering Atlantic Club Casino and Hotel—which is depending on the anticipated PokerStars bailout option.

Does this put more pressure on regulators to embrace PokerStars and the boatload of cash it is reportedly ready to lay out in this economically ailing state?  Political pundits and gaming industry insiders are beginning that analysis.

The CCC and DGE: Bifurcated Roles

At the end of the day, the New Jersey Casino Control Commission will determine if PokerStars is to be granted an Interim Casino Authorization (a temporary license) for the Atlantic Club Casino and Hotel.  According to a source at the Casino Control Commission, the Division of Gaming Enforcement will rule on online gaming licenses, granting  one to PokerStars only if it first passes muster for a casino license in the State.

Borgata Poker Room Changeover

While the warring protagonists and an array of bureaucrats wrestle with the conundrum of PokerStars as hero or imposter amid mounting fear of further woes for the New Jersey economy, let us applaud Atlantic City’s Borgata Hotel and Casino and Spa with a tip of the hat to Stan Strickland, the departing poker operations director and a welcome mat to Vincent Alonge who has been named interim live games poker manager.

White smoke is already billowing, with a decision on the permanent replacement for Strickland.  I’ll have to eat my hat if someone other than Alonge has gotten the nod.  Strickland, the Borgata poker room manager of the past ten years, has just migrated to the Sunshine State to head poker operations at the Isle Casino. He built and maintained, seamlessly, the most profitable poker room and the most loyal base of poker players in Atlantic City.

Alonge defected from the Taj Mahal Casino Poker Room a year ago to join Strickland’s operation as an executive poker host. In another era, the Taj featured the most profitable poker room in town.  Alonge’s casino experience includes table games as well as a longtime position as a poker shift manager. And  at a time the Borgata is putting stronger emphasis than ever on its perennial commitment to customer service, Alonge looks like  the quintessential candidate to  invigorate that initiative. Alonge is believed to have been Strickland’s #1 pick as his replacement.  The selection of Alonge as Stricklnd’s replacement “puts the Borgata poker room  in extraordinary hands” according one longtime player who has his pulse on the thinking inside the card room.

This Too Shall Pass

Previously proven prognosticators are also predicting that Poker Stars will receive approval in the U.S. for a casino license—sooner than later.  For the time being, PokerStars seems intent on keeping its eye trained on the ball and not on the flak. Casino marketing executives and poker personnel from New Jersey to California say Stars is engaged in bold efforts to cultivate relationships with commercial casinos, tribal gaming properties, and specialized gambling venues, at the ready to enhance their brand across the country.