GPWA Times Magazine - Issue 24 - April 2013

But as appealing as I find PokerStars’ acqui- sition of the Atlantic Club, I have a hard time supporting it wholeheartedly. What I’mstruggling with is situational ethics and a general belief that cheaters should never prosper. The gaming industry is no stranger to situ- ational ethics. Consider something you and I have debated for a long time. If a dealer in a brick-and-mortar casino gave me an extra $20 on a blackjack payout, I would return the money. You wouldn’t. And most people I know wouldn’t. But if a cashier at a grocery store gave you$20 too much in change, you’d return it. So would I. So would most people we know. Situational ethics. New Jersey’s regulators are known as the toughest gaming regulators in the world. Their investigations are thorough. And they don’t tol- erate anyone with an even remotely question- able background. Just ask MGM. MGM owns 50 percent of the Borgata, and they’ve been trying to sell that stake because one of their business partners in Macau, Pansy Ho, was deemed unsuitable in New Jersey in 2010. New Jersey regulators said she was reli- ant on her father, Stanley Ho, and that Stanley Ho had reported associations with organized crime, which made him unsuitable. But other regulators, like Nevada, had no issue with Pansy Ho and found her suitable. Now in 2013, with Atlantic City failing miser- ably and no takers in sight for MGM’s 50 per- cent share, New Jersey regulators are revisiting their ruling. Situational ethics? The same holds true for PokerStars. Five years ago, New Jersey regulators would never have considered licensing PokerStars. Three years ago, they never would have considered licensing Pok- erStars. Not with PokerStars accepting players from New Jersey – something regulators would have used as an immediate disqualification. Nothing has changed about PokerStars – except for the fact they had to settle a major lawsuit with the Department of Justice for $547 million with an additional $184 million going to Full Tilt (whom they acquired) players outside the U.S. But what has changed is Atlantic City. Atlantic City casinos – and New Jersey by extension – are hemorrhaging revenue. Increased com- petition from casinos in Maryland, Delaware, Pennsylvania, New York and Connecticut has Atlantic City on the ropes. Last year, Pennsylvania surpassed New Jersey as the second-largest commercial casinomarket in the U.S. Pennsylvania casinos took in $3.16 billion while New Jersey casinos brought in $3.05 billion, a 40 percent drop from the state’s 2006 revenue total of more than $5 billion. Revel, the new $2.6 billion casino that was sup- posed to save Atlantic City, declared bankrupt- cy in March. Atlantic City is hurting. So does PokerStars’ past no longer matter to regulators? Situational eth- ics. I’m not sure how comfortable I amwith that. And that leads to the cheaters-never-prosper issue. The reason PokerStars is able to purchase the Atlantic Club is that they continued to take American bets after the passage of the UIGEA – which made the processing of payments for unlawful online gambling an illegal act. Publicly traded online gaming companies, like Party Poker, pulled out of the U.S. market af- ter the passage of the UIGEA and lost billions of dollars. Casinos in the U.S. that wanted to get into the online gaming industry didn’t, for fear of put- ting their land-based licenses at risk. PokerStars reaped the benefits of not having to play by the rules. Savvy business or cheating? That depends on whom you ask. Themost charitable way to look at it is PokerStars made a calculated gamble – build an online poker empire by taking bets other companies couldn’t, and then buy their way out of trouble and back into the market when it became regulated. The least generous reading is PokerStars didn’t play by the rules. They operated in a seriously gray market and broke some rules/laws to pro- cess payments. Should they be rewarded for doing so? Shouldn’t they be subject to the same strict standards that others licensed in New Jersey have had to face? Situational ethics. Cheaters never prosper. As much as I like PokerStars trying to thwart the system, I have a hard time arguing they should be licensed. It just doesn’t seem fair. AARON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vin, First of all, let me defend myself from your ho- lier-than-thou proclamations. When the casino offers a game that is tilted against me, I’ll take every edge I can get. Yes, if a dealer doubles my blackjack payout, I will turn a blind eye to the mistake. However, if a dealer gives me more than my fair share at a poker table, I will always point out the error. The difference between the two situations is that the person who would be hurt at the pok- er table would not be offering me a raw deal. There is also the question of scale. If I get an extra $10 from a casino where I produce several hundred dollars in revenue, does it hurt the ca- sino? Not really. If I am awarded a $20 poker pot that another player should have rightfully won, does it have a meaningful impact on that player? Maybe. 45 We have a “situation” here