GPWA Times Magazine - Issue 24 - April 2013

Yes, playing a casino game is a choice that I don’t have to make. But the house stacks the deck against you and makes a mint as a result. The grocery store doesn’t stack the odds against you, thus the “situational ethics.” You correctly state that online gambling regu- lations are being written to protect land-based gambling interests. You also incorrectly state that legislators don’t like to choose winners and losers. Legislators like to say that they don’t choose win- ners and losers, but they do so in almost every industry. The energy industry is full of laws that create winners and losers. Tax loopholes for oil companies; government loans for green energy companies; government approval of electrical company consolidation. Look at the food indus- try, the auto industry, the financial industry and nearly any other industry that turns a profit and you’ll find that government officials have found a way to give preference to their friends. So it is not surprising that the geniuses who are writing the rules for online gambling – one of the most lucrative new industries of the last decade – are looking out for their friends and not the players. The reality is that PokerStars paid a fine and ad- mitted no wrongdoing in exchange for dropping the charges. If we really live in a society where you are innocent until proven guilty, and neither Pok- erStars nor its executives were ever proven guilty of doing anything illegal, I don’t see why they should be barred from entering the U.S. market. If PokerStars was one of several potential buy- ers, I could see passing on them in favor of a company with a squeaky clean image. But the reality is, among online gaming corporations, PokerStars is just about as squeaky clean as you’re going to get. Playtech founder Teddy Sagi spent 18 months in an Israeli prison in the 1990s for fraud and bribery. PartyGaming founder Ruth Parasol got the capital to start Party Poker through a phone sex company. Yes, PokerStars took money from Americans and allowed them to play real-money poker games on the Internet. There’s still plenty of le- gal debate whether anything they did other than miscoding transactions (which was clearly bank fraud) was actually illegal. And what did they do once Black Friday came down? They paid every- one in full, including Americans, and would have even paid Americans their Full Tilt Poker bal- ances, had the Department of Justice allowed it. With no other buyers on the market, it’s worth looking at what PokerStars offers Atlantic City. As one of the smallest casinos on the Board- walk, PokerStars would almost certainly turn the entire 75,000 square feet of gaming space in the Atlantic Club (and possibly the 72,000 square feet of convention space) into a poker room that would draw players up and down the East Coast. If getting more people to come to Atlantic City is the goal of Gov. Christie and New Jersey regulators, a PokerStars-themed poker room is the best way to do it. Getting a leader in the industry to launch online operations in the state would also be a boon to the state’s credentials as America’s leader in the online gambling industry. All in all, a Poker- Stars presence in Atlantic City and New Jersey solves a number of problems while introducing a scant few. I guess that answers your “should” question. I’m not going to hazard a guess at the “will” question because I’m not a mind reader. But if they want to put the best interests of Atlantic City at the forefront, they know what to do. VIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aaron, I figured you’d roll out the whole odds are against me trope. It’s OK to steal from the man. But it’s not OK to steal from your fellow man. What’s next, insurance fraud? Seriously though. You just illustrated the prob- lem with situational ethics – a sliding scale of standards that makes it difficult to determine what the rules of the game are. There’s a clear case to be made that PokerStars did violate the laws of New Jersey. The state con- stitution dictates that all gambling in New Jersey (besides horse racing and the lottery) must take place in Atlantic City. That was one of the key obstacles that needed to be overcome to allow online gaming in the state. In the end, New Jer- sey determined that as long as the servers were in Atlantic City, online gaming would be legal. PokerStars certainly wasn’t operating servers in Atlantic City. So why should New Jersey regula- tors approve PokerStars when they were most likely in clear violation of state law for years? The reality is that passing probity in most Amer- ican states is significantly more difficult than in European jurisdictions. When William Hill ran into questions about their Australian operations in front of Nevada regulators, they shut them down. They bought back into the regulated Australian market by acquiring Sportingbet. But they didn’t want regulatory troubles for the original operation which might not have been in full compliance with Australian law. And I’m sure there were many reasons for why WilliamHill bought out Playtech’s stake in Wil- liam Hill Online. But I’m guessing that having to answer questions from regulators about Ted- dy Sagi at least made the list. 46 We have a “situation” here