GPWA Times Magazine - Issue 24 - April 2013

Squeaky clean is what gets you licensed in the U.S. American gaming regulators – and operators look- ing for partners – are getting used to the concept that they can’t expect the online gaming provid- ers from Europe to be as squeaky clean as they’d like. But they’re still looking for relatively clean. That’s where companies like bwin.party (what’s your problem with phone sex?) and 888 come in. They stopped taking American bets after the UIGEA passed. PKR never took American bets. Those seem to be clean lines of demarcation in terms of being clean enough. That brings us to PokerStars. PokerStars de- serves credit for paying its players back right away. And it deserves credit for buying Full Tilt and paying their players back (outside of the U.S.) right away. But they shouldn’t be elevated to online gaming sainthood, which is what the online poker community has done. They’ve acted and behaved like a responsible company. They kept their players’ deposits safe. Their software didn’t have security holes that allowed cheating. And they paid their play- ers. That’s the minimum we should expect out of any gaming company. And there are plenty of other companies that do that and continue to do so. But we’ve placed them in an exalted position because they’re not Absolute/UB.com and they’re not Full Tilt. I don’t think they played by the rules in New Jersey. And that’s a problem for me when it comes to licensing. As for Atlantic City, both you and I (along with the rest of the world) agree it’s in trouble. One solution to helping it is to let PokerStars buy the Atlantic Club and resuscitate it. Atlantic Club COO Michael Frawley told New Jersey Today he anticipates PokerStars will make a capital investment of $40 million on the prop- erty over the course of five years, including a $20 million capital investment in the first year. That’s a lot of money to put into renovating and refurbishing a casino. And yes, PokerStars would do a lot of good by bringing in more poker players to Atlantic City. Does that mean they should be licensed? That depends on how you view ethics. Situ- ational or absolute? There’s another argument to be made regard- ing the Atlantic Club. Maybe it needs to be shut down. Let it fail. Get rid of the hotel inventory. Build something else in its place – something that will attract more than poker players to At- lantic City. The Atlantic Club sits on prime real estate. Let it fail and let the market decide what should go in its place. Atlantic City needs to turn itself into a destination city. Maybe some visionary will come in and build a mixed-use facility, with condos, hotels, retail and gaming. Maybe it’s something we’ve never thought of. But Atlantic City can’t go down that path unless it’s willing to let the Atlantic Club fail. As for whether regulators will license Pok- erStars, that’s tough to say. My gut says no – but it will be a close call. Regulators are not tasked with the “should” question. That’s a public policy question for legislators. The only question before regulators is the suitability of PokerStars. And that’s where PokerStars tak- ing bets from New Jersey comes into play. If PokerStars had stopped taking bets from New Jersey when the constitutional issue was raised a couple of years ago, I think they get in. But because they continued to take bets, I think the regulators will ultimately reject them. That’s hardly a lock though. Regulators are human beings too. They know Atlantic City is struggling. They know that if they don’t ap- prove PokerStars, hundreds of people could lose their jobs at the Atlantic Club. And they know Christie has made saving Atlantic City a priority. So they might bend and approve Pok- erStars. But I have a hard time seeing it. Have I presented enough information to get you off the fence on the will question? Come on. You’re a betting man. Take a stand! AARON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vin, Debating the merits of situational ethics is all fine and good for a first-year college course (“Is it OK to steal a loaf of bread to feed your starv- ing family?”), but the fact of the matter is this: Life is situational ethics. As much as we’d like to think we make deci- sions in a vacuum, the circumstances sur- rounding each decision we make color our realities. You yourself have said that if you found $100 on the street in New York City, you’d pocket the money. If you found it in our office parking lot, you’d try to find the rightful owner. Change that $100 bill to a $5 note, and you’d pocket the money. Different situations call for different responses. This is what life is all about. Here are the facts in the PokerStars case: • PokerStars has never been convicted of a crime, nor has its team of executives • PokerStars is recognized as the global online poker industry leader • PokerStars has never been accused of acting unethically or in any way that would endan- ger players or their funds • PokerStars has a positive relationship with every nation that has regulated the online gambling industry • PokerStars is offering New Jersey a solution to a major problem by offering to purchase the Atlantic Club • PokerStars is committing to investing mil- lions of dollars in Atlantic City For these reasons, I think it’s a no-brainer. There is nothing about the company right now that precludes it from operating in New Jersey. They have more expertise in online poker than any other potential operator in the state. Honestly, I don’t think the American Gaming Association did itself any favors by sending regulators a brief outlining all the reasons it felt that PokerStars should not be granted a license to operate the Atlantic Club. The brief led to PokerStars’ allegation that Caesars offered to sell the Rio All-Suite Hotel & Casino in Las Ve- gas to the online poker site and that they would do their best to grease the wheels with Nevada regulators. If this type of behavior is typical of land-based corporations like Caesars (which owns plenty of properties in Atlantic City), are we really supposed to take their air of superior- ity over PokerStars seriously? Does PokerStars have some skeletons in the closet? Sure. But who doesn’t? Give ‘em a license, let them run the casino and bring a few hundred more people to Atlantic City every weekend who may not have other- wise gone, and help provide a lift to the nation’s hardest-hit gambling market. And because you’re backing me into a corner, I’ll go all in. Not only should New Jersey regulators give PokerStars a license to operate the Atlantic Club (and by extension, online poker games in the Garden State), I believe that they will. VIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aaron, You’re an effective advocate for PokerStars. And I agree with many of the points you make about PokerStars being good for the Atlantic Club and Atlantic City. Heck, I even helped you make a few of those points. But you’re missing the crux of the argument against them. This isn’t about whether PokerStars was ever unethical in their dealings with players. And yes, they’ve never been convicted of a crime. But the settlement of the DOJ case matters here. New Jersey regulators, as a matter of due dili- gence, will have to look at the evidence gath- ered by the DOJ. And even though PokerStars didn’t have to defend themselves in court, 47 We have a “situation” here