GPWA Times Magazine - Issue 25 - June 2013

By J Todd, Host, APCW Perspectives Weekly I t seems like only yesterday when ev- eryone in the iGaming industry was praising PokerStars and its manage- ment for having the cash on hand to pay all their players in the wake of the Black Friday indictments. But just two issues ago, PokerStars’ parent company, The Rational Group, made our Wall of Shame for choosing not to honor affiliate contracts when it took over Full Tilt Poker operations. Now, just a few months later, its founder, Isai Scheinberg makes our list for one of the most boneheaded moves I’ve ever seen. You see, Scheinberg is still in a bit of le- gal hot water with the U.S. Department of Justice (DOJ). Sure, the DOJ set- tled its case against PokerStars as a business, but Scheinberg’s case is still open. And as part of the PokerStars’ settlement, Scheinberg agreed that he would step down and not have any management role. But it turns out Scheinberg had his hands all over the company’s attempt- ed buyout of the Atlantic Club Casino in New Jersey. You see, in order to run online games in the Garden State, you’ve got to own a brick-and-mortar casino. PokerStars wanted in, and the Atlantic Club was the cheapest and easiest way to get a toehold back in the American market. That’s all fine and good, but apparently Scheinberg played a big role in the ne- gotiations, and that was a big no-no. The deal turned sour when the Atlantic Club discov- ered they might be able to find a sweeter arrange- ment elsewhere and real- ized that PokerStars might have some difficulty get- ting a gaming license with charges like bank fraud and money laundering in their not-too-distant past. When the Atlantic Club backed out of negotiations, PokerStars got a restrain- ing order against the ca- sino to prevent them from selling to anyone else. A judge overturned that restraining order, per- haps in part because the Atlantic Club revealed that Scheinberg was involved in the negotiations. In the meantime, PokerStars has al- ready given the Atlantic City casino $11 million of a planned $15 million purchase price. And the Atlantic Club is asking for a $4 million ter- mination fee. Plus they get to put the property back on the market and see if the value has increased with the onset of online gambling regulations in the state. Normally we put people on the Wall of Shame for getting away with some- thing. But this time, Isai Scheinberg earns his spot because his arrogance cost his company at least $11 million, and he may have cost PokerStars not only a spot in the New Jersey online gambling market, but a spot in ANY U.S. online gambling market. Congratulations, Isai! Now you AND your “former” company are members of the APCWWall of Shame. W all of S hame APCW Wall of Shame