Will PokerStars Partnerships in California Be Affected By Sale to Amaya?

Written By Steve Ruddock on June 17, 2014 - Last Updated on September 13, 2022
Chances PokerStars will enter California online poker

Thursday’s momentous news that PokerStars, Full Tilt Poker and the rest of the company’s assets under the Oldford Group umbrella corporation will be sold to Amaya Gaming for the princely sum of $4.9 billion has done the unthinkable; appropriating the day’s headlines from the World Series of Poker as the day’s biggest story.

Part of the buzz is that the deal has raised as many new questions as it has answered.

Consider that the average poker player is probably hearing the name Amaya Gaming for the very first time and you can see how these fears and concerns have come into being.

For these people the sale is causing confusion especially in California, where PokerStars had entered into an agreement with several gaming interest should an online poker bill pass in the state.

This has left Californians asking if the deal is still on between PokerStars and its California partners, and if the sale helps or hurts online poker’s chances in the state.

On the other hand, for most industry types, the sale has created optimism, epitomized by attorney Vincent Oliver’s tweet on Friday:

So let’s see if we can make some sense of this particular aspect of the PokerStars / Amaya deal and help the average Joe understand what it means for California online poker and the current agreement between PokerStars, the Morongo Band of Mission Indians and The Bicycle Casino, the Commerce Casino, and Hawaiian Gardens.

Bad Actor Clause Still Needs To Go

The sale is supposed to help pave the way for PokerStars US return, but under the current bill being pushed PokerStars (under the Amaya umbrella) would still be considered a “bad actor.”

The “bad actor” language would need to be stripped out of the bill or softened to the point where it doesn’t exclude brands, software, and player lists for PokerStars to enter the market, even as a part of Amaya Gaming.

Thanks to the sale to Amaya, PokerStars’ tentacles are now reaching into several different pots and their list of allies may be growing – Amaya Gaming has contracts and partnership agreements with multiple casino properties across the country.

Additionally, several of the investors that have been brought on board to facilitate the sale also have gaming connections, including Macquarie Capital and Caesars Entertainment.

With multiple companies now needing to balance their online gaming interests with the interests of their gaming and investment partners we may see more sympathy for PokerStars. Additionally, under the same auspices, Amaya Gaming (one of the top distributors of land-based and online games) would now potentially fall into the “bad actor” category as well.

While this isn’t a big deal in the poker-only California market it could have repercussions elsewhere around the country (such as in Pennsylvania), as any entity calling for PokerStars to be banned must now also call for Amaya to be banned. Chances are they are planning on offering certain Amaya Games.

With this in mind I am very interested to see if some of PokerStars’ previous critics tone down their language moving forward, and perhaps concede on some level when it comes to the bad actor clause. It should also be noted that Morongo Chairman Robert Martin intimated to me that the bad actor clause is an aboslute nonstarter for them.

Principles Involved Seem Positive

Despite the uncertainty created by the sale among the general population, the key players in California are in seeming agreement that the Amaya deal is a positive for their not only the PokerStars’ partnerships, but as attorney Vincent Oliver stated in the tweet above, it helps California’s chances of passing an online poker bill.

In the joint press release issued by PokerStars and Amaya Gaming on Thursday evening, David Baazov, CEO of Amaya Gaming only hinted at the potential for the company to gain a foothold in the US, and didn’t speak specifically about either California or PokerStars current partnership with the Morongo Band of Mission Indians, the Bicycle Casino,etc.

“Rational does not currently operate in the United States, and we anticipate that Amaya’s track record in the United States has the potential to facilitate a speedier entry of the Rational’s brands into the US, an entrance that would certainly be welcomed by players.”

For clarity on this aspect of the deal I reached out to PokerStars and was told by Eric Hollreiser, the Head of Corporate Communications for PokerStars: “We believe the agreement with Amaya only strengthens our partnership in California.”

One of their partners in California was just as positive about the deal, as Robert Martin, Chairman of the Morongo Band of Mission Indians told me Friday afternoon, “This is a positive move… It shows what we’ve said all along, PokerStars is the best in the industry.”

Martin is presumably speaking to PokerStars’ realization that the road ahead in the US is likely going to be closed to them under their current leadership and saw fit to do the right thing for all involved by selling to Amaya.

Martin went on to say that as partners they speak with PokerStars on a daily basis, but have not yet had any contact with Amaya Gaming, nor are they expecting to until the deal is signed, sealed, and delivered, which is slated to occur sometime around September 30, 2014.

Even with the bad actor hurdles still in place, what the deal does is create some separation between PokerStars 2014 and PokerStars pre-Black Friday, the “bad actor” version of the company under some people’s definitions.

The deal will also see several key players at PokerStars ride off into the sunset, most notably co-founder Isai Scheinberg, whose continued role with the company despite being under criminal indictment in New York has provided PokerStars opponents with easy fodder as they cajole lawmakers for “bad actor” clauses.

With a new brand, and the cupboards completely cleaned out of controversial executives, PokerStars / Amaya will no longer resemble the bad actor portrait that their opponents have painted.

Secondary Issue Voiced

Chairman Martin also stated that the Morongo Band of Mission Indians is in favor of including the smaller tribes in any online poker legislation by amending the current revenue sharing model or creating a new one for online poker.

California’s current revenue sharing deal calls for non-gaming tribes and tribes with small-scale gaming interests (less than 350 gaming devices/machines) to receive a $1.1 million stipend from the Indian Gaming Revenue Sharing trust Fund which comes from tribes operating over 350 gaming machines.

Chairman Martin stated that the current bill as written by the coalition of 13 tribes “does nothing for the small tribes.”

Chairman Martin’s remarks indicate the Morongo Band of Mission Indians would like to extend this revenue sharing arrangement into online poker.

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Steve Ruddock

Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

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