PokerStars and California Online Poker: Timeline

Posted on May 7, 2014

As the state is leaning closer to regulation of online poker, the conclusion of this seemingly endless war is nearly here – relatively speaking.

It’s been years in the making and after last month’s events, let’s take a look at what got us here.

September 11, 2001: PokerStars debuts their play-money online poker room

One of the most infamous days in world history was also the day PokerStars’ play-money site came online and dealt its first hand. Despite the poor timing of their launch, PokerStars would go on to rule the online poker world in less than five years.

December 12, 2001: PokerStars launches for real-money

A month after their play-money site was launched PokerStars unveiled their full software platform and started offering real-money online poker games. With their software, promotions, and later their innovative live poker tie-ins the site quickly gained a foothold in the market, and some luck, good business practices, and a willingness to make difficult decisions would bring them from competitive to industry leader.

May 23, 2003: Stars qualifier Chris Moneymaker wins the 2003 World Series of Poker

By 2003 online poker was already starting to blossom, but when a PokerStars online qualifier by the name of Chris Moneymaker won the 2003 WSOP Main Event in improbable and dramatic fashion the industry and PokerStars were about to explode.

Summer of 2005: PokerStars moves their headquarters from Costa Rica to the Isle of Man

Few people realize that PokerStars began its life in Costa Rica before moving to the very tax-friendly Isle of Man in 2005 – Britain dropped the tax rate to 0% for its small territory which attracted several gaming companies. The company is now the largest employer in the tiny nation.

The move was seen as a precursor to an IPO offering; an offering that never materialized because of UIGEA legislation the following year.

Winter of 2006: PokerStars continues to operate in US after UIGEA; becomes largest online poker site

UIGEA didn’t officially become law until late 2006 (it would then take many more years to actually be fully implemented) but the specter of the bill had the online poker world on high alert well before its passage – nixing several potential IPO’s including PokerStars and Absolute Poker.

While companies like Cryptologic, 888, and Party Poker formulated their US exit strategies, PokerStars and a handful of other sites (privately owned companies) decided that they were within their rights to continue operating in California and the rest of the US, and with a stranglehold on the world’s largest market PokerStars went from one of the top online poker providers to the largest online poker site in the world.

April 15, 2011: PokerStars targeted by DOJ, company exits the US market

After a five year run atop the online poker world the Department of Justice decided to use UIGEA and several other laws to shutdown the US online poker industry. The DOJ’s action caused PokerStars to agree to leave the US market after their domain was seized along with bank accounts and company founder Isai Scheinberg was indicted.

Despite the loss of its largest market PokerStars would go on to further cement its place in the online poker industry thanks to their quick and decisive actions in the immediate aftermath of Black Friday. Namely paying all of its US players within weeks.

July 31, 2012: PokerStars reaches a settlement with US DOJ purchasing Full Tilt Poker in the process

When PokerStars settled with the DOJ and in the process took over control of one-time rival Full Tilt Poker they did so by guaranteeing former FTP players would be repaid, and with the express permission of the US government that they would not be barred from operating in the US in areas where online gambling was legal or would become legal.

This settlement agreement is the impetus for the company’s current attempts to reenter the US market via California.

February 24, 2014: California Senate and Assembly introduce competing online poker bills

2014 is seen as California’s best chance to get an online poker bill passed (online poker expansion talks began in 2009) as the tribal and gaming interests are for the most part now on the same page. With these new consensuses formed it came as little surprise when the California Assembly and the State Senate both introduced competing online poker bills.

Assembly Bill 2291 and Senate Bill 1366 both legalize intrastate online poker in the state, and while they are generally in agreement on most issues there are a couple important distinctions between the two:

  • SB 1366 allows for unlimited domains per operator
  • SB 1366 permanently bans any operator who offered online poker in the US after December 31, 2006 while AB 2291 is nonspecific when it comes to the length of the ban for bad actors.

March 14, 2014: iGaming Player reports PokerStars is in partnership talks with Morongo Band of Mission Indians

The first hints of PokerStars looking into the potential California market came in mid-March when iGaming Player (a trusted source in the industry) tweeted out that PokerStars was in preliminary talks with the Morongo Band of Mission Indians to be their official online poker provider.

March 15, 2014: Gambling Compliance corroborates and adds to iGaming Player rumor, adding The Bicycle Casino, The Commerce Casino and Hawaiian Garden to partnership

The following day the list of potential partners for PokerStars grew considerably, and the rumor was now basically considered fact, when Gambling Compliance (another very trusted source) wrote an article saying the potential deal included not only the Morongos but also three prominent California card-rooms, The Bicycle Casino, the Commerce Casino, and Hawaiian Gardens.

March 21, 2014: CTBA Chairperson Leslie Lohse issues a statement supporting bad actor clause in California’s online poker bill

With rumors heating up and PokerStars appearing to be making a serious push to get the bad actor language removed from the bills, the other gaming interests in the state started to speak up, chief among them Leslie Lohse, the Chair of the CTBA (California Tribal Business Alliance) who penned a letter to lawmakers rejecting PokerStars involvement in the industry.

March 26, 2014: Coalition of 12 tribes issued their own statement opposing PokerStars

In addition to Lohse, a coalition of 12 tribes also spoke up against PokerStars and the potential removal of bad actor language from the bill just days later.

March 28, 2014: PokerStars calls criticisms by tribes “misrepresentations” in a statement from Eric Hollreiser, PokerStars Head of Corporate Communications

PokerStars responded swiftly to the accusations being made, with Head of Corporate Communications Eric Hollreiser releasing a statement on behalf of the company calling the accusations “misrepresentations” of not only PokerStars history but of the law.

You can find an in-depth breakdown of PokerStars arguments against these accusations here: PokerStars Past Under Siege in California; UIGEA Key Issue

April 2, 2014: Leslie Lohse makes follow-up statement, doubling down on opposition to PokerStars

Leslie Lohse went right back to the keyboard to offer up a rebuttal to PokerStars statement, and getting the last word in on the topic until the California online poker hearing at the end of April.

April 23, 2014: California holds informal online poker hearing where PokerStars (despite not being mentioned by name) is hot topic of conversation

The hearing was progressing with a very genial tone until the tribal panel was called, at which point the conversation turned almost entirely to PokerStars (just not by name) and bad actors.

Here is our rundown of the hearing and the important takeaways from the hearing: 24 Things We Learned at the California Online Poker Hearing and Hearing Wrapup: PokerStars and Their CA Partners Have Drawn Their Line in the Sand

April 23, 2014: PokerStars officially announces partnership with Morongo Band of Mission Indians, The Bicycle Casino, The Commerce Casino, and Hawaiian Gardens

During the hearing one of the biggest pieces of iGaming news was broken when PokerStars, the Morongo Band of Mission Indians and the Bicycle Casino, Commerce Casino and Hawaiian Gardens formalized their partnership during the middle of the tribal panel’s testimony.

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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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