Will $5B buyout bring PokerStars to Jersey?

Amaya Gaming Group's headquarters in Montreal. Amaya has agreed to buy the owner and operator of the PokerStars and Full-Tilt Poker brands in a $4.9 billion deal.
Amaya Gaming Group's headquarters in Montreal. Amaya has agreed to buy the owner and operator of the PokerStars and Full-Tilt Poker brands in a $4.9 billion deal. (AP)
Posted: June 15, 2014

The Rational Group, which owns the world's largest online poker site and tried to buy the now-closed Atlantic Club in Atlantic City last year to get a foothold in New Jersey's legal online gambling market, has agreed to a $4.9 billion buyout by Amaya Gaming Group Inc.

A history of U.S. legal troubles has blocked the Rational Group, which is based on the Isle of Man, from launching its brands, PokerStars and Full-Tilt Poker, in Nevada, Delaware, and New Jersey, where online gambling has been legalized.

Montreal-based Amaya, by contrast, is licensed in New Jersey to provide services to online casinos. The deal was announced late Thursday.

"We believe our track record of working in licensed jurisdictions in the United States and recognition of our suitability by numerous regulators will help facilitate the licensing of Rational's brands as i-gaming operators," David Baazov, Amaya's chairman and chief executive, said Friday during a conference call with analysts.

"Rational already has a relationship established with a land-based casino in the state, Resorts, and would be able to be operating it in a short time if and when it receives a transactional waiver," he said.

The New Jersey Division of Gaming Enforcement in December suspended for two years its review of Rational's application for a license to operate online in a partnership with Resorts.

The suspension was based primarily on Rational's continued association with its founder, Isai Scheinberg, who was indicted in 2011 for violating the Unlawful Internet Gambling Enforcement Act and the Illegal Gambling Business Act, the gambling regulators said.

Scheinberg has not been arrested and remains out of the country.

"We will review all aspects of this acquisition to ensure compliance with our high regulatory standards," David Rebuck, director of gaming enforcement in New Jersey, said in a statement.

"We are also encouraged by this development and the expanded opportunities it might provide for New Jersey's Internet gaming industry," he said.

Some industry experts have said that the absence of the world's biggest online poker brand, PokerStars, is a factor in the disappointing start to online gambling in New Jersey, which in the first six months has only brought in $61 million in revenue.

State officials had initially expected more than $1 billion in annual online gambling revenue.

PokerStars and Full Tilt Poker account for two-thirds of the global market, excluding the United States, according to a company presentation Friday.


hbrubaker@phillynews.com

215-854-4651

@InqBrubaker

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