Analysis: PokerStars places one foot in the US door
Poker heavyweight's New Jersey debut is likely to lead to more deals and a renewed war of words
Much to the dismay of New Jersey’s online gaming hopefuls, PokerStars has bounced back from a series of blows to sign an agreement with Resorts Casino Hotel, providing its first serious chance of re-entry into the US market. But it’s re-entry raises as many questions as it provides answers and is far from the final chapter in a tale that has more twists than a Steven King novel.
Rather than licking its wounds over Monday’s failed appeal over its doomed US$15m acquisition of the Atlantic Club casino, PokerStars was busy forging a new relationship. The partnership, subject to regulatory approval, will see PokerStars and Resorts launch an online gaming partnership under the former’s brand.
eGaming Review also understands Resorts CEO Morris Bailey plans to use the deal to launch a PokerStars-branded poker room within the casino itself in order to help boost its struggling land-based revenues. The casino does not currently have a poker room and PokerStars has valuable experience of operating such venues in London, Spain and Macau.
Last year Resorts posted a $7.7m loss, albeit an uplift of more than 36% from the $12.2m loss in 2011. Its falling revenues, which mirror the fortunes of most of the city’s casinos, has already led to commercial agreements with other well-known gambling brands, including the Mohegan Sun which took over management of the casino and hotel in August last year.
The deal will be seen as a coup for Resorts as it looks to turn around its fortunes, but there should be no underestimating the ill will felt towards PokerStars by rival land-based operators in the state. We should expect a resumption of the war of words launched by the American Gaming Association and some hostile media coverage while the regulators weigh up the application from the Isle of Man-based operator.
Completion of the agreement relies on PokerStars obtaining a licence from the New Jersey regulator, the chances of which some have questioned due to PokerStars’ post-UIGEA activies. But given this is the second deal it has struck in New Jersey, and the extremely high level of priority US re-entry has been given internally, there appears to be a certain amount of confidence in gaining the regulator’s approval.
The timing of PokerStars CEO Mark Scheinberg agreement to forfeit $50m to the US Department of Justice in a “full and final” settlement of the company’s operations in the US after the UIGEA was introduced in 2006 last month could be telling. And you can certainly expect both PokerStars and the AGA throwing their considerable weight into behind the scenes lobbying efforts in the coming weeks.
Looking beyond the limited details provided on the deal, it appears a third party will need to be found before the state’s deadline of 29 July for its licensees to file their final egaming applications. New Jersey’s egaming regulation permits online versions of any game found within the state’s casinos, so the question of where Resorts will get the remaining product offering from remains.
PokerStars, despite rumours to the contrary, is not thought to be developing its own casino games, which potentially leaves room for a secondary deal either with PokerStars or directly with Resorts for a casino games supplier. Should PokerStars gain that all important licence in the coming week, for some it could be a case of if you can’t beat them, join them.