Last Thursday, it was announced that PokerStars and Wynn Resorts would form a strategic alliance. The companies plan to jointly operate a regulated, U.S. online poker site, PokerStarsWynn.com, should such legislation pass.
More than half of PokerStars multi-billion dollar a year empire is U.S. customer facing. The fact that PokerStars is one of the few poker sites to continue to accept customers from the United States after the passage of the 2006 UIEGA (Unlawful Internet Gambling Enforcement Act) may impair their ability of securing an online gaming license under conventional methods so this partnership with the powerful Vegas land based casino group may present a Wynndow of opportunity for PokerStars to gain a license into the United States and present a Wynn Wynn situation for both companies, pardon the pun. However, one question remains is whether the Federal Government will forgive and forget.
PokerStars is a privately held company which is owned by the Scheinberg family of Israel, recent reports estimate that PokerStars nets over half a billion dollars in profit annually and this is more than most land based casinos make with a fraction of the overhead investment.
Up until recently, Steve Wynn was very vocal about being against online poker and worked hard to stop efforts to legalize and regulate internet poker in the U.S. With a 2nd Vegas resort The Wynn Encore costing him over $2.7 Billion dollars upon completion during a period of economic recession, it is only normal he would not be too happy with online gaming operators who invest a fraction what he did hurting his investment.
“We are convinced that the lack of regulation of Internet gaming within the US must change,” Steve Wynn, CEO of Wynn Resorts, said in a statement. “We must recognize that this activity is occurring and that law enforcement does not have the tools to stop it…. It is time that the thousands of jobs created by this business and the potentially significant tax dollars come home to the U.S.”
Other online poker sites on the Federal government’s watch list for accepting players from the United States post 2006 are 2nd largest online poker site Full Tilt Poker. Full Tilt Poker are rumoured to be making similar strategic power plays with land based casino group Station Casinos in an effort to gain a legitimate licensing opportunity into the US.
The unanswered question is whether the federal government and states will grant general amnesty, as France did, or limit it to companies that stopped taking bets from the US, or do like New Jersey, and bar anyone ever involved in even gray market gambling.
Nevada regulators just approved the Caesars/888 partnership, the first time an Internet gaming company which took online bets from the US was found suitable. This is good news for the other companies which left the US following UIGEA.
Wynn believes there will be general amnesty and if he is right, others with growing brand recognition could also be licensed like Full Tilt, Absolute Poker, UB.com and Cake Poker.
Nevada lawmakers spoke with a casino industry lobbyist who said the one thing that stops them from approving any online poker site Internet poker site is that it is illegal to gamble online in the United States. However, federal prosecutors have yet to charge and prosecute a gambler who made a wager online.
The Nevada Judiciary Committee heard testimony from the Assembly Bill 258 supporters. The bill would permit the Nevada Gaming Commission to adopt rules about Internet poker.
We must now wait and see what is next but definitely there is a lot more discussion taking place now and it appears that with the land based casinos taking a more active role in the regulation process, we may start to see things materialize.
