New Jersey Releases Findings From Amaya/PokerStars Investigation

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Wednesday, October 28th, 2015 | Written by Stephen Smith

Although the results of the New Jersey Department of Gaming Enforcement’s (DGE) investigation into Amaya were already known, the state has taken steps to ensure transparency by releasing the findings of their investigation to the public. The department’s complete 89-page report can be viewed online, and explains how the state decided to allow Amaya to provide online poker and online gambling in New Jersey. After the Canadian company was cleared to operate on September 30th, Amaya CEO David Baazov haled the approval as “a significant milestone for the group and something we should all be very proud of.”

Background of DGE Enforcement Report

When Amaya first expressed interest in operating online gambling and online poker in New Jersey under PokerStars, many people familiar with the company wondered if they would be able to gain approval from the DGE. The reputation of PokerStars had been tarnished because the company had been operating illegally in the United States for some time before the day known as Black Friday, when the U.S. Department of Justice blocked access to PokerStars and other offshore online poker sites.

Although Amaya did not own PokerStars at the time, many speculated that the site would never be allowed to operate in the U.S. again due to its actions between 2006 and 2011. Ultimately, the New Jersey Department of Gaming Enforcement ruled to allow PokerStars to become a provider of iGaming in New Jersey, citing the fact that Amaya is now operating the site rather than its previous owners as one of the key reasons for the move.

Key Takeaways From DGE Report

In addition to summarizing the events that led up to Black Friday and explaining how Amaya is now running PokerStars, the New Jersey Department of Gaming Enforcement revealed some other interesting details, including:

– Reference to a Canadian Investigation. Currently, Amaya is being investigated in Quebec for potential inappropriate stock trading activity. The report mentions that there have so far been no findings against Amaya as a result of the Canadian province’s investigation and that it seems unlikely that any findings will be forthcoming in the future.

– Amaya Was Required to Fire Employees to Obtain Approval. The New Jersey Department of Gaming Enforcement carefully evaluated all of the employees who worked in key leadership roles at Amaya, including the ones who were part of PokerStars management from 2006 to 2011. The report identified four individuals that the department felt lacked good moral character and stated that their employment must be terminated for Amaya to receive approval to operate PokerStars in the state.

– A Lot of References Were Reviewed for the Investigation. The New Jersey Department of Gaming Enforcement report states that they reviewed more than 45,000 pages of documentation related to PokerStatrs and Amaya before completing the report. There were also 71 sworn interviews used to gain information for the investigation.

– PokerStars Attempted to Repay New Jersey Customers. After Black Friday, PokerStars refunded $5 million to players in New Jersey. Some of the money is still unclaimed, but the state found that PokerStars had made every effort to return it.

PokerStars NJ Launch in 2016

With the the DGE investigation results released, and Amaya Gaming granted a NJ iGaming license, the Garden State is now hoping the world’s biggest poker site, PokerStars, will help lift its flagging iPoker market. Reflecting a wider industry trend, the state’s online casino industry continues to grow and produce healthy returns, while online poker has steadily been shrinking, and last month generated its lowest revenues to date of $1,771,123, lower by 15% compared to September 2014. However, Amaya is unlikely to launch its New Jersey sites before next year, and speculating on the issue Global Poker League CEO Alex Dreyfus tweeted:

“I believe Amaya/Pokerstars will launch in Q1 2016, no need to add cost on Y15. Need a strong strategy to develop a market without killing it.”

Amaya’s iGaming license approval is not only good news for New Jersey, but in time could prove beneficial for the whole country’s disparate online gaming industry. Currently just New Jersey, Nevada, and Delaware offer such products, with other states sitting on the fence hoping to see better monthly revenues from these states before joining the bandwagon. That could now be be more realistic, as PokerStars has the best software and marketing capabilities in the whole iPoker industry. In fact, Eilers Research says it now expects Amaya Gaming’s launch in the US to “precipitate a material reshuffling of the landscape for regulated online gambling in both the U.S. and abroad.”