PokerStars Approval Best Thing For NJ According To State Senator Raymond Lesniak

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Thursday, July 10th, 2014 | Written by Lucy Brown

State Senator Raymond Lesniak, the Legislature’s prime supporter of online gambling, has now thrown his weight behind PokerStars inclusion in the New Jersey igaming market. Although the American Democratic Party politician clarified that the decision ultimately lay in the hands of regulators, Lesniak did state his opinion that:

“I think PokerStars gaining approval would be the best thing to happen to the New Jersey Internet gaming industry, the biggest possible boost, because PokerStars has shown to be the biggest and the best online poker site.”

PokerStars not excluded from NJ online gaming

At the end of 2013, PokerStars parent company Rational Group found itself locked out of New Jersey’s nascent online gambling industry after the New Jersey Division of Gaming Enforcement (DGE) cited the “unresolved federal indictment” against PokerStars founder Scheinberg. Despite Isai Scheinberg stepping down from any involvement with the Rational Group in 2012, he still has a federal indictment outstanding against him connected to alleged violation of federal gambling statutes following enactment of the UIGEA.

After announcing its license application would be suspended for a period of two years, the DGE then qualified its statement by saying that “the Division, within that period, may consider a request for relief to reactivate the application if significantly changed circumstances are demonstrated.”

Amaya Gaming purchase a game changer

Those changed circumstances have now become a reality after Canada’s Amaya Gaming Group Inc. (AYA) announced its acquisition last month of PokerStars for $4.9 billion. The deal is expected to be completed by the end of September, and also includes Mark Scheinberg, Isai’s son, leaving Rational when the deal is finalized. This could then help PokerStars shake of its “bad actor” label and make a triumphant return to the US, further assisted by the fact Amaya already has approval to provide an igaming platform for Caesars Interactive in the New Jersey market.

Commenting on the new situation, State Senator Raymond Lesniak, said: “This sale is an opportunity to have the license reviewed and possibly approved. I would hope it’s only a matter of months away from that decision being made.”

New Jersey the next Detroit?

Just like the city of Detroit, which has suffered a major economic and demographic decline since its auto industry started to wane in the 1950s, the same fears now apply to New Jersey and its gambling resort of Atlantic City.

At one stage the popular east coast tourist resort was the second biggest gambling hub in the US, but over the years, like Detroit, AC has been losing its biggest industry to major competition. Since 2006, for instance, New Jersey has seen its gambling revenues almost halve from $5.21 billion to $2.86 billion in 2013, while this year three of AC’s 12 casinos, namely the Atlantic Club, the Showboat, and Revel, have either already shut shop or are about to go out of business.

With this back drop in mind, The Garden State is now frantically exploring all possibilities to help spare it from the same fate as Detroit, which was forced to file for bankruptcy on July 18, 2013.

Is online poker the solution?

Ahead of regulation, New Jersey Governor Christie estimated the state could generate around $1.1 billion in igaming revenues resulting in around $200 million annual taxes for the state. After more than six months of a licensed online gambling industry, however, the actual figures have proven to be closer to a tenth of initial forecasts.

Amongst the many reasons cited for the disappointing results has been the relatively unattractive websites offered by NJ’s three operators Borgata/partypoker, WSOP/888 and Ultimate Poker, combined with their less than impressive education and marketing efforts. As a result, State Senator Raymond Lesniak now seems to be pinning his hopes on PokerStars being able to somehow re-invigorate an interest in online gambling and reclaim some of NJ’s past glory. Doubts still remain, however, whether online poker could ever generate the level of excitment achieved during its boom years.

Other options on the card

In addition to PokerStars possibly being granted a NJ gaming license, the state has also been exploring a plethora of other options in a concerted attempt to reverse the state’s dramatic decline in gambling revenues. Such measures include the NJ legislature recently approving a Sports Betting Bill, albeit in possible opposition to the federal ‘Professional and Amateur Sports Protection Act‘ (PASPA). As Assemblyman Al Caputo, recently explained:

“We are in desperate need of innovative ideas to combat the continues downturn in New Jersey’s gaming industry in both Atlantic City and at our racetracks. This is an opportunity to kick-start this industry in a way that is unprecedented along the East Coast and generate substantial revenue for our state as a whole.”

New Jersey is also toying with the idea of constructing a $4.6 billion casino in Jersey City, a move which would require the state to allow casinos to be built outside of Atlantic City. The project’s biggest investor would be Reebok founder Paul Fireman, with NJ State Senator Raymond Lesniak, commenting:

“This Paul Fireman guy is the real deal. This is a solid proposal and he’s willing to put the money up for it. This will compete with Macau and exceed it. What Macau doesn’t have is the metropolitan area and the New York skyline.”