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PartyPoker Plays By Rules And Loses

As part of the deal between the DoJ, PokerStars and Full Tilt in which PokerStars has acquired the assets of Full Tilt Poker, the agreement allows PokerStars to offer poker in the U.S. marketplace when regulations are in place.

The agreement’s legal jargon specifically says, “PokerStars is prohibited from offering online poker in the U.S. for real money unless and until it is legal to do so under U.S. law.” This is a major part of the acquisition agreement that perhaps would not have come about without PokerStars given such permission by the U.S. government.

If you’ll remember correctly, PokerStars has not always been the big kid on the block. Prior to the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, PartyPoker had the distinction of being the numero uno poker site the world over. But PartyPoker chose to adhere to the UIGEA, pulling out of the U.S. marketplace and paying a penalty in the neighborhood of $105 million in return for avoiding prosecution.

This paved the way for PokerStars, Full Tilt and Absolute Poker to flout the law and continue offering online poker to U.S. players. It eventually enabled PokerStars to become the world’s leading poker site and their acquisition of Full Tilt will now give them even more control and dominance in the Internet poker industry. Meanwhile, PartyPoker, who played by the rules and ceded their top dog status, are now the third-ranked site in terms of player traffic according to PokerScout and may fall further behind once PokerStars relaunches Full Tilt in 90 days time.

Bwin.party, the parent company of PartyPoker, has been forming alliances with both U.S. casino companies and Indian tribes in preparation of entering the U.S. marketplace when and wherever possible. Since they voluntarily agreed to leave the U.S. in 2006, odds are that they will have no problem obtaining the proper licensing to operate in the U.S. in the future. But along comes PokerStars, who did not play by the rules half a dozen years ago. And due to their ability to grow and become a powerful poker room by ignoring the UIGEA, they have been able to make a deal which includes no provisions against being able to offer real money play in the U.S.

Granted, it may seemingly be a bit more difficult for PokerStars to obtain an operating license in the U.S. either on their own or through a partnership agreement. Gaming officials in Nevada–the only state that has granted licenses thus far–apparently will consider each applicant on a case-by-case basis. Of course, it will not look favorable that PokerStars continued to operate in the U.S. post-UIGEA. However, with the Silver State looking at a possible liquidity problem with its low population numbers, do you think gaming officials would actually forbid PokerStars from operating there? Not a chance. Their player pool in any scheme that would allow U.S. players to compete against players throughout the rest of the world is too huge. Of course PokerStars will be allowed entry into the U.S. marketplace despite their law-breaking ways since 2006.

PartyPoker, in the meantime, will also offer their online poker services in the U.S. But with PokerStars dominating the industry by a wide margin with no signs of letting up, PartyPoker is left to pick up the remains of the players who don’t like playing at PokerStars or the re-launched Full Tilt for one reason or another. They will never be top dog again, even though they played by the rules in 2006. A look at the London Stock Exchange shows that shares of Bwin.party dropped 7% yesterday and are plummeting again today. Nice guys, indeed, tend to finish last.

 

 

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Charles Rettmuller

Charles has been an avid poker player for a number of years, both live and online. He holds a degree in journalism and previously worked as a reporter for a Chicago-based newspaper. Charles joined the PokerUpdate team in early 2012 and writes daily news articles for the site.

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