A DEAL for the egaming company Pokerstars to take over rival egaming company Full Tilt has been described as good news by the government’s head of egaming.
Tim Craine, who took over the post from Garth Kimber said that despite legal action in America a year ago, Pokerstars had been able to keep its reputation and continue trading.
‘Pokerstars is licensed by the Gambling Services Commission in the island and they are obliged as a condition to have their player funds in segregated accounts. This is known as segregation of player funds,’ he said.
In contrast to this, Full Tilt had its licensed offices in Alderney in the Channel Islands and was not subject to this requirement.
He said after legal questions were raised in America, Pokerstars had its assets in the UK frozen.
But he said access to its funds was quickly restored and it had been able to get its website back up and running and have its licence returned quickly.
‘This happened within a week and player confidence rapidly returned from the point where the action was taken,’ he said.
Since the action, Pokerstars funds had been frozen in America but following the latest announcement have been released.
This means players who until then had no hope of getting back stakes and winnings will now be able to.
Mr Craine said the legal action came about after the American department of Justice changed its view on the status of poker.w
Originally viewed as a game of skill, he said as such it did not fall foul of their legislation which controlled gambling. But a change of attitude by the authorities saw them classify it instead as gambling, putting the company in breach of US regulations on internet gaming.
As a result, the company’s assets in America were frozen, as were those of Full Tilt. As part of its settlement agreement, PokerStars has acquired the assets of Full Tilt Poker, and has said it will also reimburse Full Tilt Poker customers outside the United States.
The total amount to be paid by PokerStars is reported to be $547m which will be payable over three years.
The money paid to the US Government will in part be used to reimburse former Full Tilt Poker customers in the United States, through a remission process to be administered by the Department of Justice.
PokerStars repaid all amounts owing to its own US customers shortly after it closed its US operations.
PokerStars will also make available in a segregated bank account, all outstanding balances owing to all non-US customers of Full Tilt Poker
Online gambling companies came under threat in America after 2006, when the Unlawful Internet Gaming Enforcement Act was passed. This act prohibited banks from transferring funds to gambling sites.
Full Tilt and PokerStars were accused by the US authorities of trying to work around the ban to continue to operate in the US.
Mark Scheinberg, Chairman of the Board of PokerStars told the Wall Street Journal: ‘We are delighted we have been able to put this matter behind us, and also secured our ability to operate in the United States of America whenever the regulations allow.
‘This outcome demonstrates our continuing global leadership of the online poker industry, and our commitment to working with governments and regulators to ensure the highest standards of protection for players.’
Neither PokerStars or Full Tilt admitted to any wrongdoing as part of the agreement.
The Pokerstars web site states: ‘Real money play and deposits by residents of the US and US Territories are strictly prohibited. Real money play by non US/US Territories residents while physically present in the US or US Territories is likewise strictly prohibited
Commenting on the Pokerstars deal Mr Craine said: ‘From a government point of view we are delighted a deal has been reached.
‘We are proud to have a prestigious company like Pokerstars present in the island with its headquarters here.
‘Now that a settlement has been reached they are able to move forward. There was a lot of speculation over the past two months that a deal was coming so it is good it is now formal and has been cofirmed.’