The recent raid on the Bicycle Casino & Hotel, a South Californian gaming facility could affect PokerStar’s chances to enter the state’s $4 billion online gaming market according to a local gaming official.
The world leading online poker site is in partnership with a consortium of local players which includes two tribal groups and several brick-and- mortar gaming facilities, one of which is the Bicycle Casino. The tie-up is expected to help PokerStars enter California’s online poker market once it becomes legalized.
Online poker legislation has been struggling in California due to disagreements around the suitability clause. Opposing tribal groups want PokerStars to be excluded from the state, as tribal operators accused the online poker giant of being a bad actor for continuing to operate after federal restrictions were imposed.
Just last week the Bicycle Casino was raided and shut down for a day by federal authorities. It is widely suspected that the casino is being investigated for money laundering. The raid could harm PokerStars’ position and worsen the divide between local players, according to Steve Stallings, chairman of the California Nations Indian Gaming Association.
In a statement Stallings said,
Another indicator of how fragile that PokerStars coalition may be is the raid on the card club in [Bell Gardens]. They’re part of the PokerStars relationship. When a card room gets raided by federal law enforcement, it only adds to the problems of PokerStars and some of its partners, not all of them, and this whole kind of suitability issue that will affect everyone.
PokerStars is in no way involved in the investigation but with online poker legislation being a sensitive topic, the company might be affected by its association with the casino. Last year, the site’s parent company Amaya Inc. faced regulatory trouble after its erstwhile CEO was charged for insider trading by a regulatory body in Canada. Earlier, under previous ownership, PokerStars was the subject of a federal investigation which it settled by paying a fine of $700 million without admitting to doing any wrong.
Stallings noted that the company had become less active in terms of lobbying efforts in the past few weeks. Amaya recently announced its fourth quarter results, where it showed a drop in the share of online poker revenue, indicating its increased focus on casino games. Stallings said that the shift had been noticed in California but would have no impact.
Given the current scenario, Stallings said that the possibility of online poker legislation passing this legislative session was still at 50-50 percent despite over 98 percent of the bill being ready.