PokerStars founder Isai Scheinberg has pleaded guilty to running a multi-million-dollar online gambling business. The admission of guilt comes under certain conditions and is an opportunity for Mr. Scheinberg to clear his name. His incredible rise and the business he has built around PokerStars are, as Forbes put it, incredible.
Mr. Scheinberg agreed to plead guilty as all other charges against him have been dropped and New York court Judge Lewis Kaplan is now debating on the sentence.
Geoffrey Berman, who serves as US Attorney for the Southern District of New York, has reminded that Mr. Scheinberg was arrested back in 2019 at the request of the United States in Switzerland.
Mr. Scheinberg first appealed the decision to be extradited from the country, but then withdrew it, deciding to settle matters in an American court instead.
The US Attorney reminded that Mr. Scheinberg was among the 11 individuals charged for operating what Mr. Berman described as fraudulent payment processing services to three distinct websites, PokerStars, Full Tilt Poker and Absolute Poker.
Responding to media inquiries, Mr. Scheinberg himself said that he was happy with the outcome and the fact that all charges related to violating the 1971 Gambling Act had been dropped.
He further added that all PokerStars players had been paid and that any party that might still had been owed money, had been paid as well.
Fighting UIEGA and Setting Up the Future of Poker
While law is not subject to interpretation, the passage of the Unlawful Internet Gaming Enforcement Act (UIGEA) in 2006 has been a source of disturbance across the United States, even in the freshly legalized climate for sports betting, which has also given online poker a chance to establish itself in a re-regulated market, and especially in states such as Delaware, New Jersey and Pennsylvania.
Many states are even considering legalizing the activity. However, the fact remains that in the Department of Justice’s eyes, in Mr. Scheinberg’s case, the law was broken. A number of prominent pioneers of online poker in the United States have also been charged previously, including Full Tilt CEO Raymond Bitar and PokerStars’ payments director Paul Tate.
In fact, ten out of the 11 defendants, have been sentenced, receiving various penalties from jail time to simple fines. Shortly after the 2011 crackdown on PokerStars, the company agreed to forfeit $547 million to the US and reimbursed $184 million Full Tilt Poker Players.
As Mr. Scheinberg had to withdraw from the company, his son, Mark Scheinberg, took the reins over in 2013, and he agreed to forfeit an extra $50 million to settle additional traction with authorities.
Mr. Berman has thanked the Department of Justice and the Federal Bureau of Investigation and Homeland Security Investigations for assisting in the matter and settling the case.
Things have changed a lot since Mr. Scheinberg’s era, however. Rational Group, the parent entity of PokerStars has been sold to Amaya Gaming Group back in June 2014 for the significant $4.9 billion.
The rebranded company – The Stars Group – has also continued to add assets, specifically by securing another milestone deal with Sky Betting & Gaming back in April 2018. TSG has also decided to merge with Flutter Entertainment, creating yet another behemoth.