The end of March brought up-and-down news for Amaya Inc., the parent company of PokerStars and Full Tilt, but the beginning of April was met with positive headlines. On Friday, April 1, 2016, Amaya announced that the New Jersey Division of Gaming Enforcement (DGE) had renewed the company's approval to operate in the Garden State.
Similar to the first approval, the renewal has been granted for six months, at the end of which Amaya will need to seek further approval to continue to operate in the regulated real money online gaming market of New Jersey.
Following a lengthy reviewal process, the world's largest online poker site was granted initial approval for New Jersey on Sept. 30, 2015. On March 16, 2016, the site opened its doors to a maximum 500 players for a five-day soft launch. Then on March 21, the officially launch took place.
"While it's very early, we're extremely pleased with the initial launch of PokerStars in New Jersey and the positive working relationship that Amaya has with the DGE," said Amaya Interim CEO Rafi Ashkenazi. "I'm very proud of our employees, including those we have hired in New Jersey, who have worked diligently to prepare for the launch of a robust, stable platform backed by great customer service. We hope to continue our early positive momentum in the market as PokerStars NJ continues to roll out additional marketing and promotions."
The official launch proved a healthy one, with 16 of the 17 opening-day tournaments surpassing the guarantee. In the days to follow, PokerStars quickly asserted itself as the top online poker offering in the New Jersey market, surpassing both the WSOP.com/888 and partypoker/Borgata networks.
At time of writing, PokerStars NJ had a seven-day average for real-money ring-game players of 180, according to PokerScout.com. That can be compared to 140 for WSOP.com/888 and 100 for partypoker/Borgata.
Good Timing for Good News
As mentioned, the end of March was a bit of a roller coaster for Amaya. Despite all of the positive headlines the launch of PokerStars New Jersey provided, dark clouds quickly followed.
On the same day as the launch of PokerStars in New Jersey, the site announced plans to hit players with rake increases in a variety of games, amounting to an increase of roughly four percent. This news, and the way it was released, did not sit well with the vocal community. Especially given that many were still very much upset at PokerStars for its decision in late 2015 to cut back on high-end rewards.
Then, two days later on March 23, Amaya CEO David Baazov had five charges of insider trading filed against him by the Autorité des Marchés Financiers (AMF), Quebec's securities regulator. The charges stem from an investigation launched following the acquisition of PokerStars and Full Tilt by Amaya in a mega $4.9 billion deal.
The insider trading charges then led to Baazov taking an indefinite leave of absence, to which Amaya announced that Divyesh (Dave) Gadhia had been appointed as Interim Chairman and Ashkenazi as Interim CEO.
Most recently, it was announced by global investor-rights law firm Rosen Law Firm that it would be filing a class action lawsuit against Amaya in an effort to recover damages for investors of Amaya under the federal securities laws.
New Jersey Sees Benefit of PokerStars
Despite the charges filed against Baazov for insider trading, the news that the DGE has accepted Amaya for a renewed approval over the next six months is a positive one and sheds some light on the thought process of the decisions makers in New Jersey. It also bodes well for the future of PokerStars in New Jersey.
This occurrence of renewal can be seen in similar light to the original approval of the six-month transaction-waiver that came in 2015, as an extensive review of the AMF investigation was part of the process.
Although it's unlikely the DGE made a snap decision simply based off PokerStars' impressive results since its launch, the positive impact the site has had on the New Jersey market does nothing but help the cause and is without a doubt grabbing the majority of the attention in the state. After all, the state's regulated online poker market did hit a two-year high following the launch of PokerStars, as written by Nick Jones of PokerIndustryPro.
Understanding that the DGE's approval and renewal processes involved the AMF investigation then and now helps us to believe that there is more weight on PokerStars remaining in New Jersey for the long haul, as opposed to suffering any setbacks in the licensing process.