PokerStars founder Isai Scheinberg was this week delivered his verdict for his role in the online poker operator’s US-facing operations after the implementation of the Unlawful Internet Gambling Enforcement Act of 2006 that declared online gambling illegal in the United States.
Mr. Scheinberg, who founded PokerStars in 2001 with his son, Mark, was one of 11 individuals and four online poker companies to be indicted on charges of illegal gambling, conspiracy to commit bank fraud and money laundering, and more.
The 11 indictments were unsealed on Friday, April 15, 2011 in Manhattan by former US Attorney Preet Bharara. The online poker community now refers to that day as Black Friday because some of the world’s largest online poker rooms were forced to shut their doors to US players.
https://www.casinonewsdaily.com/2020/09/01/pokerstars-quits-china-macau-taiwan/
US District Court Judge Lewis Kaplan sentenced on Wednesday Mr. Scheinberg to time served and a $30,000 fine for running an illegal online gambling operation in the US. He pleaded guilty to that charge in March.
Mr. Scheinberg could have been sentenced to up to 18 months of jail, but prosecutors recommended that he not serve additional time due to several mitigating factors.
PokerStars Deal with DOJ Instrumental for Lenient Sentence
Prosecutors said they believe Mr. Scheinberg has a low likelihood of becoming a repeated offender, which was one of the reasons why he was sentenced to time served instead of being delivered a heavier sentence that would have involved serving time in prison.
However, PokerStars’ deal with the US Department of Justice in 2012 is believed to have been the most important reason why Mr. Scheinberg avoided jail. The deal saw PokerStars acquire fellow poker room Full Tilt Poker for $731 million and repay what the latter owed to its players.
Full Tilt collapsed after Black Friday because it was unable to repay more than $330 million worth of player deposits. PokerStars avoided such trouble as it had kept players’ funds separate from its other finances.
Mr. Scheinberg surrendered to US authorities this past January after federal prosecutors issued late last year an extradition request during a trip the Israeli-Canadian businessman took to Switzerland. He initially tried to fight the extradition but eventually traveled to New York voluntarily.
During a hearing that took place in Manhattan federal court in January, Mr. Scheinberg pleaded not guilty to the charges leveled against him and was released on a $1 million bail.
In 2014, Mr. Scheinberg and his son sold PokerStars’ parent company, The Rational Group, to fellow Israeli-Canadian entrepreneur David Baazov in a massive $4.9 billion deal. The poker operator is now owned by Irish gambling giant Flutter Entertainment after that company’s tie-up with PokerStars’ owner, The Stars Group, in May.
PokerStars returned to the US online poker scene in 2016 when it launched its operations in New Jersey. Currently, it also operates in Pennsylvania.
Follow us on Facebook and Twitter to stay up to date on the day’s top casino news stories
