Caesars Entertainment and PokerStars Join Forces to Champion US Online Gaming

Last updated on November 2nd, 2018

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Caesars Entertainment has joined forces with PokerStars to promote online gambling in the United States, in which could be one of the most pivotal gaming alliances in recent gambling history. The two gaming companies have been at odds in the past on gaming legislation, regulatory oversight, and law enforcement. With changes at the top of both companies in the past year, a new era is dawning.

PokerStars has been the #1 online poker company for the past 10 years. Caesars Entertainment, despite its troubles with bankruptcy, remains the American gaming company with the most domestic brick-and-mortar casinos. One company is the epitome of American land-based gaming, while the other is a paragon of the online gambling industry. The two have agreed to champion legalized online gambling in the United States, which is under assault by Sheldon Adelson and his legislative allies.

PokerStars and Caesars Had Clashed

Caesars Entertainment has been a critic of PokerStars in the past, going so far as labeling the Internet poker site a “bad actor”. PokerStars and FullTilt Poker are owned by the Rational Group, which was purchased by Amaya Gaming for $5 billion last summer.

Amaya Gaming’s David Baazov wanted to bring a new era to its biggest new property. The executives who led PokerStars into the Black Friday scandal and who continued to face indictments by the US Justice Department left the company in the fall of 2014. Baazov hoped to have PokerStars licensed by New Jersey soon after, but that has proven more difficult than first expected.

Adelson’s Influence on Christie

If New Jersey State Senator Raymond Lesniak can be believed, PokerStars’ late entry into the New Jersey gaming industry is due to the influence Sheldon Adelson has on Governor Chris Christie. Everyone knows Gov. Christie wants to run for US president in 2016. To do that, he needs money from donors like Sheldon Adelson, who spent $90 million on GOP candidates in the 2012 election. In that same year, Chris Christie was flown to Israel in Adelson’s private jet.

The problem is, Chris Christie and Sheldon Adelson are at odds on the Las Vegas Sands Corp’s chairman’s pet issue: an online gambling ban. In many ways, no US government has led on the licensed online gambling issue more than Chris Christie, which couldn’t please LVS’s chairman. To appease the Las Vegas gaming executive, Ray Lesniak says that Christie has put pressure on his own Division of Gaming Enforcement to delay PokerStars’s entry into the New Jersey market. Adelson knows the impact PokerStars would have on the industry.

Caesars Changes Its Stance

In many ways, Caesars Entertainment has long held a similar view to the Las Vegas Sands Corporation on the online gambling issue. Though Caesars stood to gain on Internet gambling in the Atlantic City market, the company is a land-based gaming entity–which often sees online gambling as a dangerous rival. So Caesars Entertainment and its Internet wing, Caesars Interactive, have argued against PokerStars’s entry, on “bad actor” grounds.

Wise Move on Both Sides

Both companies stand to gain if they set aside their differences and work together to assure the future of online gambling in the United States. Too often in the past, the American brick-and-mortar gambling industry has worked against the online gambling industry. A major reason that online gambling in the US is hanging in the balance as a legal hobby is the hostility of the land-based gaming industry, or at least a significant section of it.

The American Gaming Association is neutral on the issue, because the various members of the AGA’s board of directors cannot agree. The AGA’s board has representatives from Las Vegas Sands, Wynn Resorts, MGM Resorts, Caesars Entertainment, IGT, Bally Technologies, the American horse racing industry, and the lottery companies. Because Las Vegas Sands chairman Sheldon Adelson provides the impetus for the anti-online gambling movement, the leading representative of the US’s top gaming advocate cannot form a policy on one of its most important issues.

The problem such rifts cause are enormous. When the gambling industry says one form of gambling is perfectly acceptable and another form of gambling is evil incarnate, it opens every gaming advocate up to the charge of hypocrisy. Since gaming advocates tend to use such arguments against opponents of casino gambling, it puts lobbying efforts in jeopardy and makes a laughingstock out of the community in general.

So the idea that land-based giant Caesars Entertainment and online giant PokerStars could agree on a common policy is a good sign. Caesars needs the additional revenues provided by legalized online gambling. Amaya Gaming and PokerStars needs a foot in the door of licensed Internet gaming. The state of New Jersey needs all the healthy companies it can get working together to save Atlantic City’s gaming industry. So this week’s announcement is a win-win proposition.