Pala Interactive Will Not Launch Its New Jersey Online Poker Room

The Pala Band of Mission Indians has decided not to launch its online poker brand in New Jersey, due to the imminent arrival of PokerStars into the Internet card playing industry there. Pala’s online casino has been in operation since November 2014.

The Pala Band of Mission Indians are one of many tribal gaming reservations in California. Partnering with Borgata, the tribe launched PalaCasino.com. The tribe’s own land-based casino (Pala Casino and Spa) is based in San Diego County, California. Their brick-and-mortar entertprises have had trouble in the recent past, so the Pala Tribe decided to enter the online gambling industry of New Jersey.

PokerStars Changes the Equation

In the near future, it is expected PokerStars will enter the New Jersey poker market. If it happens, then PokerStars should dominate the card playing sites. It has the large poker-playing community to drive player traffic. Online casinos don’t need large communities in quite the same way, so Pala Interactive should be able to compete better there.

“Liquidity Is Obviously a Challenge”

Pala Interactive’s CEO, Jim Ryan, spoke to CalvinAyre about their decision not to launch a poker site in New Jersey. Ryan said, “We put that on hold because we do expect PokerStars to enter the market, not that we would have grabbed a significant share because there are two very credible poker networks operating in the state of New Jersey at this point in time. Liquidity is obviously a challenge.”

Jim Ryan says the Internet casino market is competitive and he expects good results from his company’s launch. Borgata, Pala Interactive’s partner, is the leader in the New Jersey market. Ryan said he sees a good future on the casino gaming side of thing, saying, “The casino product, we actually think we can take a meaningful share of that marketplace.”

Interstate Gaming Compact Would Help

The gaming executive added that the best way to help the smaller online card rooms in the New Jersey gaming market would be to sign an interstate poker compact, which would allow states to pool their players. Delaware and Nevada already have a compact and are set to share players in the near future. The Division of Gaming Enforcement in New Jersey has talked to officials in Nevada and the United Kingdom about sharing players, though nothing solid has yet happened.

PokerStars’ Bad Actor Troubles

Given possible troubles on the horizon for Amaya Gaming, the assumption that PokerStars is going to be approved by the Division of Gaming Enforcement could be premature. When Amaya Gaming purchased Rational Media for $5 billion in August 2014, it bought the rights to PokerStars and FullTilt Poker, two of the largest online poker companies in the world.

The trouble with both of those brands is their past with the US government. Both companies faced harsh enforcement from the US government due to the Black Friday Scandal of 2011. PokerStars had its licensed application process suspended by the DGE in October 2013, due to ongoing concerns about PokerStars’ executives. In other states, the world’s #1 leading poker site faced bans for “bad actor” practices.

Amaya Gaming Faces Investigation

Those troubles were expected to be overcome when Amaya Gaming, a Toronto-based gaming software company with 60 U.S. licenses, bought PokerStars. State Senator Ray Lesniak predicted PokerStars would enter the New Jersey market in October 2014, but it is now 5 months later and the DGE is still in a holding pattern. Many, including Lesniak, predicted PokerStars soon would be entering the market, but a new scandal could derail that move.

Authorities in Toronto are starting to investigate Amaya Gaming itself for irregularities in stock trading prior to the purchase of Rational Media. An unnatural amount of trading took place on Amaya Gaming just prior to the announcement of the PokerStars deal. Such activity is often suspicious, because it could involve insider trading. The truth behind that process needs to be ascertained, and early indications are it could involve high-ranking Canadians and the scandal could get complicated.