The Scheinberg family are set to sell PokerStars and Full Tilt Poker for nearly $5bn to Amaya Gaming. Having been plagued in controversy in the past, particularly in the United States, the buying group is hoping to win support from US state regulators by cutting ties with the Scheinbergs.
As reported in The Guardian, the Scheinberg family who is based in The Isle of Man, are set to sell the controversial business – PokerStars and Full Tilt Poker (FTP) – in a deal backed by private equity group Blackstone. The sale is designed to draw a line under the group’s contentious past in America which has left past senior executives, including Isai Scheinberg, charged in the US with bank fraud, money laundering and illegal gambling offences.
In April 2011 the Department of Justice indicted 11 individuals for operating illegal gambling businesses and shut down the US facing web sites of PokerStars and Full Tilt Poker. Isai Scheinberg was indicted as founder, owner and principal decision-maker for PokerStars. They also arrested the then CEO of FTP Ray Bitar in July 2012 and the US attorney accused FTP to be a Ponzi scheme.
Full Tilt Poker was purchased by the Scheinberg group in April 2012 and relaunched FTP on November 6, 2012. The launch was marred by news that affiliates and some players would not have their funds returned. Since then the two companies, combined under the Rational Group, have been operating side-by-side and made $1.1bn in revenue last year, largely from European markets.
So far in the USA, state-based online poker licences have not been granted to PokerStars, in part because of its past. The business is being bought by Amaya Gaming, a relatively small casino and lottery software group listed on the Canadian stock exchange. It is taking on huge borrowings to fund the deal from Blackstone, Deutsche Bank, Barclays, Macquarie and others. The transaction will result in Amaya becoming the world’s largest publicly-traded online gaming company.
Based on official statements, the Rational Group’s executive management team is expected to be retained and online poker services provided by PokerStars and Full Tilt Poker will be unaffected by the sale, with players expected to continue to enjoy uninterrupted access to their gaming experience.