Rumor has it that PokerStars is set to pull out of Canada by year’s end.
It came as a bit of a shock recently when PokerStars announced it would no longer be sponsoring the Montreal Festival and asked that all their branding be removed from the event. The announcement was posted on 2+2 forum by PokerStars head of communications Lee Jones as follows:
“Due to unforeseen circumstances, PokerStars will not be continuing its participation in the upcoming festival,” Jones wrote. “However, the tournament will continue as planned as the ‘Playground Festival of Poker’ and we will, of course, honor our previous commitment to players and satellite winners. No other PokerStars services in Canada are affected.”
The announcement of course has tongues wagging and Canadian players asking what the future of PokerStars and Full Tilt is in Canada especially considering that Skrill/Moneybookers pulled out of Canada last year and Matchbook pulled out earlier this year. I spoke with two individuals with some knowledge of the situation and both stated that everyone is spooked by the budget bill passed this year by the Canadian Federal government that would require full regulation of online gambling sites as well as digital currencies to eliminate any anonymity associated with those transactions. The government stated the legislation was necessary to stop money laundering and terrorist activities and while there is nothing in that budget that specifically relates to offshore gambling it was quite clear that sites which had any Canadian affiliation at all (i.e. management living in Canada, assets in Canada etc.) could be targeted if the government chose to go after them. Not surprisingly the announcement of that legislation received mixed reaction by Canadian bitcoin companies since the regulation of the digital currency gives it extra legitimacy but at the same time one of the biggest benefits of the currency, especially to gamblers, was the anonymity associated with transactions. So itâ€™s truly a catch-22 situation for bitcoin websites.
At the same time, Amaya, being a publicly traded company on the Toronto Stock Exchange with its head office in Montreal is clearly a Canadian operation and would have an immense amount to lose if they are found to be in violation of the Canadian law. Moreover, Amaya is currently in talks with the Quebec government to be a partner for their online poker product and all that is left is the crossing of the â€œtâ€s and dotting of the â€œIâ€s. As a private company operating in Alderney, PokerStars really wasnâ€™t at risk with the Canadian government but as a Canadian owned company things have changed. PokerStars is also looking to operate in New Jersey and other states like Nevada and California and while they were shot down by various sources in those states due to the â€œbad actorâ€ clause, the complaints against them are now lifted since Isaiah Scheinberg is no longer an owner of the company. This was reported by OSGA earlier when a legislator at the New Jersey Division of Gaming Enforcement stated at GIGSE that the bad actor clause related only to an individual and not to a corporation. And thereâ€™s no question that Amaya wants to get out of all grey markets to look squeaky clean when they receive a license in those jurisdictions.
As to why PokerStars chose to withdraw from the festival and not just pull out immediately, one of the sources said that he is almost certain that Amaya made a deal with the government to withdraw gradually so there wasnâ€™t the same backlash that occurred in the U.S. after Black Friday where PokerStars and Full Tilt account holders were left scrambling and all parties including the federal government came out looking bad. He also said that the fact that the Montreal Festival was being held in a poker room in Kahnawake, which he called â€œso grey itâ€™s almost blackâ€, made PokerStars more anxious to remove all association with the event.
If the source is correct then an announcement will come from Amaya in the next month or two indicating that the company will be withdrawing from Canada on a certain date. The company will announce that Canadian players will no longer be permitted to enter any events with a prize after that time and will also announce the last date Canadians can play in any PokerStars game. The announcement will also state that money in player accounts must be withdrawn from the accounts by year end and the site may even offer some easier ways to withdraw the funds for Canadian players such as credit cards.
Fortunately for Canadians it seems clear that the anti-money-laundering bill is only affecting companies that are publicly traded and that have major assets in Canada. That excludes most of the offshore companies that Canadians have grown to love.