Caesars’ Jan Jones and PPA’s John Pappas Spar at GiGse

Caesars Entertainment’s Jan Jones and Poker Players Alliance Executive Director John Pappas engaged in a lively volley regarding the legitimacy of PokerStars’ attempts to re-enter the United States online poker market.

The exchange between Jones and Pappas occurred during opening-day discussions at the Global iGaming Summit and Expo (GIGse), running this week in San Francisco.

Jones, Caesars’ Vice President of Government/Communications, and Pappas both appeared on a mid-afternoon discussion panel regarding licensing suitability. The discussion’s timely relation to the recent situation in New Jersey regarding Stars’ attempts to gain licensure—amid protests by the American Gaming Association, of which Caesars is a prominent member—guaranteed a contrast of opinion.

Several media outlets in attendance at GIGse have reported Jones as firing the first volley at PokerStars, in response to a statement by Pappas that allowing offshore operators to participate in US-based online poker would be a greater benefit to American poker players.

“PartyGaming pulled out. 888 pulled out. Not one US company would operate because it would imperil their licence. You call it gray if you like. I call it black,” Jones responded according to a report by Gaming Intelligence

The PPA has a tight relationship to PokerStars, with recent revelations that the lobbying organization has received nearly 99% of its funding from online sites, primarily PokerStars, in recent years. It recently ran a survey among New Jersey members asking whether they supported AGA’s attempt to block PokerStars’ license application—94% did not.

Both sides have some merit to their arguments. US land-based firms were never allowed to participate in online gambling, based on the then-generally-held interpretations of the 1961 Wire Act, which the UIGEA referenced.

For its part, PokerStars offered only poker, and no other forms of online gaming, unlike both PartyPoker and 888, which offered online casino games and blackjack to US-based customers. PartyPoker parent PartyGaming even briefly allowed US players to participate on two related sites, PartyCasino and PartyMarkets. PartyMarkets bore strong similarities to InTrade, which was recently barred from US activity.

The PokerStars position about online poker not being illegal is also supported by a late-2011 opinion by US Attorney General Eric Holder that the Wire Act (upon which the UIGEA was based) applied only to sportsbetting. The “Black Friday“ charges connected to PokerStars can also be construed as applying only to bank-activity deceptions practiced by PokerStars and other sites in their striving to remain open to US players, not to online poker itself.

In that viewpoint, theoretically supported by PokerStars admitting no guilt in its 2012 settlement with the Department of Justice, the agreement was reached based on Stars’ “fraudulent” banking activities, not on the online-poker service itself.

Caesars and PokerStars were recently involved in a squabble made public in the aftermath of the AGA’s New Jersey protest against Stars’ casino application in that state. In response to the AGA’s attempts to insert itself into Stars’ application for regulatory approval, Stars’ US-based legal counsel released information that Caesars had tried to sell to Stars the Rio All-Suite Hotel and Casino in Las Vegas.

The selling price for the Rio, home of the World Series of Poker, was a reported $500 million, with Caesars allegedly suggesting that Stars’ renewed efforts to enter the US market would go easier should they purchase the property. The WSOP brand itself was not, by most accounts, a part of the proposed sale, which never advanced beyond preliminary discussions.