PokerStars Attorneys Attack Legitimacy of AGA Claims in New Jersey Counter-Brief

Attorneys representing PokerStars parent Rational Group have filed a brief in New Jersey with the Division of Gaming Enforcement opposing a previous petition filed by the American Gaming Association (AGA).

Last week, the AGA sought to alert New Jersey gaming officials to reasons why Rational and PokerStars might be unfit to receive New Jersey approval to own and operate the recently purchased Atlantic Club casino in Atlantic City.

Rational Group had previously issued a statement to the media prior to its legal filing. In their formal response, A. Jeff Ifrah and David B. Deitch, on behalf of Rational Group US Holdings Inc., ask the New Jersey Casino Control Commission to deny the petition filed last week by the AGA and avoid “empower[ing] the AGA’s thinly veiled anti-competitive campaign against the entry of a competitor into the market.”

Rational asserts that the AGA has no legal standing from which to file its position and mount its attack on PokerStars, and attempts to pound home the argument that the AGA’s earlier brief is nothing but a market-protecting, anti-competitive tactic. Wrote Ifrah and Deitch, “The AGA fails to identify any limiting principle that would distinguish its effort to participate from any gaming entity’s attempt to block the licensing of a competitor.”

Noting that the AGA’s “sole interest… is economic warfare,” Ifrah and Deitch contend that permitting the AGA brief to be included in the Rational/Stars approval process would “set a precedent inviting competitors to intervene in every licensing proceeding, thereby permanently multiplying the proceedings and delaying the disposition of those matters indefinitely into the future.”

The following passage essentially sums up the Ifrah/Deitch response:

For all of its lofty rhetoric, the only interest the AGA actually has in this proceeding derives from the fact that some of its members perceive themselves to be Rational’s competitors. At bottom, the AGA’s brief constitutes an attempt by these competitors to exclude Rational from the U.S. market. That interest cannot be sufficient to support participation. Allowing the AGA’s participation here would therefore set a precedent in favor of transforming every licensing hearing into a platform for incumbents to make accusations of wrongdoing – including false ones – against aspiring licensees.

The AGA’s move to file its petition of protest against Rational and PokerStars, and to file what Ifrah and Deitch describe as “voluminous filings many hundreds of pages in length and measuring approximately three inches in height” represented, according to the AGA itself, the first time the group had sought to intervene in any regulatory licensing process.

According to Ifrah and DeitchIt, it also represented the first time that any private entity had attempted to insert itself into the approval process of a looming competitor. “Our research discloses no case in which an entity has been allowed to participate in a pending licensure hearing before the Commission based upon the type of abstract 'concerns’ on which the AGA bases its petition.”

The brief goes on to describe the AGA filing as a “perversion of the 'participation’ process which is utterly without precedent.”

The battle over the possible reentry of PokerStars into the US poker market now seems centered on New Jersey, regardless of whether the AGA brief is accepted or denied. Simply by providing the “voluminous filings” to New Jersey authorities, the AGA has attempted to place as many evidentiary hurdles as possible into PokerStars’ path.