Founder of PokerStars Isai Scheinberg Surrenders to Federal Authorities
After entering the United States from Switzerland about a week ago, the founder of PokerStars, Isai Scheinberg, has surrendered to authorities. At age 73, Scheinberg is charged with several gambling and financial crimes, including bank fraud as well as money laundering. In court, the online poker site founder pled not guilty and was released on $1 million bond. He has surrendered his passports and will be limiting his movements in Washington D.C. and New York.
A Little Backstory
To understand why this is a big deal means to go back a ways. Black Friday, the infamous day in 2011 when the government in the United States seized the PokerStars domain, is where it started. Isai and his son Mark founded PokerStars back in 2001. They operated the company in Costa Rica and then moved to the Isle of Man.
Everything was great and PokerStars was huge and then 2006 hit. A new federal gambling law known as the Unlawful Internet Gambling Enforcement Act (UIGEA) placed criminal charges on offshore poker sites. PokerStars did not leave the US after the law was enacted and by April 15th, 2011 (Black Friday), prosecutors in New York placed indictments on Scheinberg and the site was temporarily shut down.
In total, eleven men were charged with gambling related crimes and Scheinberg is now the last of the group to face the charges. It is presumed that he will cut a plea deal.
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Isai Contribution to the Poker World
It is pretty easy to see that Scheinberg was committing a crime when he continued to allow PokerStars to operate in the United States after UIGEA. It was this decision to remain in operation that has caused issue for the company now. While they offer online poker in the state of New Jersey, other states considering online poker gaming has placed bad actor clauses in legislation, such as California, to keep brands like PokerStars from offering services.
While the founder did break the law, the poker community sees the contribution made by PokerStars to the industry. Back in the day, PokerStars was a driving force behind poker gaming, pushing the envelope and offering huge guaranteed events, satellites to major events like the WSOP, which propelled attendance to another level.
By 2014, the Scheinbergs had let go of their PokerStars brand, selling it for close to $5 billion. Over the years, the government has tried to get their hands on Isai to no avail. Now, he has turned himself in and will face the consequences for his actions dated back almost a decade.
It is quite interesting to see Scheinberg turn himself in after almost nine years from the time when he was first charged. Many may have already forgotten the issues that arose after Black Friday took place. For now, the criminal proceedings against the founder of PokerStars will resume and will stay tuned to all of the developments and report on anything that arises.