PokerStars’ NJ Licensing Carries Implications for California

In the past few years, PokerStars has been through the ringer in its attempts to become legalized in New Jersey. But last week, state regulators finally announced that they had approved the site to begin operation in the state. While besides New Jersey, only Nevada and Delaware offer online poker, PokerStars’ reentry into the US could have implications for other states considering legalizing the industry.

For several months, nothing was known of PokerStars’ New Jersey online gambling license application. Once in a while, politicians or industry insiders would claim that the company would receive its license “imminently,” but the news never seemed to pan out.

Last week, New Jersey’s Division of Gaming Enforcement finally gave us the reason why things have taken so long. In its investigation into the company, the agency had gone to great lengths to ensure that PokerStars would be a good operator in the state. They revealed that they had interviewed 70 witnesses about the company, traveling to up to six international jurisdictions to do so.

Implications for California

The clean bill of health it has now received from New Jersey regulators can go a long way in convincing other states that PokerStars is not a “bad actor” – as some have accused it to be – and should therefore not be invited to apply for license.

In California, PokerStars fought against the powerful Pechanga tribe, which claimed that the company’s role in Black Friday should preclude it from becoming licensed in the Golden State. Next year, when the topic of online poker surfaces again in the state legislature, critics of the company are going to have less of a leg to stand on for that argument.

While Stars has not yet launched in New Jersey, when it does, its traffic will be closely analyzed for an indicator of how much traffic it could bring to other states, like California. In Italy, the site has single-handedly grown the entire poker market by a massive 62% upon its entrance there. With the company’s large marketing budget, name recognition and good reputation in the poker world, many believe that it can do the same in New Jersey’s fledgling market.

The poker sites which currently operate legally in the US offer software which is seen as far inferior to PokerStars’ polished product. When the iGaming giant finally launches in New Jersey, the argument that it should be considered a “bad actor” will become all the more silly.