PokerStars founder Isai Scheinberg walks free from New York court
Driving force behind operator’s early growth sentenced to time served and $30,000 fine almost a decade after Black Friday
Isai Scheinberg, the founder of PokerStars, has been sentenced by a New York court to time served and handed a $30,000 fine for his involvement in the poker operator’s US-facing business in the 2000s.
Scheinberg, who holds duel Israeli and Canadian citizenship, pleaded guilty in March to operating a multi-million-dollar unlawful internet gambling business after the passing of the Unlawful Internet Gaming Enforcement Act (UIGEA) in 2006.
He was one of 11 individuals and four companies indicted on charges of illegal gambling, bank fraud and money laundering on 15 April 2011.
US players were blocked from accessing PokerStars, Full Tilt Poker and Absolute Poker from that date after authorities seized these US-facing operators’ domains in what became known in the poker world as Black Friday.
The 74-year-old had been facing the prospect of 12-18 months behind bars, but the government recommended a lighter sentence.
One reason was that the Department of Justice reached a deal with PokerStars in 2012 whereby the Isle of Man-based business took on the $304m Full Tilt owed players following its collapse.
PokerStars also agreed to forfeit $545m to US authorities and to reimburse Full Tilt Poker’s players outside the US to the tune of $184m. The following year, Scheinberg’s son, Mark, agreed to forfeit $50m to US authorities.
PokerStars was sold to Amaya in 2014 for $4.9m and is now part of Flutter Entertainment following the London-listed giant’s mega-merger with PokerStars’ parent company, The Stars Group.
In a statement issued to poker media outlets, Isai Scheinberg said he was pleased Judge Lewis A. Kaplan had not imposed a prison sentence. He also said PokerStars ran an “honest and transparent business that always treated fairly”.
He added: “I am particularly proud that in 2011, when PokerStars exited the United States, all of its American players were made whole immediately.
“Indeed, PokerStars reimbursed millions of players who were owed funds from other online companies that could not or did not repay those players.”