The Canadian online gambling world is a complicated one that is often frustrated by law changes and even lawsuits. A recent lawsuit in Quebec against Amaya Gaming, an online gaming company, is struggling against a series or problems related to their acquisition of PokerStars. This poker company was a primarily United States group that operated after the UIGEA.
Unfortunately, these lawsuits could put a damper on Amaya’s ability to get further gaming licenses and slow its expansion. Currently, Amaya is one of the most popular sources of Canadian online gambling. But its issues with PokerStars could slow or even halt that expansion.
Once Amaya purchased PokerStars, it was immediately placed under a five-year ban. This was directly related to PokerStars operating after the UIGEA, even though Nevada had legalized online poker.
Even worse, a lawsuit in California is looking to not only extend that ban to the state (for at least five years), but potentially banning the company forever.
These actions would be somewhat extreme, considering the Amaya is only a purchasing agent of PokerStars. Many of the main heads in the latter company have since moved on, and Amaya didn’t make any of the decisions for the company prior to the buyout. However, that isn’t stopping many in California from asking for the ban to be placed on Amaya.
The Potential Impact
If five-year bans of Amaya are extended in California (or even a permanent one), this could bode set a precedent for the way other states approach the company, should they decide to legalize online poker.
PokerStars is still heavily frowned upon after the Black Friday raids and seizures found that that company had been laundering money and behaving in criminal ways. Though the company paid a fine, memory can be long-lived in the business world.
Even with all new principals being involved with the running of PokerStars under Amaya, Nevada is sticking with its band and California is continuing to pursue their own. If the ban is successful, other states across the country may begin extended similar bans to Amaya and PokerStars. A five-year ban would seriously impact their place in the market.
It Gets Worse
Bans on Amaya could make it more difficult for them to acquire additional gaming licenses to expand their business. For example, if they were interested in purchasing an online blackjack site, they wouldn’t be able to get it up-and-running until the five-year ban was lifted. They would essentially have prime properties just sitting there waiting to go into effect.
While they could still obviously operate in other countries, including their home Canadian market, the US could potentially be a prime source of income for the company. While online gambling is either banned or heavily limited in most states, full legalization would allow companies like Amaya to tap into an extensive and valuable market.
Without the ability to operate in America, Amaya may suffer from a serious financial setback. Problems like this often plague even the biggest names in the online gaming world. The solution to the problem would be for Amaya to fight against this lawsuit and win, but it will take a long struggle to succeed.