PokerStars founder Isai Scheinberg has been hit with a $30K USD fine, but avoided any additional prison time, for charges dating from Black Friday in 2011.

Scheinberg was one of several executives charged with multiple serious offences, including conspiracy to defraud the US, bank and wire fraud, and money laundering. In handing him the fine, the judge took into account time already served in federal custody. 

As we reported in January 2020, Scheinberg, a duel Canadian-Israeli national national, was arrested by US authorities after voluntarily returning to New York, following almost a decade in exile in Canada, the Isle of Man, and Switzerland. 

US authorities finally filed an extradition request with the Swiss government in 2019, leading to his arrest by Swiss police on 7 June of that year. Though he initially appealed against extradition, it thought he returned of his own accord after reaching a deal with the Federal Prosecutor. 

Initially, Scheinberg had pleaded not guilty to all charges and was released on a $1M bond, but on 25 March he entered a guilty plea. 

UIGEA and Black Friday

The whole drama started when the US passed the Unlawful Internet Gambling Enforcement Act (UIGEA) in October 2006. This made it a federal crime to knowingly accept payments in connection with unlawful internet gambling in most circumstances. 

However, PokerStars, Full Tilt Poker, and Absolute Poker continued to serve US-based players. This eventually led to the US Department of Justice indicting executives, including Scheinberg, at the operators, seizing the PokerStars.com domain, and blocking US players, on what became known as ‘Black Friday.’

PokerStars lived to fight another day

Though PokerStars managed to survive after Scheinberg exited it, and the company forked out nearly $731M to settle a government lawsuit, and in 2014 it was acquired by Canada-based Amaya Gaming, becoming The Stars Group, Scheinberg was forced into exile abroad to escape prosecution. 

After the repeal of PASPA in May 2018, PokerStars once again offered its services to US-based customers, this time legally, initially in New Jersey and Pennsylvania. In October 2019, The Stars Group entered a huge £10BN GBP merger with London-listed online gambling giant Flutter Entertainment (formerly Paddy Power Betfair). 

AYO.NEWS says:

Considering how much has changed regarding online gambling in the United States since Black Friday, it would have been more than a little cynical for the judge to have handed out any additional prison time, and we’re sure Scheinberg will be relieved with the $30K fine. After almost a decade, the Black Friday epic may finally be coming to a close. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

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