After nearly ten years, the portion of the Black Friday case involving PokerStars founder Isai Scheinberg has been settled. And in the eyes of many, it seems to be a pretty good deal for Schienberg as has he receives no jail time while being charged a modest $30,000 fine.
Schienberg had been in the United States since January after being extradited to the county related to charges of illegal gambling, bank fraud and money laundering. After arriving in the United States, he pled not guilty and was released on a $1 million bond. In March, Schienberg pled guilty to the charges, where he could have faced up to five years in jail.
Black Friday impact
Schienberg was among 11 individuals who were charged with online poker related crimes for engaging in major roles in PokerStars, Full Tilt Poker, Absolute Poker and Ultimate Bet.
In the wake of the charges, each of the poker rooms halted play from the United States with Absolute Poker and Ultimate Bet folding shortly folding. Full Tilt Poker experienced significant cash flow issues, was shuttered but ultimately was absorbed PokerStars.
For its part, PokerStars quickly paid players in the United States its balances while continuing to offer online poker room to players outside of the United States. Today, it remains the largest online poker room in the world and is even part of the regulated online poker markets of New Jersey and Pennsylvania. Schienberg left PokerStars in 2014 after the company was purchased by Amaya Gaming.
It is likely that PokerStars’ actions after Black Friday combined with its landmark settlement with the United States in 2012 played a large role in the relatively light sentence for Schienberg.
PokerStars founder Isai Scheinberg sentenced today in New York to time served and a $30,000 fine.
That’s pretty good for running an unlawful online gambling business that netted him, oh, somewhere north of $30,000.
— Norman Chad (@NormanChad) September 23, 2020
As part of the deal, PokerStars acquired Full Tilt Poker for $731 million, which included $547 million forfeited to the United States government to help play Full Tilt Poker players. Leftover funds were also eventually used to pay former Absolute Poker and Ultimate Bet players.
PokerStars did not admit to wrongdoing as part of the settlement, opening up the opportunity to allow the online poker room to eventually offer its games in a regulated United States environment.
Schienberg reacts to judgement
Schienberg reacted to the judgment by issuing a statement to Online Poker Report:
I am pleased that Judge Kaplan has determined today not to impose a prison sentence in my case.
PokerStars played an important role in creating today’s global regulated online poker industry by running an honest and transparent business that always treated its players fairly. 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.