PokerStars' Founder Isai Scheinberg Avoids U.S. Prison

Isai Scheinberg, the founder of the international iGaming giant, PokerStars, will not have to go to prison. 

That good news was delivered by Judge Lewis A. Kaplan. Scheinberg's age and effective plea bargain seemed to be responsible for his avoiding jail time. 

The Saga of PokerStars in the U.S.

Although PokerStars is an internationally-known and legitimate business, it was not welcome in the U.S. Under Bush and Cheney, the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) targeted many forms of online gambling, including poker.

But PokerStars was one of the companies that continued to operate in the U.S. 

And the federal government cracked down on them. 


Who was indicted?

The U.S. issued a document and went after 3 companies: PokerStars, Full Tilt, and Absolute.

But they also went after the individuals at the heads of these companies. The U.S. indicted 11 executives: Scheinberg, Raymond Bitar, Scott Tom, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, Chad Elie and John Campos.

This 201-indictment is known as Black Friday. And it made clear how seriously the U.S. takes what it regards as illegal, offshore companies. 

Scheinberg's Arrest and Plea

Scheinberg was arrested in Switzerland in June 2019. Then in January he was extradited to the U.S. 

He was 74 years-old when he first appeared before the judge in March 2020. 

Part of the reason why Scheinberg was able to avoid prison was PokerStar's assuming the financial burden of Full Tilt Poker’s debts. These were considerable, including $184 million owed to non-US players. 

Fine and Punishment

 Scheinberg was fined $300,000. The time he would have served was viewed as already served since his 2011 indictment.

Isai Scheinberg's commentary

In response to the ruling, Scheinberg said, “I am pleased that Judge Kaplan has determined today not to impose a prison sentence in my case."

He then went on to defend PokerStar's treatment of its players: "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 US, 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.”

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