PokerStars Founder Isai Scheinberg Given Minimal Sentence for Black Friday Crimes

Isai Scheinberg

The largest criminal case in online poker history has reached a conclusion after nearly a decade. PokerStars founder Isai Scheinberg pled guilty to a single charge back in March and sentencing was on Wednesday, September 23rd.

Despite being at large for almost a decade, the man deemed “Public Enemy #1” in the Black Friday saga received a virtual slap on the wrist. Scheinberg will not receive jail time and his fine is a mere $30,000 for his actions.

Isai Scheinberg Sentenced to Time Served and $30k

For those that have been following online gambling globally, you probably heard of Black Friday in the United States. On April 15, 2011, the world’s three largest poker sites at the time were effectively shut down in the United States, and 11 defendants indicted on various illegal gambling charges.

Over the years, all of those indicted were brought to justice with the exception of PokerStars founder Isai Scheinberg. Scheinberg left the United States and never returned. That was the case for years.

Late last year, Scheinberg went to Switzerland and the US government began extradition procedures. Scheinberg was taken into custody but agreed to return to the United States to finally face charges.

In March of this year, Scheinberg pled guilty to a single charge of operating an illegal gambling business. That plea normally carries a sentence of up to two years. However, that was nowhere near the sentence given.

On Wednesday, September, 23rd, a federal judge in New York sentenced Scheinberg to time served and a mere $30,000 fine. This surprising show of leniency came in part due to the acts of PokerStars following the indictment.

PokerStars Saves the Day Yet Again

Judge Lewis A. Kaplan was the judge acting over sentencing in the case. Scheinberg’s lawyers spoke on the actions of PokerStars following the Black Friday indictments. The company repaid players who were shorted by both Full Tilt Poker and Absolute Poker.

Full Tilt Poker effectively shut down following Black Friday. The company squandered $400 million in play funds and didn’t have 10% of those funds at the time of the Black Friday shutdown. Absolute Poker went bankrupt and didn’t have the funds to pay players.

PokerStars as a company came to a settlement with the US government and purchased Full Tilt Poker. They also agreed to repay players from Full Tilt Poker. After those payments were made, remaining settlement funds were paid to Absolute Poker players.

Scheinberg also read a statement during the sentencing stating that he has always strove to do good in the community and that his felony conviction will haunt him for the rest of his life.

Ultimately, Judge Kaplan issued a sentence of time served and the minuscule fine. Kaplan told Scheinberg, “I don’t condone what you did but the world is made of fallible people. It was a big mistake but should not ruin what remains of your life.”

The fine was particularly lenient considering the seriousness of the matter. Scheinberg has sold PokerStars since the Black Friday saga began and some felt that the government would try and set an example with him. Instead, it appears that they felt he’s paid enough already.

Nothing Has Changed at Federal Level For Online Poker

While the landscape of online gambling has changed in the United States since Black Friday, online gambling still is not legal at the federal level. Online poker and online gambling can become legal at the state level, but the government has yet to pass laws to legalize either activity at the federal levels.

As such, US citizens are largely in a gray area. Online gambling is legal in a handful of states, but in the other states, a company can be prosecuted for operating an online gambling business. This is a bit different than Australia which only prosecutes companies within its borders.

The US government spent a lot of time and energy tracking down the defendants on Black Friday. However, it only pushed out the largest online poker sites. There are still many sites that operate despite US law. Similar to Australia, the US government should investigate legalizing online gambling across the country to provide additional jobs and tax revenue to states.