THE FIGHT: Amaya-Caesars Deal Raises Suitability Questions

During the Global Gaming Expo last week, Amaya Gaming announced a content deal with Caesars Interactive Entertainment. These types of content deals have become commonplace in the world of online real-money gaming, especially as New Jersey prepares to launch a full suite of real-money online games. Many financial analysts have labeled the deal a “big win” for Amaya.

That big win for Amaya could wind up being a big loss for regulatory scrutiny of online gaming. Paul Leggett, the former COO of Tokwiro Enterprises, the company that owned and operated Absolute Poker and UB, has a prominent role at Amaya as the Head of Online Gaming.

Paul Leggett Amaya

Paul Leggett, Amaya Head of Online Gaming

Leggett’s role in the cover-up of the cheating scandals at Absolute and UB has never been satisfactorily explained. He has maintained that Tokwiro inherited the scandals with the acquisition of the troubled sites in 2006 and that he, and Tokwiro as a whole, did everything possible to rectify the problems, satisfy the public and rehabilitate the brands.

Questions have lingered, however, about the extent of the efforts of Leggett and other senior executives to get to the bottom of the scandals. The theory of a massive cover-up perpetrated by Tokwiro executives gained traction this summer with the release of secret recordings from 2008 – long after Tokwiro took over management of the sites and Leggett joined the company, and as the scandals were coming to a head – of conversations among Tokwiro insiders discussing how best to sweep everything under the rug.

While Leggett was not directly implicated in those recordings, several other people at the “C-level” of the two poker sites were, including former UB executive Greg Pierson. Pierson moved on to co-found iovation, an online gaming fraud prevention platform (oh the irony).

iovation’s association with Ultimate Poker, as a subcontractor of CAMS LLC, caused a firestorm of protest in the poker community earlier this year. Those protests led Ultimate Poker to force CAMS to drop iovation, although iovation was dropped as much because it wasn’t licensed in Nevada as because of Pierson’s role as CEO.

To date, the ruckus that’s been raised about Leggett’s role at Amaya has been more muted than the Pierson protests. That may reflect the state of the evidence against each man. With Pierson, the 2008 conversations are a “smoking gun”, directly tying Pierson to the cover-up. No such evidence directly implicates Leggett, but the idea that Leggett, as COO of Tokwiro, was completely isolated from the shenanigans of Pierson, Russ Hamilton and Co. is difficult to swallow.

Insiders at Caesars claim that Leggett has been “vetted” by both the Nevada Gaming Control Board (which confirmed to Pokerfuse back in May that it was reviewing Leggett’s hiring by Amaya) and the New Jersey Division of Gaming Enforcement. There’s no reason to doubt that, as it’s hard to imagine that Caesars would have done the content deal with Amaya if any question remained about Leggett’s suitability in either state.

Still, the fact that Leggett can pass regulatory muster in light of all the questions that remain around his time at Tokwiro puts the integrity of the suitability review process in question. The whole purpose of suitability review is to ferret out answers to the types of murky questions that surround someone like Leggett, in order to ensure the fairness and integrity of games offered by gaming licensees in the future.

Especially in the case of online gaming, the public has good reasons to be wary, given the history of online gaming scandals. Convincing states to enact online gaming legislation will be even more difficult than it already is if the public doesn’t trust the suitability review process.

Maybe Leggett is “above board”. Maybe he’s not. Without a full accounting of the facts and the review process, it’s impossible to know, and as a result questions will continue to surround him. What we do know is that fairness and integrity are keys in THE FIGHT to legalize online poker. Any questionable executive, one that could raise even a hint of impropriety, deserves to be subjected to the harsh light of day or cast out of the industry, no questions asked.

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Kevin McGrady

Legislative and Politics Beat Writer: Kevin McGrady practiced corporate law in New York City for eight years before moving to Las Vegas in 2008 to join the gaming industry. Kevin is a graduate of New York University and Columbia University School of Law.
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