PokerStars Featured in Paradise Papers (Part 1)
Most poker players, enthusiasts and fans had no idea that PokerStars was mentioned in the Paradise Papers. The revelations about PokerStars were quite stunning when they first emerged in early November. But between now and then, few poker media outlets have touched the topic at all, much less the information about communications between PokerStars and law firm Appleby in the lead-up to Black Friday. Flushdraw was one of very few poker-centric sites that dedicated articles to the subject by latter devoting research and providing background information.
PokerStars remains the bread and butter of many poker news sites and even organizations like the Poker Players Alliance. Ironically, it was the Paradise Papers that actually revealed the intimate nature of the relationship between PokerNews and PokerStars, and PokerNews only then wrote about the connection to deny that it impacts the news produced on the site.
Explaining the Paradise Papers
Leaked documents are the preferred method of whistleblowing in today’s world. The Paradise Papers were just that but in grand form.
A total of 13.4 million electronic documents from offshore law firm Appleby escaped from confidentiality when they were leaked to two German reporters at Süddeutsche Zeitung newspaper. They then shared the information with the International Consortium of Investigative Journalists (ICIJ) and a network of other journalists in order to sort through the massive amount of data. Appleby told ICIJ the documents were stolen in a cyberattack in 2016 and denied all allegations of improper transactions and dealings.
The first round of details was made public on November 5, 2017, and related to companies registered in 19 tax jurisdictions. From the investigations, business moguls and politicians were among the 120,000-plus suddenly in the spotlight for potential tax evasion, money laundering, and illegal or improper business dealings featuring offshore bank accounts and financial transactions. The name of the document leak – Paradise Papers – was taken from the fact that many of Appleby’s clients used the firm to store money in tax havens or tax “paradises.”
Initial PokerStars-Related Reports
One of the most interesting pieces of news in the Paradise Papers to many in the poker community related to PokerNews and its true relationship with PokerStars. Rumors have lived long and prospered that PokerStars owned all or a significant part of PokerNews and its parent company, iBus Media, but no one at the company ever confirmed it on the record.
PokerNews actually got ahead of the information release by writing its own news story on October 30, approximately one week before a portion of the Paradise Papers scoop was exposed. Coincidentally or not, PokerNews wrote a piece on its website entitled “iBus Media Management Explains Company’s Growth and Confirms Ownership Rumors.” It started by touting its growing revenue and staff, as well as a possible acquisition, before writing, “iBus has always been run as an independent business but as a result of the new strategy we felt it was the appropriate time to ensure there was clarity around the ownership of the business.” The piece then admitted that though European Parliament member Antanas Guoga, better known in poker circles as Tony G, founded the business, he sold equity in the company over time to Stars Group “who currently own a large majority of the business.” The relationship between Stars Group, the parent company of PokerStars, and PokerNews was described as “arms-length.”
The Paradise Papers then revealed that information about Guoga as well as new information about PokerStars co-founder Mark Scheinberg as a shareholder of iBus Media.
Importance of PokerNews-PokerStars Disclosure
Though it was widely assumed that PokerStars had some type of influence over PokerNews, the confirmation was important.
PokerNews claimed in its disclosure, “PokerStars and its associated brands currently represent less than 5% of iBus’s affiliate revenues.” However, PokerNews was a party to many partnerships with PokerStars to cover its tournaments around the world and often broke news stories about PokerStars before other media outlets received the information.
Years of following PokerNews’ coverage of industry happenings shows that negative news about PokerStars was rarely reported on the PokerNews website, and when it was covered, it was balanced with a favorable response from PokerStars. Some negative stories were never covered, such as the release of some sponsored pros from their contracts under contentious terms.
The editorial staff of PokerStars has changed over the years, so it would be difficult to get an accurate statement from the company’s current staff regarding any bias – instructed by PokerStars or otherwise – or efforts to keep PokerStars in a favorable light.
It should concern all in the business of poker, however, that the most prominent and popular news source within the poker community was selling control of its shares to the largest online poker company in the world over a period of time, and that PokerStars now owns a majority of the business. And the most concerning part of it all was the lack of transparency through the years.
Check back for the second part of this article tomorrow, which will go into other revelations of the Paradise Papers regarding Black Friday.
