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Isai Scheinberg: Founder of PokerStars

Isai Scheinberg is the founder of PokerStars, which is considered today to be the largest online poker site in the world. Along with other members of his family, he holds a 75% share of PokerStars and is still involved with the company currently. He lives in the Isle of Man,  located in the Irish Sea,  where the company headquarters are located.

Not a huge amount is known about Scheinberg as he is intensely private, and he doesn’t give interviews to the media. His propensity for privacy is so intense that when PokerStars published an account of its history, to mark its 10th anniversary, he wasn’t mentioned once. Below we have provided a brief bio of Scheinberg based on the information that’s available now.

We have also provided a complete history of PokerStars.

About Isai Scheinberg

Scheinberg was born in 1946 or 1947 and was raised in Lithuania. He’s an Israeli-Canadian and is fluent in Hebrew. He graduated from Moscow State University with a master’s degree in mathematics and went on to serve in the Israeli Defense Forces. After his service in the military, he worked for IBM in Israel before moving to the company’s Canadian office.

He settled in the Richmond Hill area where others believe he spent a portion of his free time playing poker. It has also been said that he sometimes found himself up against Daniel Negreanu, a well-known poker professional and part of Team PokerStars. In 1996 Scheinberg achieved a cash-in at the World Series of Poker in one event. It’s possible that his love of playing poker was a small part of his inspiration for launching an online poker room.

PokerStars Beginnings

Towards the end of the 1990s Scheinberg began developing his idea for a poker site. It was around this time that internet based gambling was starting to take off and Scheinberg thought he could create something better than all other early poker sites. He began to assemble a team of programmers, some that he had worked with at IBM, and tried to recruit people that were knowledgeable about poker.

At some point in 2000 he sent an email to Terrence Chan who was at the time a student. Scheinberg had found him through an online discussion group, rec.gambling.poker, of which he was a keen reader. Impressed with the poker knowledge Chan showed, Scheinberg asked him to serve as a consultant. Chan got involved and helped the programmers to develop the poker software. According to Chan, Scheinberg was absolutely convinced that with world class software and a high standard of customer service, he could be successful.

Scheinberg also recruited his son and put him in charge of the office he opened in Costa Rica. He had chosen this location due its gambling friendly laws. A company, Rational Enterprises, was formed to operate the new poker site and in 2001 PokerStars was launched. It soon made an impact and people were impressed with the reliability of the software and the fact it appeared to be geared towards more serious players.

Originally customer service was outsourced, but Scheinberg soon made the decision to bring it in house. He hired a number of people to answer questions from customers, and deal with complaints, but only one of them had any real knowledge of poker. It was down to Chan to train them. The in-house customer service gave PokerStars an edge over its competitors that were frequently slow to respond to customers.

The Growth of PokerStars

PokerStars experienced significant growth over the following years and in 2005 Scheinberg relocated company headquarters to the Isle of Man. He began to split his time between there and Canada. By 2006 PokerStars was the second largest poker site behind PartyPoker, and a flotation on the stock market was planned. Then the Unlawful Internet Gaming Enforcement Act (UIGEA) was passed in the United States. This made it illegal for banks to process transactions from US residents if they were related to online gambling.

Many gambling sites, including PartyPoker, pulled out of the US market following the UIGEA. However, Scheinburg’s legal advisers told him that they didn’t need to change anything. They argued that poker was a game of skill rather than chance, and therefore was not illegal under US law. Scheinberg, although described as a conservative person by former employees, decided not to go ahead with the planned flotation and to continue to operate in America.

PokerStars became the largest poker site as a result of this decision and grew even more over the following 5 years. Scheinburg implemented aggressive marketing and the company expanded in many markets throughout the world, earning him a fortune. However, according to those that have worked with him, he kept a modest demeanor and still spent a lot of time working. He constantly browsed online poker forums to see what was being said about his company, and often made decisions based on what he read.

Criminal Charges Filed

In 2011, the United States seized the domain of PokerStars and filed criminal charges against Scheinberg, alleging bank fraud and money laundering. Paul Tate, a company director involved with payment processing, was also charged. Neither man entered a plea to the charges, but Scheinberg made the decision that it was time to stop serving US players.

The following year, PokerStars reached an agreement with the US Department of Justice. Another poker site that had served the US poker market, Full Tilt Poker, had been unable to repay its American players when it too had its domain seized. PokerStars forfeited over $500 million to allow the reimbursement of these American players and in exchange received the assets of Full Tilt Poker. As part of the settlement, it was agreed that PokerStars should not be restricted in attempts to return to the US market when it becomes regulated.

The criminal charges against Scheinberg remain, but it’s considered unlikely that he will ever face courtroom proceedings as long as he never enters the United States. Under the terms of the settlement reached with the US Department of Justice he isn’t able to serve in a management or director role at PokerStars while he’s still facing charges. At the current time, it’s believed that he consults for the company primarily on matters of technology and when he’s considering entering into new markets.