PokerStars faces Lawsuit after Refusing to Pay Online Poker Winnings

Online poker pro suing PokerStars for $692k SCOOP tournament win; says he was in Canada, not US.

What’s the biggest difference between live and online poker? No, it’s not the ability to read opponents, or ease of pulling off a successful bluff. It’s the way winners get paid. At a live event, you collect your check on the way out the door. In an online poker tournament, you must rely on the operator to deposit the winnings in your account balance.

PokerStars is largest, and arguably most respected and trustworthy poker operator in the world. For more than 15 years, it’s seen exponential growth in players, tournaments and monumental prize pools. Even when the US cracked down on them and other poker sites in 2011 for accepting American players, PokerStars took the high road. The company paid an enormous settlement, and returned hundreds of thousands in funds to players of Full Tilt Poker (which it purchased in doing so).

But now, PokerStars’s integrity is in question, and it’s got a lot of online poker players angry. None more so than American poker pro Gordon Vayo, who’s suing the Canadian iGaming juggernaut for failure to pay nearly $700,000 in tournament winnings.

US Online Poker Pro Sues PokerStars

Gordon Vayo is a professional live and online poker player from Illinois, USA. In 2016, he placed second in the World Series of Poker Main Event for $4.66 million. Then in 2017, he placed first in Event #1, $1,050 NLHE, in PokerStars famous Spring Championship of Online Poker (SCOOP) tournament series. That win should have earned him $692,000. But it didn’t…

Instead of receiving the 6-figure payout in his account, Vayo got a message that his winnings were frozen pending investigation of his location during the event. PokerStars requested Vayo supply them with evidence that he was not in the US at the time of the tournament.

According to a lawsuit filed by Gordon Vayo on April 7, 2018, the poker pro supplied that evidence. Yet PokerStars continues to withhold the winnings.

VPN Failure Costs Vayo $692,000

PokerStars claims that Vayo may very well have been in the US, because he was using a virtual private network (VPN) during the SCOOP event. VPNs are often used to mask a persons true location by connecting to a proxy server elsewhere in the world. Thus the server a player is connecting to – in this case PokerStars – is made to believe the player is in the location of proxy server.

PokerStars’s servers were able to verify that Vayo was using a VPN, but were not able to verify that the SCOOP tournament winner wasn’t in the US. Vayo is adamant that he was in Canada at the time, and says that using a VPN isn’t out of the ordinary. Even players in legal geographic locations sometimes use a VPN for security reasons.

Vayo claims that his VPN malfunctioned during the online poker tournament, and that’s why PokerStars’ geolocation system was unable to verify his Canadian position. That may very well be… but if it can’t be proven beyond a doubt, it’s a gamble PokerStars wasn’t willing to take.

Catch 22 for Canadian Online Poker Room

Realistically, PokerStars had no choice but to freeze the online poker pro’s winnings. If the company pays out the $692,000, it could face tremendous retribution from the US government for potentially allowing someone in the US (outside of New Jersey) to access its real money poker games. I’m sure most of you will remember the catastrophic fallout of April 15, 2011 (i.e. the Black Friday of Online Poker).

However, by refusing to take that risk, PokerStars’ integrity is being dragged through the mud by this lawsuit. And I if Vayo wins the case, the poker room’s reputation will surely suffer. Especially since Vayo is accusing them of a lot more than erroneous withholding of winnings. The lawsuit also claim a “pattern and practice of conduct intended to defraud users”, “retroactively” verifying geolocations of winners, and using the US law as a “whipsaw to maximize its profits”.