Tribe has $10 million deal with poker website developer
The Oklahoma-based Iowa Tribe has a deal to invest $10 million in a Florida software company for the launch of an international gaming website.
Pokertribe.com, touted as the first online gaming venture owned by an Indian tribe, was initially supposed to launch in August, but was recently delayed a second time. The tribe now says the website will offer real-money poker play beginning in early 2017.
The Perkins-based Iowa Tribe, which has about 800 enrolled members, has an agreement to pay $10 million for a 51 percent ownership stake in software developer Universal Entertainment Group's gaming assets, entrepreneur Fereidoun "Fred" Khalilian, a consultant for the group, said in an email.
In a phone interview, Iowa Tribe Chairman Bobby Walkup confirmed the $10 million price tag for a majority stake in the company. He declined to disclose further details.
Universal Entertainment Group announced a deal in May for World Poker Fund Holdings Inc., to purchase the other 49 percent stake in the software company, for $8.9 million, but that deal has since fallen through.
World Poker Fund is a California-based social gaming company that trades its stock on the over-the-counter market. According to regulatory filings, major shareholders in World Poker Fund include Justin Bieber, former boxer Floyd Mayweather, and the rappers Soulja Boy and Tyga.
World Poker Fund said in a regulatory filing in September that it chose "not to move forward on the funding or to close the transaction due to further due diligence."
World Poker Fund did not respond to requests for further explanation.
Universal Entertainment Group and the Iowa Tribe are in the final stages of applying for a gaming license in the Isle of Man in the British Isles, and the complexities of the process have slowed the launch of the website, Walkup said.
Despite the delays, Walkup is confident Pokertribe.com will be a financial boon to the small tribe, he said.
"I don't envy some of the tribes coming behind us that will have to do this," Walkup said. "There are a lot of steps and pieces to the puzzle."
A gaming license from the tiny Isle of Man, in the Irish Sea, will allow Pokertribe.com to offer online gambling in dozens of foreign countries, Khalilian said. The Isle of Man is a British dependency, but has its own government. The island is known for its gambling- and tax-friendly laws and has become a haven for online gambling operations over the past few years.
Khalilian said he wants to make sure Pokertribe.com works properly before it launches to the public.
Christina Fallin, daughter of Oklahoma Gov. Mary Fallin, acts as a consultant for Universal Entertainment Group, working to help ink deals with air carriers to offer in-flight gaming via Pokertribe.com, Khalilian said.
"We want to make sure that the tribe is going to launch this the right way," Khalilian said. "We don't want it to launch and then it gets shut down."
The Iowa Tribe won an arbitration ruling with the state of Oklahoma in late 2015 that said internet gaming was covered under Oklahoma's tribal gaming compact. However, the gambling website will not be available to Oklahoma residents, under the terms of the compact.
Khalilian has run afoul of the Federal Trade Commission twice for other business ventures.
In the mid-2000s, Khalilian owned a short-lived nightclub with Paris Hilton in Orlando called Club Paris that featured all-pink decor as well as a giant, glitter-covered statue of Tinkerbell — the hotel heiress's pet Chihuahua.
Hilton never made her promised regular appearances at the club and the venue eventually closed.
In July, the FTC mailed 5,970 refund checks for more than $4 million to people "bombarded with illegal robocalls and tricked into paying thousands of dollars for bogus 'extended auto warranties' " from one of Khalilian's previous companies.
The refund checks were the result of a $4.2 million federal court judgment entered against the Khalilian and his company, The Dolce Group Worldwide LLC.
Using the trade name My Car Solutions, Khalilian and the Dolce group bilked customers out of thousands of dollars by claiming the company was affiliated with car dealers and manufacturers and selling them fake extended car warranties, the FTC said in a news release announcing the settlement payments in July.
Khalilian is banned from telemarketing or from "making any misrepresentations or omissions when selling any goods or services" as part of the final court order in the Dolce Group Worldwide case, according to the FTC.
In 2000, two travel companies run by Khalilian, Leisure Time Marketing Inc. and Discovery Rental Inc., were the subject of an FTC enforcement action.
According to the FTC's complaint, the companies promised consumers free round-trip airline tickets to Hawaii or Mexico to lure them to purchase vacation packages. The companies allegedly misrepresented the cost of the vacation and failed to disclose participants had to attend timeshare sales presentations as part of the packages.
As part of the final order in the case, Khalilian was banned from telemarketing any more vacation travel packages, according to court documents.
The Concho-based Cheyenne and Arapaho Tribes had a previous deal with Universal Entertainment Group to launch the similarly named pokertribes.com website. The tribes paid the software developer $9.5 million to develop pokertribes.com but the website never launched and was mired in litigation with the U.S. Department of the Interior.
In 2014, Cheyenne and Arapaho Gov. Eddie Hamilton said the tribes would abandon the pokertribes.com venture, citing a “shift in business and tribal strategy and philosophy.”
Hamilton did not respond to an interview request.
In the meantime, Universal Entertainment Group is looking for an "international female spokesperson" and model to help promote Pokertribe.com, according to its website.
"She needs to be a '10' and 'free to travel worldwide,' " according to a job posting on the Universal Entertainment Group website.