Universal Entertainment Group Sued by Former Tribal Business Partners for Alleged Fraud

Posted on: October 3, 2017, 06:40h. 

Last updated on: October 3, 2017, 06:16h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Last week, the Iowa Tribe of Oklahoma received a license from the Isle of Man Gambling Supervision Committee for its PokerTribe.com website, the final stage in its quest to become the first tribal operator to offer real-money online poker to players outside the US, from its sovereign land in Oklahoma.

In the same week, its software provider and partner on the project, Universal Entertainment Group (UEG), was sued by two other tribes for allegedly “cheating” them out of $13 million.

Plaintiffs the Cheyenne and Arapaho Tribes of Oklahoma claim that UEG (a company unrelated to the Japanese casino equipment and pachinko giant Universal Entertainment) unlawfully extracted millions from their people when the three parties were engaged in an almost identical project in 2014.

When Two Tribes Go to War…

The Cheyenne and Arapaho partnered with UEG on a project that was to be called PokerTribes.com (note plural), a partnership that was, according to the suit, marked by “deceit, greed and utter disregard for the laws and economic well-being of the tribes.”

The state of Oklahoma ultimately agreed that the tribes’ plan to offer poker internationally did not violate state law or the tribes’ gambling compact with the state, but the feds blocked it.

A lawsuit launched by the tribes to challenge the Department of the Interior’s decision was ultimately abandoned, along with the entire project, on the election of a new tribal leader.

The successor to the project, the Iowa tribe, subsequently fought for, and ultimately received, the necessary federal approval.

“Egg on Face”

The lawsuit, filed by Eddie Hamilton, the Cheyenne and Arapaho tribal leader whose election spelled the end of the PokerTribes project, asserts that UEG CEO Fereidoun “Fred” Khalilian has no right to sell software to the tribes because it was owned by someone else.

Khalilian was sued by his former business partner to that effect, although the ruling was subsequently overturned.

“We continue to aggressively work with federal regulators and law enforcement authorities to bring about the indictment of those who have taken advantage of our tribes and misused our tribes’ gaming revenues,” Hamilton said.

But Khalilian told the Oklahoman newspaper that Hamilton was a “sore loser” who had “egg on his face.”

Brian Foster, former head of gaming operations for the Cheyenne and Arapaho, who is also named in the lawsuit, claimed it was “politically motivated.”

“It’s unfortunate they didn’t stick with [PokerTribes.com]. They would have done very well,” Foster said.