The owners of Absolute Poker and UB are not following the lead of Pokerstars and Full Tilt Poker. All four online poker sites had their bank accounts seizured along with their domains by the United States Department of Justice. Absolute Poker and UB have decided not to agree with any offer from the U.S. Department of Justice including the return of player’s money because they are insisting that this seizure on their domain name and bank accounts is illegal.
A spokesperson for Absolute Poker has stated that management is reviewing the offers made by the US government and has retained Blank Rome LLP as United States counsel to provide legal advice. They also have the backing of the Antigua Government if they choose to fight the charges brought against them. The Antigua Government has suggested that Absolute Poker and UB should not concede to the US Government so quickly and wait for the World Trade Organization to intervene.
Pokerstars and Full Tilt Poker have signed an agreement with the US DOJ which includes the use of their domain name for returning players the funds that may be in their player accounts. The US DOJ is monitoring the sites so that no new players are registered or deposits taken. Absolute Poker and UB have so far refused to work with the DOJ and are looking for alternative solutions.
Can a government be charged with war crimes, if the war is only one of intimidation?
The U.S. federal Department of Justice isn’t blowing up buses. No one has died. But while Palestinian terrorists can only close down Israeli pizza parlors; the DoJ stopped online poker sites from doing business anywhere in the world – including where poker is 100% legal.
On Friday, April 15, 2011, the DoJ seized the .com names of five of the biggest poker sites. It is not even clear that online poker is illegal in every state and territory of the U.S. But players in countries like England, where it is indisputably legal, also found themselves unable to access their favorite sites.
This is a door the U.S. should never have opened. The next to step through could be an Islamic country, which outlaws alcohol, seizing the worldwide domain names of every retailer and restaurant that advertises beer or wine.
And the DoJ also effectively froze the money deposited by hundreds of thousands of American players, who had done nothing wrong. There is no federal law against merely playing poker. Half the states do have mostly ancient laws on the books making it a crime, sometimes, to make a bet. But in the other half, it is not a crime to even bet with an illegal operation.
This is true of New York, where the DoJ’s legal actions were filed. The criminal indictments charged the online operators under a statute, 18 U.S.C. §1955, which makes it a federal felony to be a large business in violation of state anti-gambling laws. The only state laws cited are New York’s Penal Law 225 and 225.05, which clearly do not apply to mere poker players.
Black Friday saw widespread panic among players, and the threat of a worldwide bank run on online gaming operators. By Wednesday, the DoJ appeared to realize it had way overstepped its power, and that it is losing the public relations war.
On April 20, Preet Bharara, the U.S. Attorney in Manhattan who had seized the domain names, announced that an agreement had been reached with PokerStars and Full Tilt Poker. Technically, the .com names remain seized. But the DoJ will now permit the companies to operate money games outside of the U.S., which they always had the legal right to do anyway. American players can also go to the .com sites and get their deposits back.
Bharara issued the following statement: “No individual player accounts were ever frozen or restrained, and each implicated poker company has at all times been free to reimburse any player’s deposited funds.”
Technically true, but misleading. Exactly how were players supposed to get their money, when they could not log on to the seized .com sites? Did Bharara tell the operators they could refund players’ deposits, and how they were suppose to do that? Even today the DoJ has not worked out all the details on what it will allow.
Notice that the announced agreement is only with PokerStars and Full-Tilt. Those companies have licenses and approvals by foreign jurisdictions, including France, Italy and Alderney, which they want to protect. They also would like to someday return to the U.S., once the laws are changed. Absolute is licensed by the Kahnawake tribe in Canada and has always taken the position that it does not have to be overly concerned with the laws of Canada, the U.S., or any other jurisdiction. So it is standing tough. In fact, it is still accepting money players from the U.S.
Winners and losers:
Traffic on the seized sites seems to be down, but not precipitously. Americans must have quickly discovered that they can sign up to the same operators through .eu and .uk sites.
Hit as hard have been media outlets which depend on poker ads. No reason to spend money on PokerStars.net commercials if players can’t be converted onto PokerStars.com. That is probably the real reason for ESPN cancelling so many poker TV shows.
Traffic on rival sites that continue to take bets from the U.S. have increased, but not spectacularly. Players do have their favorites, and don’t necessarily trust the other sites. Plus, their money is still tied up.
Purely European companies, like Playtech, and the not-quite Internet poker sites are also doing well. PurePlay.com, a subscription poker site with free alternative means of entry, based in San Francisco, received $2.8 million in new funding after Black Friday. And Atlantis Internet Group Corporation, which is setting up legal closed-circuit computer linked poker on Indian land, saw its stock rise 400% in the last few days.
Brick and mortar card clubs and casino cardrooms have seen modest increases in the number of poker players. The first weekend after the online players’ funds are freed up will show whether the crackdown on Internet competition can help save Atlantic City.
In the long run it will probably be the largest landbased operators, like Caesars, and online sites which had already pulled out of the U.S., led by Bwin-Party and 888, that will be the biggest winners. The indictments reinforce proponents’ arguments that the states should legalize intra-state poker, so that the operators and their computers and payments processors will be physically here to be taxed and regulated.
The major obstacle is political. The same political and economic forces that allow us to even talk about legalizing Internet poker also stand in its way. There is so much legal gambling in the U.S. that allowing one more form is no big deal. But that also means there are well-established local operators who will fight to prevent outsiders from coming in to create new competition.
Each state will create its own formula for extracting as much money as possible without alienating existing local operators. Atlantic City casinos companies have enough money that there is no reason to open New Jersey online gambling to foreign bidders. In California there will be at least three licenses: one for a consortium of the state’s card clubs, the same for its gaming tribes, and at least one for an outside operator who can bring $200 million cash up front to the table.
Nevada casinos may want a federal law to prevent them having to compete against politically powerful local operators in 50 different states; 51 counting the District of Columbia. But the recent indictments and stalemates in Congress prove that the states are where the action is, and is going to be, until well after the 2012 election.
Yesterday was quite the day for the online poker world with the US Department of Justice seizing the domains of the world’s largest online poker sites. There’s been many reactions and speculation as to what’s happening and what’s going to happen in the coming days. Many are angry that the US continues to go after online poker. This is not the case here; this isn’t about whether online poker is legal or whether or not it’s a game of skill or a game of luck. This is about money laundering and tax evasion that took place through the websites.
After reading the Civil Complaint it became apparent that the US Government had every right to do what they did. Here’s an excerpt that helps to better explain the crime:
“For example, defendants ISAI SCHEINBERG and PAUL TATE of PokerStars, RAYMOND BITAR and NELSON BURTNICK of Full Tilt Poker, and SCOTT TOM and BRENT BECKLEY of Absolute Poker, arranged for the money received from U.S. gamblers to be disguised as payments to hundreds of non-existent online merchants purporting to sell merchandise such as jewelry and golf balls.”
“By late 2009, after U.S. banks and financial institutions detected and shut down multiple fraudulent bank accounts used by the Poker Companies, CHEINBERG and BITAR developed a new processing strategy that would not involve lying to banks. PokerStars, Full Tilt Poker, and their payment processors persuaded the principals of a few small, local banks facing financial difficulties to engage in such processing in return for multi-million dollar investments in the banks. For example, in September 2009, ELIE and others approached defendant JOHN CAMPOS, the Vice Chairman of the Board and part owner of SunFirst Bank, a small, private bank based in Saint George, Utah, about processing Internet poker transactions. While expressing “trepidations,” CAMPOS allegedly agreed to process gambling transactions in return for a $10 million investment in SunFirst by ELIE and an associate, which would give them a more than 30% ownership stake in the bank. CAMPOS also requested and received a $20,000 “bonus” for his assistance. In an e-mail, one of ELIE’s associates boasted that they had “purchased” SunFirst and that they “were looking to purchase” “a grand total of 3 or 4 banks” to process payments.”
They knowingly bought banks or bribed banks in order to circumvent UIGEA. We agree that UIGEA is ambiguous but it is still a law.
Andrew Feldman of ESPN has reported that the US DOJ is trying to shut down the sites globally. We don’t know how this can be done. Full Tilt Poker and Pokerstars operate in a jurisdiction where online poker is legal. They are both licensed in countries like the France and the UK. We suspect the only way this could happen is if the US DOJ has proof of money laundering or tax evasion in those countries and is sharing this information with countries world wide.
At Holdem Poker Chat we’re being optimistic about the whole situation. This is in fact exactly what the Las Vegas casinos wanted. They are now on a level playing field with online poker and can now make a strong case for legalizing and regulating online poker in the USA. In fact we expect this to happen rather quickly now that their competition is out of the way.
Black Friday Recap
Pokerstars, Full Tilt Poker, Absolute Poker and UB we’re named in an indictment by the U.S. Department of Justice and their domains were seized and replaced with a warning page.
PokerStars has suspended real money play for US players. Players can log in but can’t play at the real money tables. The PokerStars website can be accessed by going to pokerstars.eu and player support is available at support@pokerstars.eu.
Steve Wynn has cancelled his partnership with Pokerstars for PokerstarsWynn.com
Pokerstars has already lost 25% of its traffic.
PokerStars dropped some of their guarantees, including Sunday Storm (from 300K to 200K) and Sunday Million (from 1.5M to 1M)
Full Tilt Poker has left the US market until further notice, and is ensuring that the money is safe with them. Players may send inquiries to support@fulltiltpoker.co.uk.
Fertitta (Stations Casinos) has ended their partnership with Full Tilt Poker
Full Tilt Poker will lose 40+% of its traffic.
Full Tilt Poker has Cancelled the Onyx Cup
Sources have told poker news organizations that UB and Absolute Poker will likely stay in the US.
As of this morning April 16, 2011 players could still play real money games on both sites.
We do not at this time think that this will trickle down to other online poker sites that accept US players like those on the Merge and Cake networks. There are many rumors flying around that other sites including sportsbooks will be next but those are just rumors. Again, this is about money laundering and tax evasion. Not about whether poker is legal or not. We’re slowly updating our review pages to reflect the changes. If you’re looking for a new place to play, we suggest you try Lock Poker where we’ve secured a very nice bonus for all new players.
Stay tuned to Holdem Poker Chat for all the latest Online Poker News.
Full Tilt Poker just released a statement regarding Friday’s indictment by the U.S. Department of Justice announcing that it is suspending real money play for USA players until the situation is resolved.
Full Tilt Poker™ Supports Poker Players And Its Chief Executive
Dublin Ireland (April 15, 2011)- Full Tilt Poker is saddened by today’s charges against its CEO Raymond Bitar and offers its full support to Mr. Bitar and Nelson Burtnick.
Online poker is a game of skill enjoyed by tens of millions of people in the United States and across the world. And, Full Tilt Poker remains as committed as ever to preserving the rights of those players to play the game they love online.
Mr. Bitar and Full Tilt Poker believe online poker is legal – a position also taken by some of the best legal minds in the United States. Full Tilt Poker is, and has always been committed to preserving the integrity of the game and abiding by the law.
“I am surprised and disappointed by the government’s decision to bring these charges. I look forward to Mr. Burtnick’s and my exoneration,” said Mr. Bitar.
Unfortunately, as a result of this action, Full Tilt Poker has decided that it must suspend “real money” play in the United States until this case is resolved. However, Full Tilt Poker will continue to provide peer-to-peer online poker services outside of the United States.
The House Financial Services Committee approved a bill Wednesday that would license and regulate online gambling in the United States, in a 41-22-1 vote.
The Security and Accountability For Every Port Act of 2006 (SAFE Port Act) was an Act of Congress covering port security online gambling measure that was added at the last moment. The House and Senate passed the conference report on September 30, 2006, and President Bush signed the Act into law on October 13, 2006.
Since 2008, Committee Chairman, Barney Frank (D-Mass) has been fighting and lobbying to halt the Unlawful Internet Gambling Enforcement Act. Frank’s first attempt failed to get out of Committee on a 32-32 vote. A second bill passed Committee on a 30-19 to vote, but was never voted on by the full House of Representatives.
This year, Rep. Frank introduced the Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2267). This bill drew a large amount of support by the Democrats and almost half of the votes by the Republicans. Thirty-four Democrats voted for the bill and four voted against it, while seven Republicans voted for the bill and 18 voting against it. Several members of the committee failed to even vote.
Along with Frank, two California Representatives, Republican John Campbell and Democrat Brad Sherman, took part in amending the bill Wednesday and ensuring its passage.
Campbell created a substantial amendment which called for changes on both the administrative and consumer protection sides of the proposed legislation. Campbell’s amendment gives “states and tribal authorities parallel authority to administer licenses and enforce these regulations.” Campbell’s amendment also requires licensees to maintain all online gambling facilities targeting U.S. residents within in the United States.
Campbell added additional protections for consumer by requiring the odds of winning be posted for each game. His amendment also requires loss limits for players in addition to age and location verification.
Sherman’s amendments added language that prevents bad “actors” from obtaining licenses, gives states a full legislative session to opt out of the federal plan and specified that that in order to get a license, the majority of that company’s job had to be in the U.S.
Other amendments that passed include bans on inappropriate advertising, bans on ads targeting minors and the frequent testing of minor protection systems.
“The fact is, online poker is not going away,” said former Sen. Alfonse D’Amato, chairman of the Poker Players Alliance, in a statement. “Congress has a choice – it can license and regulate it to provide government oversight and consumer protections, or our lawmakers can stick their heads in the sand, ignore it, and leave consumers to play on non-U.S. regulated websites in all 50 states. I’m glad the Financial Services Committee today overwhelmingly chose to act and protect Americans as well as preserve the fundamental freedoms of adults and the Internet.”
There are still several hurdles that need to cleared before it can become law. First, the full House needs to vote on it. Since the house breaks on August 9th, it is unlikely the vote is going to happen. It is also unlikely the voting will occur during the lame-duck session of Congress after the November elections. The bottom line is that this means it has to pass a full floor vote between Sept. 7 and Oct. 8. In order for a full vote to happen, the Democratic leadership in the House, led by Speaker Nancy Pelosi (D-Calif.), needs to schedule it.
If the House passes the bill, then it needs to be taken up by the Senate. If it is passed by both the House and the Senate, then it will need to be signed by President Obama.
It is important for all of this to happen this year, before the end of the legislative session. If it doesn’t, the process will have to start all over again next year. Then it will have to be presented when the makeup of both the House and the Senate will be different.
A bitter sweet victory for online gamblers, but a continuous uphill struggle and fight for those Representatives fighting for our rights.
The owners of Absolute Poker and UB are not following the lead of Pokerstars and Full Tilt Poker. All four online poker sites had their bank accounts seizured along with their domains by the United States Department of Justice. Absolute Poker and UB have decided not to agree with any offer from the U.S. Department of Justice including the return of player’s money because they are insisting that this seizure on their domain name and bank accounts is illegal.
Can a government be charged with war crimes, if the war is only one of intimidation?
Yesterday was quite the day for the online poker world with the 
Full Tilt Poker