With everything going on in the poker world Finnish Poker Pro Ilari ‘Ziigmund’ Sahamies, PowerPoker Pro, announced recently that his days playing at FullTiltPoker and PokerStars are over.
Since the beginning of 2010, Sahamies has experienced an incredible downswing, losing over $2 million in the past 16 months. Most of this happened at FTP, after which Sahamies moved over to PokerStars under the screen name ‘Ilari Fin’. This change of venue, however, has done little to halt the downswing, and he has been steadily losing there as well.
While it is doubtful that Sahamies is done with poker for good, we can speculate about where he may go next. His home site may not have the nosebleed action that he prefers; where will the Fin go now? There’s only a handful of online poker sites that currently have the high limits that Zigmund likes to play so we should know soon.
As you know on April 15, 2011 “Black Friday” Pokerstars, Full Tilt Poker, Absolute Poker and UB were indicted by the U.S. Department of Justice and therefore left the U.S. market. The traffic stats below show the affect this has had on online poker sites throughout the world.
The big winners so far seem to be the sites that operate on the Merge Poker Network and Bodog Poker which are up 36% in online traffic and Party Poker whose seeing it’s European traffic up 10%. European sites seeing increased traffic is no shocker. Would you feel safe having your money on a poker site that has been accused of bank fraud, money laundering and tax evasion?
From statements just released by PokerStars, it appears that they will start immediately processing US withdrawal requests. “Returning US players’ funds is a top priority for PokerStars and the company can now start the process of returning money to its former US customers.” Holdem Poker Chat cautions that the sheer volume of requests may slow the process and players should probably expect a lengthier process than they are accustomed to. I am sure this is great news for all with substantial portions of their bankrolls on PokerStars.
PokerStars gives a little more info in their comments regarding the recent developments. Right up front they state their innocence and desire for their day in court:
“The company categorically denies the allegations brought by the US Department of Justice on 15th April 2011 and is taking all steps necessary to robustly defend itself, and the two named individuals. Meanwhile, the company has stopped offering real money poker services in the United States.”
They continue by stating that player funds are always kept separate from operating funds.
“All PokerStars player deposits are completely safe. The Isle of Man’s strict licensing laws (similar to other jurisdictions where PokerStars holds licenses) require all funds to be held in accounts that are segregated from company assets. PokerStars has always complied with this requirement and continues to do so. This money is readily available to meet withdrawal demands, indeed the company continues to comply with withdrawal requests from players based outside the US as normal. Outside the U.S., PokerStars continues to operate business as usual.”
Good news for everyone. However, remember that because your government went after a reliable, stand up company like PokerStars, players now no longer get to do business with a company with integrity and class.
UPDATE: Shortly after making this announcement Pokerstars put a stop on all withdrawals. Those who managed to process a withdrawal later had the funds returned to their accounts along with an email stating that Pokerstars was still working on the logistics of cashouts to US players and that players would be notified when they were ready.
In what can only be the result of all the bad press the DoJ has gotten over their ignoring real crime while persecuting poker players, today they announced an agreement with PokerStars and Full Tilt Poker to facilitate the return of funds to US poker players. The long-winded press release is reprinted in its entirety below, but one of the main points it makes is “The agreements allow for PokerStars and Full Tilt Poker to use the pokerstars.com and fulltiltpoker.com domain names to facilitate the withdrawal of U.S. players’ funds held in account with the companies.” I think players should see action this swift as a victory of public opinion and some of the pressure the US Attorneys office of Southern New York has gotten from the public for attacking innocent poker players.
Reaction from Full Tilt Poker and PokerStars will be posted as soon as Holdem Poker Chat gets the news. As of right now, withdrawals are not yet allowed, but I assume the ability needs to be coded into the software still.
UNITED STATES ENTERS DOMAIN-NAME USE AGREEMENTSWITH TWO ONLINE POKER COMPANIES
As Part of Agreements, Use of Domain Names Pokerstars.com andFulltiltpoker.com Will Be Restored to Facilitate Return of U.S.Player Funds
PREET BHARARA, the United States Attorney for theSouthern District of New York, announced today that the UnitedStates entered into domain-name use agreements with PokerStars and Full Tilt Poker, two of three online poker companies named as defendants in an April 15 civil money laundering and forfeiture Complaint (the “Civil Complaint”), alleging bank fraud, wirefraud, money laundering, and illegal gambling offenses. The Complaint, a related Indictment, and a related Restraining Order issued against multiple bank accounts utilized by the companies and their payment processors do not prohibit the companies from refunding players’ money. Nevertheless, this agreement will facilitate the return of money so that players can register their refund requests directly with Pokerstars and Full Tilt Poker.
Manhattan U.S. Attorney PREET BHARARA said: “On April15th, this Office and the FBI took specific legal action against11 individuals who allegedly engaged not merely in the operationof illegal gambling businesses, but in massive wire fraud, bankfraud, and money laundering, despite repeated warnings and clear notice that their conduct was illegal in the United States. 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. In fact, this Office expects the companies to return the money that U.S. players entrusted to them, and we will work with the poker companies to facilitate the return of funds to players, as today’s agreementswith PokerStars and Full Tilt Poker demonstrate.”
Under the terms of the agreements with PokerStars andFull Tilt Poker, the companies agreed that they would not allow for, facilitate, or provide the ability for players located in the United States to engage in playing online poker for “real
money” or any other thing of value. The agreements allow for PokerStars and Full Tilt Poker to use the pokerstars.com and fulltiltpoker.com domain names to facilitate the withdrawal of U.S. players’ funds held in account with the companies. The deposit of funds by U.S. players is expressly prohibited. In addition, the agreements do not prohibit, and, in fact, expressly allow for, PokerStars and Full Tilt Poker to provide for, and facilitate, players outside of the United States to engage in playing online poker for real money. The agreements also require the appointment of an independent Monitor to verify PokerStars’and Full Tilt Poker’s compliance with the agreements. The Government stands to enter the same agreement with Absolute Poker if it so chooses.
An Indictment was unsealed in Manhattan federal courton April 15, 2011 charging eleven defendants, including the founders of the three largest Internet poker companies doing business in the United States – PokerStars, Full Tilt Poker, and Absolute Poker (the “Poker Companies”) – with conspiracy to commit bank and wire fraud, money laundering and illegal gambling offenses. The United States also filed a Civil Complaint against the Poker Companies, their assets, and the assets of several payment processors for the Poker Companies. In addition, a restraining order was issued against multiple bank accounts utilized by the Poker Companies and their payment processors.The Government did not restrain any players’ accounts. Five Internet domain names used by the Poker Companies -pokerstars.com; fulltiltpoker.com; absolutepoker.com; ultimatebet.com; and ub.com – were also seized. As alleged in the Indictment and Civil Complaint, the Poker Companies collectively obtained approximately $3 billion in proceeds as a result of their illegal activities.
Assistant U. S. Attorneys SHARON COHEN LEVIN, MICHAELLOCKARD and JASON COWLEY are in charge of the civil moneylaundering and forfeiture actions, and Assistant U.S. Attorneys ARLO DEVLIN-BROWN and NICOLE FRIEDLANDER are in charge of the criminal case.
March saw Nevada regulators approving a partnership between Caesars and 888, and Wynn announcing a joint venture with PokerStars. Now comes the indictments, three-billion-dollar civil suit and seizures of domain names by the feds. Wynn immediately cancelled his plans. Players were panicked.
Which was, of course, the goal.
If the allegations are true, the operators brought this on themselves, by lying and bribing bank officials. Of course, the prosecutors have the problem of convincing a jury that there is bank fraud when the “victims” are tricked into making millions of dollars.
And will this be the end of Internet poker? Did Prohibition end drinking?
Prohibition created modern organized crime, by outlawing alcoholic beverages. When people want something and it is illegal, organizations will arise to fill the demand. How much more so when the activity, online poker, is not even clearly illegal?
Every action by the U.S. federal government makes it more difficult for it to go after the next operator. The UIGEA, rammed through by the failed politician Bill Frist (R.-TN), can be seen as an anti-consumer-protection law, because it scared all of the publicly traded gaming companies out of the U.S. market. Then prosecutors went after payment processors, making it more difficult for players to find legitimate ways to send their money to betting sites.
Now the feds have seized .com domain names and charged operators with bank fraud. So, gaming sites are switching to .eu and .uk, and cutting off all physical contact with the U.S. Even the present American operators can’t be extradited, so what hope is there for the DoJ to bring future foreign operators here to stand trial?
The Grand Jury has been meeting for at least a year. The criminal indictment against PokerStars, Full Tilt, Absolute and their founders, was unsealed by the U.S. Attorney for New York on April 15, but bore a date-stamp of March 10. So why now?
Besides the Caesars-888 and Wynn-PokerStars agreements, the Nevada Assembly Judiciary Committee recently approved a bill to regulate online poker. And the District of Columbia actually made it legal.
The DoJ has been waging a war of intimidation against Internet gambling for years, successfully scaring players, operators, payment processors and affiliates into abandoning the American market. Lacking the two essentials to any prosecution – a statute that clearly makes the activity illegal and a defendant physically present in the U.S. – the feds have announced showy legal action against easy targets about every other year.
Online poker is not an easy target, since a federal Court of Appeal ruled the Wire Act is limited to bets on sports events. And tricking financial institutions into processing poker payments seems a technicality, especially since the banks made millions without paying a penny in fines.
But getting a bank to agree to process gambling transactions in return for a $10 million investment is an easier case, if true. I can understand approaching a small bank – so small that the officer and part-owner who allegedly arranged the deal, asked for, and received, only $20,000 for his “bonus.” But why would you do this in Utah, of all states?
There are lots of interesting nuggets in the legal papers. The DoJ claims that one-third of the billions of dollars players deposited went to the operators through the rake. That number seems high, but if true, it explains why everyone wants to operate an online poker room, with few expenses and no chance of losing to a lucky gambler.
Most of the activities cited occurred after the passage of the UIGEA. This is a subtle acknowledgment that operators who left the U.S. in 2006 have nothing to fear.
Even if there was a bribe, the feds are still going to have to prove that the poker was illegal. Since the Wire Act won’t work, prosecutors used 18 U.S.C. 1955, which makes it a federal felony if five or more people do more than $2,000 in business a day in violation of state gambling laws. The indictment relies on “New York Penal Law 225 and 225.05 and the laws of other states.” There is a “thank you” to the Washington State Gambling Commission, indicating that the DoJ is probably going to piggyback on that state’s 2006 law outlawing all Internet gambling, as well.
The Washington statute was upheld by the State Supreme Court. Still, there are problems. State laws are presumed not to reach beyond their borders. And even if Internet poker is illegal in that state, it is quite a leap to seize domain names for the entire country and threaten bank accounts in places like Panama.
The only state with a law better than Washington’s is Nevada. But basing this attack on Internet poker on Nevada law would look like it was motivated by the landbased casinos. After all, who are the big winners here?
We will probably see the first attacks on the government’s cases in motions to free the bank accounts, especially those outside the U.S. And the poker operators will undoubtedly fight to get their .com names back for the rest of the world.
The operators will never stand trial. The only U.S. extradition treaty I have found that covers illegal gambling is with Hong Kong. Calling it bank fraud won’t work, since the defendants can show their local courts that it is based on gambling. And it is fundamental to all extraditions that the activity be illegal in both countries. No nation will extradite an individual to be tried for the very activity that that nation licenses.
There may not even be a settlement. The DoJ accepted $405 million from PartyGaming and one of its founders and $100 million from Neteller and its founders. But those companies had already left the U.S. gaming markets. The DoJ will insist on a guilty plea to something, which might kill the operators’ chances of getting licensed when American laws change. And no amount of money will buy them the right to open up again without a change in the law. So what would these operators get from a settlement, other than not having to be worried about getting arrested changing planes?
It will be interesting to watch the fallout. There are a lot of famous American poker players and others who are associated with the indicted operators. They should be getting their affairs in order.
Meanwhile, like a raid by Elliot Ness on breweries and speakeasies during Prohibition, there are now wonderful opportunities for new operators to fill the vacuum. Unless, of course, Americans are actually going to stop playing poker on the Internet.
Pokerstars has finally issued an announcement to last week’s indictment and their leaving the US poker market. Several big name pros have come out and said that players should give the poker sites some time to get things worked out and that they would get their money as soon as possible.
Poker Sites that Accept Players from the USA
“As you may have heard, we have had to suspend real money poker services to people based in the U.S. due to legal developments there.”
“The developments are confined to the U.S. and do not have any impact on your ability to continue using our services. Please be assured player balances are safe. There is no cause for concern. For all customers outside the U.S. it is business as usual.”
“Please be aware that we are currently experiencing a very high volume of emails, so our response times are delayed. We will answer player emails as soon as possible. Thank you for your patience and understanding in this matter.”
April 17, 2011 Update:
Both the PokerStars.net Million Dollar Challenge and PokerStars.net Big Game have been cancelled.
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.
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Pokerstars, world’s largest online poker site, has been very busy in Las Vegas over the last month. After announcing support for the passage of a new Nevada law that would bring online poker to the state and creating 500 new jobs if the law gets passed they have now formed a partnership with Wyn Resorts.
Wynn Resorts Ltd announced that they have entered into a partnership with online poker giant Pokerstars, and that the two companies would work together for the passage of a U.S. legislation that will define illegal internet gambling.
The companies plan to jointly operate a regulated, U.S. online poker site, PokerStarsWynn.com, if they can get the legislation to pass, Wynn said.
“We are convinced that the lack of regulation of internet gaming within the U.S. must change,” Wynn’s Chief Executive Officer Stephen Wynn said in a statement.
Pokerstars is once again reaching a milestone when they deal their 60 Billionth Hand. So, by popular demand… Milestone Hands are back!
There will be 300 regular milestone hands leading up to the 60 Billionth, starting from hand number 59,700,000,000 – and then every millionth hand. You can see the current hand number in the top left corner of the tables you’re playing on.
The milestone hands could hit at any table, any stakes. Every player dealt into any milestone hand will win $50 and an extra $50 for every VIP Player Point (VPP) earned in the previous 50 hands played on that table. Even better, if you win one of the 300 milestone hands Pokerstars will double your prize money.
The player with the winning cards in the 60 Billionth Mega Milestone hand will receive at least $60k. Just make sure you’re playing on the day.
With everything going on in the poker world Finnish Poker Pro Ilari ‘Ziigmund’ Sahamies, PowerPoker Pro, announced recently that his days playing at FullTiltPoker and PokerStars are over.
As you know on April 15, 2011 “Black Friday” Pokerstars, Full Tilt Poker, Absolute Poker and UB were indicted by the U.S. Department of Justice and therefore left the U.S. market. The traffic stats below show the affect this has had on online poker sites throughout the world.
The timing is suspicious.
Yesterday was quite the day for the online poker world with the