According to a report on eGaming Review, some Full Tilt Poker bank accounts have been unfrozen by the US Department of Justice to faciliate player paybacks. According to the report most of the funds seized on April 15th belonged to Full Tilt Poker which is something most in the poker community where beginning to figure out when Full Tilt couldn’t pay players. Over the last couple of weeks rumors had been going around that Full Tilt were trying to sell off part of the company in order to raise money to pay players in the US.
The Full Tilt source explained this resulted from players’ poker balances being credited with money held in bank accounts seized by authorities before Full Tilt itself had been made aware of the seizures. “Because of the broad-sweeping nature of the Black Friday seizures, you had a seizure combined with a backlog and this has resulted in millions which all of a sudden became owed,” the FTP source said.
“Normally Full Tilt would cover that and take that loss, but because all their banks got shut down there was no way of doing that until recently when the government agreed to unfreeze the [Bank of Ireland] account,” he said.
We hope that this means that players will soon get paid and be able to make it to Las Vegas for the WSOP which begins next week.
If you live in the U.S. and you used to play at Full Tilt Poker, before they were forced to shut you out, then you probably got an email from the recently giving an update on their plans and progress returning player funds still held up in FullTilt accounts due to the site’s closure of U.S. operations and freezing of U.S. assets.
On Friday the site issued a statement explaining that all player funds in Tournament Dollars (T$) and tournament tickets have now been converted back into cash in the player’s account. Can the players withdraw that cash yet? is the next question.
And the ansewr is: Not yet.
Full Tilt is converting T$ at a 1:1 ratio, or $1 for every T$1. All unused tournament tickets are being converted back into their full original cash value. Ring game tickets that were unused, either in full or in part, and have expired as of April 15 (“Black Friday” to the online poker community) have been credited as cash for the full value of their remaining unused portion.
Additionally, players’ Iron Man and Black Card statuses will be left as they are, even if the players can’t get back onto the site.
But what Full Tilt is still unable to do is refund any of these monies to players’ hands. That, they say, they’re still working on.
While many players have vociferously expressed their displeasure at Full Tilt Poker’s holdup in getting U.S. player funds refunded, what with Poker Stars having already begun the task, Full Tilt Poker pro Tony G. issued a Tweet requesting players give the site their patience as they are doing the best they can.
Bradley Franzen, one of the 11 people charged last month in the case that shut down U.S. operations for Pokerstars, Full Tilt Poker and Absolute Poker, pleaded guilty Monday in Manhattan federal court, admitting he illegally helped link gambling companies with banks to process millions of dollars.
The charges that he pleaded guilty to were: conspiracy to commit bank fraud; accepting funds in connection with illegal gambling; and conspiracy to commit money laundering.
Franzen said he was contacted in 2009 at his Costa Rica home by an Internet poker company owner who wanted to process checks online. He said he agreed to link online poker companies with banks even though he knew it was illegal.
Quicktender – UseMyWallet issued the following press release today regarding the recent problems with recent transactions. It appears they still do not know the true issue of the problem but do fear that the US bank accounts used to process transactions have been seized by the US Department of Justice.
The management of Quicktender would like to make the following statement
regarding the current situation with UseMyWallet/Quicktender withdrawals:
We have operated a reputable and reliable payment mechanism for US customers
since 2006. Our reputation is important to us, and until recently there has
never been any question that players and merchants would be paid. In order
to achieve this, we have built over many years relationships with payment
intermediaries that share our values of honesty and integrity. In the
jurisdictions from which we offer our services we are proud to be properly
licensed and constituted, and have even worked with US law enforcement on
occasions where criminal activity has been identified.
However, we cannot always predict some of the vagaries of the US
administration. Over the past 2 weeks we have in good faith transmitted
withdrawals initiated by Quicktender account holders to beneficiary bank
accounts in the US. The money left our account in Europe. It was only in
response to increasing complaints from our customers that we recognised
there was a problem, and asked our bank to investigate. It emerges that the
money has been accumulated in our bank’s correspondent banking partners
accounts in the US, and has been frozen. We suspect it is possible that
these funds may be subject to a seizure order by the US authorities. We
would stress that we do not have bank accounts in the US of our own, and
that the funds have left our account Europe.
It is our express intention to ensure that the funds of our account holders
are safe. For this reason we have decided to suspend future withdrawals
until we understand what has happened to the money that has been frozen. If
we continue to transmit bank wires into the US we could find that these
funds also do not reach their ultimate beneficiaries. This would simply make
the problem worse.
We ask our customers to bear with us in these difficult times. Please be
assured that we have always honored our obligations in the past, and that we
will make every effort to overcome these current difficulties. It is not in
the interests of anybody to attempt to financially impact QuickTender
further. These actions may impact the future viability of the company and
the ability of the company to pay its customers. We are assessing our
current exposure, and how best to reintroduce withdrawals safely.
We would like to take this opportunity to thank our customers for their past
loyalty, and to reiterate that we will take all possible steps to ensure
that our customers money is secure.
April 15, 2011 will forever be known in the online poker world as Black Friday. It was on this day that the US Department of Justice seized the American domains of the three largest online poker rooms, PokerStars, Full Tilt Poker and Absolute Poker. This put an end to millions of players wagering at these sites. Poker has moved from being a mere source of entertainment to a professional occupation that enables persons to earn a livelihood. In the last few years with the woes of the economic downturn many persons have relied only on playing poker at online sites for the roof above their heads and the bread on the table. In one stroke this was snatched away on Black Friday.
Poker Players Alliance is a body that is lobbying for legalization and regulation of online poker in the United States. After Black Friday, John Pappas its executive director revealed some very pertinent figures. He said 8 million to 10 million Americans play poker online for money. About 50,000 claim to be full-time, professional online poker players, while an inestimable number use online poker to supplement income from day jobs. The three online poker sites that were shut down on Black Friday catered to roughly 70% of the American online poker market.
Hence it is easy to realize that there has been a massive loss of poker income on account of these sites being forced to shut down. There are two types of online poker players that are most affected. One is the player whose substantial savings were lying as deposits at these online poker rooms. PokerStars has initiated the process of refunding the deposits and others will follow, but this will take time. Meanwhile money locked up at the poker sites is money lost. It cannot be mobilized to create other income, not even to play poker at land casinos. One such sad tale is that of Ziethlow. He now sings for donations outside casinos to earn a fraction of what he earlier did.
The other type of online poker player who is badly affected is the one who is physically challenged and hence has little other opportunity for earning a living. ESPN did a story on Brian Ford after Black Friday. Brian is confined to a wheelchair because of Spinal Muscular Atrophy. His work of doing data entry dried up in 2008. Since then he has been surviving on online poker. Online poker has given Ford more than an income. It has given him income with the comfort of anonymity. Now both are lost. It’s estimated that thousands of disabled Americans play online poker daily to supplement their meager disability income.
Loss of income to poker players is the direct fallout of Black Friday. There is considerable collateral damage as well. The closure of these online poker sites will lead to job losses there. Absolute Poker employees in Costa Rica are already beginning to feel the heat. Then there is the poker training industry consisting of poker software, poker books and online classes. There are agents who represent players in getting them the best sponsorship deals. With income to the poker sites drying up, their sponsorship activities will take a hit and affect the representation business as well.
The Merge Poker Network has announced that $100,000 will now be the guaranteed prize pool for the Sunday Deepstack every week, including this one. Take your seat this Sunday with a $109 entrance coupon, by buying in for $100 + $9, or by qualifying through the 100 Seats to $100K Freeroll. There are several online poker sites that we highly recommend on the Merge network with Lock Poker being the most popular one.
The Merge Poker Network has become the place to play since Full Tilt Poker and Pokerstars pulled out of the US. Look for their daily and weekly guaranteed tournaments to continue to grow as the network grows. More USA Accepted Poker Sites.
$100,000 Sunday Guaranteed
When: Sunday, May 15th @ 15:00 Merge Poker Time (16:00 EST)
How: $100 + $9, $109 Deepstack Coupon, 10,900 VIP Points
Prizes: $100,000 Guaranteed
Where: Tournaments >> Scheduled >> Special
In addition to the usual buy-ins, players can now qualify for this major tourney via the 100 Seats to $100K Freeroll. Earn 250 VIP points in the week before the 100 Seats freeroll, then finish in the top 100 to win a $109 Coupon for Sunday’s showdown.
100 Seats to $100K Freeroll
When: Saturday, May 14th @ 15:00 Merge Poker Time (16:00 EST)
How: Earn 250 VIP pts before the freeroll starts
Prizes: 100 free seats for $100k Guaranteed
Where: Tournaments >> Scheduled >> Special
In a previous blog, I wrote that the timing was suspicious. Why did the federal Department of Justice (“DoJ”) make its big show on Friday, April 15, 2011, when the grand jury had been meeting for more than a year?
We might not know the reasons for the timing. But we can understand why the prosecutors structured their cases as they did.
I often act as a consultant and expert witness for governments and industry. But I am also a professor of law, teaching not only Gaming Law, but also Criminal Law. So, here’s my view of why the DoJ’s indictment reads the way it does.
The 52-page document contained nine counts: violation of the Unlawful Internet Gambling Enforcement Act (“UIGEA”), conspiracy, illegal gambling business (“IGB”), bank and wire fraud, and money laundering. The criminal charges were carefully structured for maximum legal and public relations impacts.
The UIGEA was used because it covers money transfers, and to reinforce the false message that it made Internet gambling illegal. The UIGEA is actually only an enforcement act. It requires there be a violation of some other federal or state anti-gambling law.
The UIGEA was rushed through Congress by then-Majority Leader Bill Frist (R.-TN) and is a mess, with typos and other problems. For example, the UIGEA is expressly limited to payments going from players to operators for illegal online gambling, not the other way around. Do all the bank accounts that were seized only contain money being sent by players in New York to the poker sites? Was none of it money won by players?
Conspiracy is often called the prosecutor’s friend. All you need to prove is an agreement and an act in furtherance of the conspiracy. You don’t need to show any other crime was actually committed or even attempted. Conspiracy also makes trials easier for prosecutors. For example, testimony by a cooperating witness, “He told me he was going to take poker bets from the U.S.,” would normally not be allowed in as evidence under the hearsay rule. But, “He asked me if I wanted to help him set up a site to take poker bets from the U.S., and I agreed” comes in, to prove there was an agreement.
Almost all of the DoJ’s legal claims depend on the underlying activity, online poker, being illegal. The problem for prosecutors is that the main federal anti-gambling statue, the Wire Act, has been held in a published federal Court of Appeals decision to be limited to bets on sports events and races. Since the Wire Act won’t work, prosecutors used the IGB. That statute 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 only ones mentioned in the indictment are New York’s misdemeanor anti-gambling statutes. These clearly do not apply to players, which means the DoJ may not have had the right to seize players’ bank accounts. More importantly, the New York laws have never been tested, to see if they overcome the strong presumption that a state law does not reach beyond its borders. It also raises the issue of whether poker is a “contest of chance,” as required by Penal §225.00.
Note the repeated use of the word “fraud.” With Internet gambling, prosecutors have tried to find ways to include fraud whenever possible. For example, among the 22 counts in the criminal complaint filed against BetOnSports was a charge of mail fraud, for the weak claim of falsely advertising that sports betting was legal. (The website reached the whole world, including places where sports betting is, in fact, legal.) I believe, the DoJ’s emphasis on fraud is designed, in part, to create the impression among players that online sites cannot be trusted.
Most of the mail and bank fraud counts are actually weak. They involve defendants lying to banks to disguise the fact that online poker was involved. Phony companies were allegedly created and transactions labeled as sales of dog food and golf balls. There will be factual issues whether the banks actually knew what was going on – billions of dollars is a lot of dog food. And are we to believe no player ever mentioned online poker to his bank?
The bank fraud statute requires a scheme to either “defraud a financial institution” or to obtain any money owned or held by the bank. The second one won’t work. Lower courts have said the law was designed to protect the integrity of the banking system. But, the U.S. Supreme Court ruled that part of the statute means what it says: prosecutors have to show the victim lost money. Here, the banks were supposedly tricked into making millions of dollars. Talk about a victimless crime.
So, the DoJ is left with having to show that banks were “defrauded.” Again, there will be an issue of what exactly did the banks lose? Even after the UIGEA a bank cannot be charged with a crime for unknowingly facilitating online poker. As of June 1, 2010, there are regulations the banks have to follow. But, almost all the events took place prior to that; and, the final regulations do not provide for fines.
Bank fraud carries a maximum sentence of 30 years and a $1,000,000 fine. Money laundering also can lead to hefty penalties. It is another commonly used count in gambling prosecutions, because the prison sentence is based on the volume of money that was transferred, not on the gaming operations’ actual profit and loss. A defendant faced with 50 years in prison can be persuaded to plead guilty to illegal gambling charges that would otherwise be dismissed.
The indictment sets forth facts that would seem to call for a count of bribery, if true. Some of the defendants paid a small Utah bank $10 million to buy 30% of the bank, so the bank would transact online poker payments that the bank was reluctant to do. An officer and part-owner allegedly asked for, and received, $20,000. The indictment is careful to call this payoff a “bonus” rather than a bribe. The banker was charged with conspiracy and being part of the other activities constituting crimes. This avoids the question of who exactly was the victim, since it was the banker who solicited the payment. It also gets around the problem of whether a briber and bribee can also be charged with being coconspirators.
The DoJ has done what it could to make this indictment as frightening as possible. But we will probably never know just how strong the government’s case actually is. The payment processing defendants who are now in the U.S. will fight for a while, but will eventually have to agree to plea bargains.
The others, especially the big fish, also won’t stand trial. They would like to settle, even paying hundreds of millions of dollars and admitting they violated the law, but only if they won’t serve long prison sentences and risk losing their licenses in other countries. The operators have one major bargaining chip: If the DoJ won’t make a deal they can live with, they will simply stay away from countries where they might be extradited.
Earlier today Absolute Poker and UB decided to let go of all their sponsored pros. Joe Sebok who was an outspoken front man for the company immediately posted to his blog claiming among other things “The pro’s monies are still tied up on the site as well, so on that level we are all in the same situation as the general poker public.” The poker community at large, especially those on the 2+2 poker forums, have little sympathy for Sebok who used his status with the company and the poker community to make players believe that Absolute Poker and UB were safe places to play. Below is the Press release in it’s entirety.
BLANCA GAMES ISSUES STATEMENT ON PRO PLAYER CONTRACTS
Absolute Poker and UB Part Ways with Poker Pros to Focus on Non-U.S. Market
St. John’s, Antigua and Barbuda (May 9, 2011) — Blanca Games Inc. (“Blanca”), operator of online poker rooms Absolute Poker and UB, issued the following statement today:
“Recently, Absolute Poker and UB ceased their U.S.-facing operations due to legal developments in the United States. To ensure the on-going viability of the business, it has been necessary to downsize certain aspects of Absolute Poker’s and UB’s operations. These efficiency measures have been taken to enable the brands to continue to operate their non-U.S.-facing business.
“These actions are the result of the severe impact of ‘Black Friday’ on the business, and these efficiency measures have negatively affected not only the financial position of the brands, but also their staff and personnel. Regrettably, the negative effect of ‘Black Friday’ has extended to the Company’s highest profile group of poker professionals, known as ‘Team UB’. Consequently, Blanca’s executive management team today informed its roster of sponsored pros that, in accordance with the provisions of their agreements, their contracts have been terminated. Each of the ten Team UB pros, plus one player representing Absolute Poker, has received personal notification that their sponsorship arrangement with Blanca’s respective online poker room is now invalid.
“This was a difficult task for Blanca’s management, and we are very disappointed that we have been compelled to sever ties with our sponsored pros. Over the years, the Company has been successful in gathering a group of young, extraordinarily talented and brand-appropriate poker professionals who have proudly sported its logos. We are truly saddened that circumstances have dictated this course of action, and we regret that we are no longer in a position to partner with our sponsored pros, or to provide them with a source of income for playing the game that they love. We appreciate their significant time and dedication shared with us, and we thank them for the loyalty and patience they have continued to show us even during the unsettling events of the past few weeks. We respect and admire them for their many accomplishments, both at the poker tables and away from them, and we will always be grateful for their valuable contributions to building the UB and Absolute Poker brands and to creating a rock-solid community at the pair of online poker rooms.”
The full list of affected pros is as follows: Joe Sebok, Prahlad Friedman, Eric “Basebaldy” Baldwin, Maria Ho, Brandon Cantu, Tiffany Michelle, Scott Ian, “Hollywood” Dave Stann, Adam “Roothlus” Levy, Bryan Devonshire and Trishelle Cannatella.
Today’s layoff of all 11 American-based poker pros follows last week’s announcement by Blanca that its workforce had been significantly reduced. Both actions form part of a strategic restructuring of the company that will enable the business to focus its resources on consolidating its non-U.S., rest-of-the-world operation and software business. Absolute Poker and UB continue to operate their non-U.S. facing business around the world.
The company’s legal counsel continues to move forward in ongoing discussion with the U.S. Attorney’s office with the ultimate objective of reaching an agreement with the Department of Justice that would facilitate the return of funds to U.S. players.
Following up on our earlier story about raids on the offices of Pokerstars, Absolute Poker and UB we have learned from our source in Costa Rica that today’s raid on the Pokerstars office was a mistake. They were apparently led to the wrong offices by a reporter who is know for sensationalistic news coverage.
Dr Pauly also confirms this from his sources on Tao of Poker. According to Pauly the police officers looked around, had some coffee and left with taking anything.
We’ve also learned that the Costa Rican authorities are chasing down 3 owners of Absolute Poker and UB. Olman Rimola, Scott Tom, and Brent Beckley have been hiding from authorities since they were named in a US DOJ indictment on April 15th.
We’re sure there is much more going on here that we don’t know yet and will keep you posted on everything we learn including a post we came across on 2+2 that claims there was a group of investors that made an offer to take over Absolute Poker and UB.
Sports Interaction Poker holds a monthly tournament called the Insider’s Tournament at which the top winner gets a seat in a $5K Added Tournament and the top 20 finishers get a cash prize.
Where the event gets its name of Insider’s Tournament is from the prizes that go out to the top 10 finishers: each player’s choice of one of over a dozen different poker insider’s books, including Doyle Brunson’s Super System I and II and Dan Harrington’s Harrington on No Limit Hold’em Strategy Volumes 1, 2 and 3.
Sports Interaction Poker is running daily freeroll qualifiers into this monthly event, every night starting at 9 pm EST. The top 10 finishers at each of these freerolls will win seats in that month’s Insider’s Tournament.
The end-of-month Insider’s Tournament is a freezeout event with no re-buys and no add-ons.
Sports Interaction Poker is also running its Two for the Money promotion throughout this month, with the first qualifying week and the weekly tournament just finishing up, and three more coming up ahead.
In the Two for the Money promotion, players are encouraged to multi-table by winning entries into a weekly $2K Kamikaze tournament for playing in at least 300 raked hands across two or more tables simultaneously over the course of a week. You can accumulate those hands over multiple sessions, but you must be sitting in at a minimum of two tables at the same time in each session.
With week 1 of May’s Two for the Money promo already wrapping up, week 2 runs May 8 – 14 with its Kamikaze final on the 17th, week 3 runs May 15 – 21 with its Kamikaze final on the 24th and week 4 runs May 22 – 28 with its Kamikaze final on the 31st.
According to a report on eGaming Review, some Full Tilt Poker bank accounts have been unfrozen by the US Department of Justice to faciliate player paybacks. According to the report most of the funds seized on April 15th belonged to Full Tilt Poker which is something most in the poker community where beginning to figure out when Full Tilt couldn’t pay players. Over the last couple of weeks rumors had been going around that Full Tilt were trying to sell off part of the company in order to raise money to pay players in the US.
Bradley Franzen, one of the 11 people charged last month in the case that shut down U.S. operations for Pokerstars, Full Tilt Poker and Absolute Poker, pleaded guilty Monday in Manhattan federal court, admitting he illegally helped link gambling companies with banks to process millions of dollars.
Quicktender – UseMyWallet issued the following press release today regarding the recent problems with recent transactions. It appears they still do not know the true issue of the problem but do fear that the US bank accounts used to process transactions have been seized by the US Department of Justice.
The other type of online poker player who is badly affected is the one who is physically challenged and hence has little other opportunity for earning a living. ESPN did a story on Brian Ford after Black Friday. Brian is confined to a wheelchair because of Spinal Muscular Atrophy. His work of doing data entry dried up in 2008. Since then he has been surviving on online poker. Online poker has given Ford more than an income. It has given him income with the comfort of anonymity. Now both are lost. It’s estimated that thousands of disabled Americans play online poker daily to supplement their meager disability income.
The Merge Poker Network has announced that $100,000 will now be the guaranteed prize pool for the Sunday Deepstack every week, including this one. Take your seat this Sunday with a $109 entrance coupon, by buying in for $100 + $9, or by qualifying through the 100 Seats to $100K Freeroll. There are several online poker sites that we highly recommend on the Merge network with 
In a previous blog, I wrote that the timing was suspicious. Why did the federal Department of Justice (“DoJ”) make its big show on Friday, April 15, 2011, when the grand jury had been meeting for more than a year?
Following up on our earlier story about 