The poker world was turned upside down last Friday as federal authorities indicted the founders of the world’s largest poker rooms—PokerStars, Full Tilt Poker and Absolute Poker—on charges of bank fraud, money laundering and illegal gambling.
The FBI seized five domain names and more than 75 bank accounts in 14 countries used by the poker companies and their payment processors.
John Campos, Vice Chairman of the Board and part owner of SunFirst Bank, a small, private bank based in Saint George, Utah, and Chad Elie, who helped obtain accounts at SunFirst and others U.S. banks for the companies, were arrested Friday morning. In 2009, Elie and three others approached Campos, who agreed to process gambling transactions. In return, Elie and an associate invested $10 million in SunFirst Bank and Campos received a $20,000 bonus.
One of the defendants, Bradley Franzen, is expected to appear for his arraignment on April 19, 2011. The other defendants: Raymond Bitar, Isai Scheinberg, Nelson Burtnick, Paul Tate, Scott Tom, Brent Beckley, Ira Rubin and Ryan Lang are not in the U.S. at this time.
“As charged, these defendants concocted an elaborate criminal frauds scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits,” said Manhattan U.S. Attorney Preet Bharara. “The defendants also engaged in massive money laundering and bank fraud.”
Upon logging into PokerStars, U.S. players received this statement:
- As you may have heard, we have had to suspend real money poker services to people based in the US due to legal developments there. The developments are confined to the US 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 US it is business as usual.
- The PokerStars website has been moved to www.pokerstars.eu and our support e-mail address is now support@pokerstars.eu. We apologize to our players for any inconvenience caused by this disruption. Please be aware that we are currently experiencing a very high volume of e-mails, so response times are delayed. We will answer player e-mails as soon as possible. Thank you for your patience and understanding in this matter.
U.S. players logging into Full Tilt Poker received this statement:
- Unfortunately, due to recent actions by the U.S. government, Full Tilt Poker is unable to accept “real money” play from U.S. players at the current time, and this includes any deposits or withdrawals. We are working to resolve these issues as soon as possible and will keep you updated as information becomes available to us. We are deeply sorry for this inconvenience, but these events are beyond our control. Please be assured that your funds are safe, and we thank you for your patience while we do everything in our power to have your money returned to you as soon as possible. Please contact support@fulltiltpoker.co.uk for more information.
Players from other countries can continue to play as normal. Many non-U.S. residents thought that the inability for U.S. players to play would create big overlays in guaranteed tournaments. (An overlay occurs when a poker room has to add money to the prize pool in a guaranteed tournament because not enough players have registered to match the guarantee).
Of course, PokerStars and Full Tilt Poker reduced the guaranteed tournament prize pools accordingly. PokerStars changed the Sunday Million prize pool to $1 million, down from $1.5 million; the Sunday $500k is down to $250,000, the Nightly $100k is now $70k and the Wednesday $250k is now $100k.
The future of the Unlawful Internet Gambling Enforcement Act (UIGEA)
On October 13, 2006, the United States enacted the Unlawful Internet Gambling Enforcement Act, part of the SAFE Port Act. Title VIII of the act, also known as UIGEA, “Prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.”
In May 2009, Congressman Barney Frank introduced a bill, the Internet Poker Act of 2010, to overturn UIGEA, only to have it fail. Undeterred, Frank and fellow Congressman John Campbell introduced a similar bill last March called the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The bill would set up a federally licensed and regulated framework for online gambling with safeguards to stop minors from participating.
In an interview with congressional newspaper The Hill, Mr. Frank was critical of Friday’s government crackdown. “What an incredible waste of resources,” Frank said. “Go after the people responsible for empty houses, not full houses. I’m not saying violate the law, but to give this priority in law enforcement over some other things I think is a terrible idea and I think the administration is wrong on this.”
ESPN Removing Poker Shows
As of result of indictment of the biggest three online poker companies, ESPN will remove poker advertising and programming.
In an emailed statement, the network had this to say: “We are aware of the indictment only through what has been announced publicly. For the immediate future, we are making efforts to remove related advertising and programming pending further review.”
However, ESPN.com’s poker editor Andrew Freeman revealed in a tweet that ESPN will not remove WSOP events, only PokerStars sponsored North American Poker Tour events.
What does the future of online poker hold? Will there be an outright ban or will Congressman Frank’s bill be enacted to regulate and tax online poker? What do you think should be done?
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I think it is time that the American People stand up for the rights of Poker Players everywhere.. If you are an American citizen write your senators and congressman and tell them to suport online poker.
There is a Website called Poker Players Alliance and anyone can go there and read all about the DOJ’s actions. They can also click on a link that has already drafted emails that you can send congress voicing your opinion..
Do it people!!!
If they can push around us poker players what will they do next?????
David Groover
Knoxville Tennessee