War was declared on Friday, April 15th, by the United States government against online poker players living in the U.S. In a nine-count indictment, the Justice Department went after the three biggest online poker companies, PokerStars, Full Tilt Poker and Absolute Poker. It charged the companies' principals with money laundering, bank fraud and "illegal gambling offenses." Also named in the indictment, a number of payment processors who facilitated payments from US residents to the off short poker sites through various -- according to the government illegal -- means.
The immediate result of these criminal charges was the suspension of all US poker player's ability to play online poker -- or to access their funds -- at these sites. Deals whose ink had barely dried between land-based casinos and various online sites were canceled. People whose livelihood is based on online poker were scouring the web for new jobs. And somewhere Senator and arch opponent of online gambling John Kyl was smiling.
Those defendants currently residing in the US have been arrested; the FBI is working to have those living out of the country extradited. Their US sites have been seized, their assets frozen, and they are the subject of a forfeiture action.
The gist of the action is that, to deal with the restrictions on money going from US banks to off shore online poker sites, the poker companies tricked "banks and financial institutions to process billions in payments to the companies by having the money disguised as payment to non-existent online merchants and other non-gambling entities. The defendants utilized third party payment processors who lied to US banks about the nature of the financial transactions they were processing through the creation of phony corporations and websites to disguise payments to the companies."
According to the Feds, the payment processors set up phony companies and websites purporting to sell everything from clothing to jewelry to bicycles to golf equipment and flowers all in an effort to disguise that the payments were going from US residents to online poker companies. They are seeking billions of dollars from the sites but what they want, more than their money, is to shut them down once and for all.
A cursory look at a tournament on PokerStars hours after the announcement showed a world without US players; it was an eerie sight. Whether this will be the beginning of the end of online poker is the question, and the likely answer is that this action may actually be what spurs significant changes in the law. There is no question now that the law needs to be changed. Not one of us playing poker considered ourselves criminal or thought there was anything illegal about playing poker. It is not gambling in the true sense of the word as its outcome is not primarily the result of luck. It is a game of skill that the federal government has no business interfering with.
Now that we've been shaken out of our complacency, we can all take up arms against the battle the Feds have brought against our beloved game of poker. We must mobilize to get the change in Congress that will silence the objectors and establish the change we need to protect this game we love -- and love to hate. To see what you can do, please check out theppa.org.
To follow the story, check the Poker Player Newspaper for the latest.
So are players in danger of prosecution as well? Because I lost more than I made on there...
ReplyDeleteThey're not likely to go after players -- there are too many and it's unlikely you can prove the players intentionally misrepresented what the money was for. The Feds are focused on closing down the sites, putting them out of business and making them pay. They're trying to cut off the head of the snake.
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