Recently, Federal prosecutors revealed an indictment against the founders of some of the world’s largest online poker businesses, aiming to penalize the founders and shut down the gambling websites. The founders of PokerStars and Full Tilt Poker have been accused of operating illegal gambling business, and Federal prosecutors are hoping to get more than $3 billion in penalties, accusing the companies of money laundering.
The first move made by the US Attorney’s office was to seize the domain names of the main companies facing charges, along with restraining orders against bank accounts worldwide which have been used by the firms. The lawsuit is a complicated cat and mouse game between the Department of Justice and online poker companies who believe they are not violating US law, citing precedent from other US states that define poker as a game of skill and therefore cannot be considered gambling.
Federal prosecutors disagree with this assessment, claiming that the indicted companies used dishonest measures to operate their business, with proceeds from US residents who participated in online poker games in the billions. The focus of the indictment is a 2006 law that was designed to prevent the flow of cash from US banks to online gambling firms. The indicted firms, like many other gambling sites, operate in foreign nations which have less stringent restrictions on gambling and have thus far avoided such large scale litigation on US soil. The Government claims that online poker companies processed their revenues through online payment processing companies who used deceptive tactics to hide from banks the true destination of funds, and the arrests made in the case have been payment processors and bank operators who participated in the practice. The court filing states that online gambling firms worked in conjunction with payment processors to deceive US banks using tactics such as creating fictions companies such as jewelers, florists, and pet supply stores to launder money that was eventually sent to the online gambling companies.
The Government has attempted to build it’s bank fraud conspiracy charge by offering immunity to payment processors who work with Federal prosecutors in their attempt to catch the “big fish”- in this case, major online poker sites such as Full Tilt and PokerStars. Prosecutors are expected to argue the case not on the legality of online gambling, but based on fraud committed in handling and processing payments.
For US poker players who wonder what black friday will mean to them, only time will tell. In what appears to be an attempt to gain favor among the tens of thousands of Americans who enjoy online poker, Federal prosecutors stat that they are working against major online poker companies to return money to US players. This doesn’t mean that players will get back money they lost however; it simply means that the Government will cooperate with PokerStars and Full Tilt Poker to allow users to withdraw funds held by the companies. The deal will allow the sites to post information about how players can withdraw their funds without allowing the sites to begin operating again. The results of the upcoming poker legal battle will likely have a major effect on the future of online gambling in the US, and players everywhere are betting on what the outcome of the case will be.