Dept. of Justice Shuts Down Popular Poker Sites


The U.S. Department of Justice seized the online domains of poker sites operating in the United States (not based here, but serving players here, mind you) over the weekend. Last year, Reps. Barney Frank, Ron Paul and others were trying to find ways to fully legalize and regulate these sites in the U.S. As the article points out, 8 to 10 million Americans play on these sites. Additionally, I recall PriceWaterhouseCoopers released a study a few years ago showing legalization of online poker could raise $34 billion in tax revenue over 10 years for the federal government. This topic is just beginning to heat up, and I’ll save my comments on the matter for the comment section, lest there be no confusion that the Chamber necessarily endorses my position on this:

Reporting from New York and Los Angeles— A thriving online poker industry catering to Americans but operating from abroad to evade U.S. gambling laws could be wiped out by criminal charges against top executives in the business.

Eleven people, including the founders of the three largest poker sites open to U.S. players, were charged by a federal grand jury with bank fraud, money laundering and violating gambling laws. The government also is seeking to recover $3 billion from the companies.

The FBI had shut down two of the sites, Full Tilt Poker and PokerStars, by Friday evening and were working to do the same with the third, Absolute Poker. Online visitors were greeted with a message saying, "This domain name has been seized by the F.B.I. pursuant to an Arrest Warrant," and an enumeration of federal anti-gambling statutes and penalties.

An estimated 8 million to 10 million Americans play poker online for money; thousands of them earn their living on the sites, according to a players advocacy group.

Congress tried to shut down the industry by enacting an anti-gambling law in 2006, but most sites found ways to work around the vaguely worded measure. Since then other members of Congress have proposed bills to legalize Internet gambling, but they have failed to reach a floor of either chamber.

In the community of players, news of the indictments unsealed Friday in federal court in Manhattan landed like a bombshell.

"Everyone’s in panic," said David Tuthill, a 22-year-old in Las Vegas who makes his living playing online and in casinos. "Everyone sort of knew in the back of their minds that a day like this was possible — and maybe even inevitable — but it’s really just shocking now that it’s here."

Two of the 11 defendants were arrested Friday morning in Utah and Nevada. Federal agents were said to be working with Interpol to capture defendants located overseas.

None of the companies responded to requests for comment.

UPDATE: Interesting article from the Daily Caller on April 22 regarding this topic.

2 thoughts on “Dept. of Justice Shuts Down Popular Poker Sites

  1. As a poker player, I must say this is a rather disappointing development. Although, the upside here is that it will generate legitimate conversation on this matter. I think the fact that 8 to 10 million people in the country are on these sites should tell you something. Additionally, the Unlawful Internet Gambling Enforcement Act (UIGEA) — another gem from the Bush administration — is so vaguely written it’s not even clear that it’s illegal. There are 11 states where “online gambling” is illegal, however, and Indiana is one of them. Although, we have yet to have the conversation about whether or not poker is gambling. As someone who consistently places highly in tournament home games, I can tell you that while luck is certainly a part of it, optimal strategy is most important, thereby making it a game of skill in my opinion. Those interested in learning more on the topic and contacting legislators should visit the Poker Players Alliance at http://www.theppa.org. Not sure if this whole situation is a moralist indictment on poker playing, or just a means to move out existing operators so American casino companies can get into the game. Either way, it’s possible the U.S. may be violating international trade agreements here and I believe has to pay the European Union penalty fees, so the verdict, as they say, is likely still out. Also, the fact that this was done by the DOJ with little input from Congress — as I understand it — is unnerving. Either way, the federal government is missing out on a mighty big rake by not legalizing and regulating these sites.

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