On Friday 15th April 2011, US Federal attorneys in NYC indited execs of the big three online poker sites: Poker Stars, Full Tilt Poker and Absolute Poker. Simultaneously the FBI took the domain names for those sites and arrested payment processors and an owner of a small bank involved in funneling US poker player funds to the sites. The site execs themselves could not be arrested as they are resident overseas.
The execs claim, as they always have, that they are not technically breaking the 2006 US law that tried to stop online gambling. In that law it is US banks and payment processors that are liable. The law was obviously constructed that way because of the obvious: in the global internet world, gaming sites are legal entities operating universally outside of US boundaries, with headquarters and execs in foreign countries. No point passing a law with no teeth.
So what are the federal prosecutors playing at? Well, in his high price war, with billions of dollars of untaxed income at stake, the US attorneys have a new angle: they are not saying the sites broke the US law, but that committed fraud in tricking US banks, pretending they were vanilla internet sites like flower stores.
In an american court, with the large amount of money slipping away to foreign interests involved, I expect the court will be predisposed to the argument. But it will be an interesting fight: the internet poker execs can now afford very powerful law firms to defend them and much is at stake.
An interesting side note to this is the immediate effect on the brick-and-mortar casinos, particularly the hard-pressed casinos of Las Vegas and Atlantic City. Expect full poker rooms these joints at the weekends, as Internet poker junkies seek an outlet for their passion!
