Black Friday

Five weeks passed since the DOJ handed down indictments on April 15, 2011 that decimated the American online poker market. The poker community was still trying to deal with the fallout from Black Friday when the online gaming community was struck with a second wave of indictments.
 
On May 23, 2011, a Maryland court indicted two major players, ThrillX Systems and K23 Financial Services (BMX Entertainment), for money laundering and running illegal gambling business. As a result, domains affiliated with both companies were seized and shut down by the Feds. Two of those sites were online poker rooms—Doyle’s Room and True Poker. A pair of sports betting sites were also targeted—BookMaker.com and BetEd.com. Also seized were Funtimebingo. com, Goldbnarchcasino.com, Betgrandesports.com, 2Betdsi.com, and Betehorse.com.
 

By Shari Geller
 
In a split that could potentially spell doom for chances of online poker legislation passing in this, or perhaps any, Congress, the American Gaming Association announced earlier this week that they are not supporting Representative Joe Barton’s bill to legalize and regulate internet poker.  Instead, the AGA announced that it would be introducing its own competing bill later this year.
 

By K. Preston Oade, J.D. & Arthur S. Reber, Ph.D. [Editor’s Note: Much of what has been written about Black Friday is not correct. Here, a lawyer and a psychologist outline the law, discuss the psychology of the situation, and urge players to keep playing online.]

1. No federal law makes playing online poker illegal.

By Lou Krieger and Shari Geller
 
Following in the footsteps of the Alderney Gambling Control Commission (AGCC), France suspended Full Tilt’s license for the foreseeable future, which deepens the crisis faced by the deeply troubled poker company.

According to French regulators, Rekop Limited, Full Tilt’s French license holder, had its license suspended as a “precautionary” measure. The measure was required, according to the regulators, due to the dot.fr site’s inaccessibility following suspensions last week by the AGCC and Full Tilt’s need to find additional funds in order to operate.

By Shari Geller and Lou Krieger
 
Yesterday it was reported by the Los Angeles Times that Full Tilt Poker was being purchased by unnamed European investors.  The article went on to say that, as part of the deal, the new investors were going to repay the money owed to U.S. players, settle the civil complaint brought by the U.S. Department of Justice against Full Tilt and settle the civil case brought by Phil Ivey.   
 

By Shari Geller and Lou Krieger
 
According to an article in the Los Angeles Time, it appears that Full Tilt Poker, which has been on the ropes since it was the subject of federal indictments unsealed on April 15, may be purchased by a group of European investors.  The deal, if finalized, could result in repayment of some $150 million owed to U.S. players who have been seeking refunds of their deposits since Black Friday.
 
Full Tilt Poker ceased serving U.S. players on April 15 when it, PokerStars and Absolute Poker, were the subject of federal indictments charging the companies’ principals and others with bank fraud, money laundering and violating gambling laws.  Full Tilt continued to serve players outside of the U.S. until its entire operations were shut down by its licensing body, the Alderney Gambling Control Commission (AGCC), earlier this week.

By Shari Geller and Lou Krieger
 
If you thought things could not get worse for Full Tilt Poker and those who play on the site, you were wrong.  The Alderney Gambling Control Commission (AGCC). has suspended Full Tilt’s licenses, shutting down the poker room’s operations immediately and leaving players to wonder if the site will ever reopen and their money be returned.   
 
The AGCC issued this statement about the suspension: “The decision to suspend these licenses follows a special investigation prompted by the indictments unsealed by US Attorney General’s Office in the Southern District of New York on 15th April 2011, during which grounds were found to indicate that these licensees and their business associates were operating contrary to Alderney legislation."
 

By Shari Geller
 
As expected, this afternoon Republican Congressman Joe Barton of Texas introduced HR 2366, the Online Poker Act of 2011, in the U.S. House of Representatives.  The bill as presented has 11 original co-sponsors from both sides of the political aisle:  Shelley Berkley (D-Nev.), John Campbell (R-Calif.), Steve Cohen (D-Tenn.), John Conyers (D-Mich.), Barney Frank (D-Mass.), Michael Grimm (R-NY), Mike Honda (D-Calif.), Peter King (R-NY), Ron Paul (R-Tex.), Ed Perlmutter (D-Col.) and Linda Sanchez (D-Calif.).
 

By Shari Geller
 
Republican Congressman Joe Barton will introduce today a new online poker bill entitled  the ‘‘Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2011’’ to establish a program for State licensing of Internet poker.  The Texas lawmaker has been working with the lobbying group the Poker Players Alliance in drafting a bill that would facilitate the return of online poker for US residents.
 

One of the primary concerns on and after Black Friday (April 15, 2011) was the ability or lack thereof to withdraw funds from the online poker websites that were forced to abruptly leave the United States and abandon American players. Whether players had hundreds of thousands of dollars or a few hundred in their respective accounts, that money mattered to them, and it was their rightfully earned income. But how were they to cash out when bank accounts and websites were seized by the Department of Justice?
 
The online websites—PokerStars, Full Tilt Poker, UB/Absolute—had no quick or easy answers, but PokerStars and Full Tilt seemed to step immediately to the plate and work out an agreement with the Department of Justice to facilitate players’ payments. The agreement specifically pertained to the use of .com websites by the companies and noted that the agreement would not prohibit the companies from issuing refunds to players.