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Showing posts with label UIGEA. Show all posts
Showing posts with label UIGEA. Show all posts

Saturday, November 19, 2011

Full Tilt Officially Sold to the Groupe Bernard Tapie for 80 Million: Be Afraid, Be Very Afraid

The on-the-surface good news is that the sale of Full Tilt Poker has been finalized and all players will (when is still unclear) be receiving the money from their player accounts.  The new agreement with the US Department of Justice prevents existing directors to hold shares in the new company, and GBT will have to relicense Full Tilt to start doing business again although that should be a very minor hurdle.

The frightening news for US players is the way the deal is structured.

What GBT and Full Tilt have done is essentially forfeited all assets of Full Tilt Poker to the US DOJ and then the DOJ is in turn selling Full Tilt back to GBT for 80M.  The player balances will be paid back by Groupe Bernard Tapie if they are outside of the US and will be paid back by the DOJ if they are inside the US.

Why is this scary?  Let me count the ways:

  1. Most significantly the US DOJ not only has a complete accounting of your player income from Full Tilt now but they will be cutting you a check.  If you are in the US, and are owed a lot of money, this may send a shiver up your spine when you consider the tax and legal ramifications. 

    You might as well consider that you are receiving a 1099 for the amount of your check when you receive it and good luck convincing the IRS that you lost a similar amount on the site earlier to offset those winnings.
  2. What standing does the DOJ have to receive forfeited property and then resell it without public access or review?  In other words if the DOJ confiscates a yacht it would normally be sold at a public auction and not to one specific buyer.  A non public process like the one that took place invites corruption in the DOJ.
  3. When last checked some player balances were not restored to their correct amounts.  It may be difficult or impossible to fix these issues when the DoJ is in control of the disbursements.

Since the deal was just announced hopefully there will be some clarification on these and other issues, but for now it might not be the time to get out the party hats.

Thursday, September 22, 2011

PPA Encourages You to Become a Lying Whore…

Today the Poker Player’s Alliance sent out an email suggesting that people who are owed money from Full Tilt Poker may be able to get compensation from the government if the allegations that Full Tilt was a “global Ponzi scheme” (hint it wasn’t—it was a badly run company).  By portraying themselves as “victims of a crime” players can potentially get some portion of their lost money back.

The Department of Justice is portraying it as if all offshore gambling is corrupt and that Full Tilt was stealing our money, but the fact is that they were the 2nd most reputable (ok 2nd was a ways down the totem but still) online poker company in terms of making sure people got paid, etc.  The one two punch here was the pressure of the UIGEA on the payment processors which caused them to float a bunch of invisible loans to plays to the tune of ???  100 million?  more? and then the seizure of a huge portion of their business funds while cutting off the US player population which they were much more dependent on than PokerStars.  I'm not holding Full Tilt faultless here, but I AM saying the DoJ literally caused this to happen.

So if we’re a victim of a crime the criminal is the US DoJ.

Text of the PPA Letter:

This week’s news from the U.S. Department of Justice alleging that Full Tilt Poker perpetrated a “global Ponzi scheme” that defrauded players has sent shockwaves through the poker community.  If true, these allegations detail a massive betrayal of player trust and will cause further hardship for the individual poker player, none of whom have been accused of doing anything wrong.  Based on the DOJ allegations, it is clear that the players who deposited money and played on Full Tilt Poker are truly the victims in all of this mess. 

The PPA believes that fundamental justice requires that players be repaid their money on deposit, and so we wanted to mention an avenue by which players can ask the DOJ to return funds to them through restitution in the pending case.  A federal statute establishes a number of rights for victims of crimes and requires that the government take steps to assist these victims. The DOJ put in place a set of guidelines and created a program, Victims and Witness Services, so that the government could live up to its statutory obligations to victims of crimes. Again, based on the allegations set forth by the DOJ, poker players who deposited money with Full Tilt Poker should be treated as crime victims and afforded the full rights and protections of our government.

If you have been unable to withdraw your money from Full Tilt Poker, you may wish to contact the Victim/Witness Coordinator at the U.S. Attorney’s office and ask that you be afforded the rights of a crime victim as outlined on their website. Let them know that you would like to be kept informed of any major developments in the case (United States v. Full Tilt, et al., 11 C 2564 and United States v. Scheinberg, et al., 10 CR 336) and that you are seeking restitution of lost funds.  

You can send your letter or email to:

Wendy Olsen Clancy
Victim/Witness Coordinator
United States Attorney's Office
One St. Andrew's Plaza
New York, New York 10007
(866) 874-8900
Wendy.Olsen@usdoj.gov

The PPA will provide you with information as this situation continues to develop.

Monday, June 27, 2011

Subject: Poker is reporting that Jack Binion is Considering Investment in Full Tilt Poker

Phil Ivey lurks around the deal in Ireland and if it goes through us players could get their money soon.

2004_binionSubject: Poker says that several sources have report that Jack Binion and Full Tilt Poker are in the final stages of talks whereby Binion would make a sizeable investment in Full Tilt.  The money provided by Binion would initially be put towards paying US player’s balances. 

Obviously for US players who have balances on Full Tilt this is great news.  As one of those players I can say that so far Full Tilt hasn’t even correctly reported the amount they owe me (much less provided any information on when they might pay it to me) so if this gets the ball rolling that’s a good thing.

I’ll definitely be keeping my eye on this story…

Friday, June 24, 2011

Joe Barton Releases Poker Bill and PPA Instantly Applauds It!

Shouldn’t we read it first?

Well Today (June 24, 2011) Joe Barton’s bill was released earlier than at least Joe Barton imagined (as early as a couple days ago he was predicting probably 2-3 weeks even though many sites have reported it would be released this week).  Pocket Fives has the bill online and you can read it here.

My first browse of the bill makes it seem fairly decent.  There are going to be issues that will be talked about, like only US players being able to play against other US players and the financial tracking the US government will now be able to do one all your poker wagers, oh and the tax collection and distribution by the licensed online poker venue itself.  Any of those could become big issues, but the truth is nothing can stop this legislation at this time the same way nothing could stop the Patriot Act when it was introduced after September 11th.  Online poker players are hungry and afraid and they’ll sign up for anything that lets them start earning money again.

Monday, June 20, 2011

Online Poker to be Legalized by Tuesday! Obama Defies Gravity and Becomes Defacto Protector of Sector 2814

if there isn’t any real news we can make it up as good as everyone else!

barack-obama-green-lanternStill nothing much is actually NEW.  The excitement out on the street is that the bill co-sponsored by Texas representative Joe Barton could arrive as early as the end of this week, which the various news blogs and so on have morphed to “WILL ARRIVE THIS WEEK AND INSTANTLY REGULATE ONLINE POKER” which is not going to happen.  The fact of the matter is that the Nevada land casinos are already hard at work (don’t worry how I KNOW THAT land casinos, get back to it) on putting together the regulation infrastructure necessary for handle online poker.  If they work REALLY fast the soonest that’s going to happen is early 2012 so it really doesn’t matter much how fast the Federal legalization comes as long as it happens near the time Nevada casinos are ready to cash in on it.

Here’s the actual rundown so much as I know (and I’ve had my ear to many a door as of late):

Full Tilt Still Has Not Paid US Players: In fact, they haven’t even credited the accounts of most US players with the funds that they will eventually be paid.  An article on Subject: Poker on June 16th talks about a 60 million dollar shortfall they created by essentially giving players “loans” when the players deposited money on the site but Full Tilt didn’t have a payment processor to debit their accounts.  Since Black Friday this has sort of sealed the loss for Full Tilt and may be part of the accounting difficulties they are experiencing which of course are in addition that they just plain don’t have the money to pay US players.

The Joe Barton Poker Bill: He’s drafting it and they keep quoting him as saying online poker’s been legal but the bank funding has not, which is incorrect.  The DoJ clearly thinks that online poker is illegal (regardless of the truth) and the funding woes of all online poker sites trying to service the United States are due to the UIGEA which only applies if online poker is illegal.  So basically the DoJ is the bully which is saying they think it’s [online poker] illegal and if you’d like to try your luck funding it you might just disappear in a bleeping hole.  Obviously none of the other crimes like providing bank executive bonuses, funding player accounts with golf balls or providing hot oil massages to bank employees would be necessary at all if the banks weren’t 100% convinced by the DoJ that online poker is 100% illegal and therefore under the enforcement of the UIGEA in the first place.

Phew!  Having said that, online poker is actually legal, just no one wants to risk their life or freedom to prove that especially when state and federal bills which will effectively legalize the industry are so close.

UB.com and AbsolutePoker (Cereus Network) Payouts:  Honestly I think we’re all going to probably have to give up on this one.  The amount of business they are doing post Black Friday just isn’t going to be sufficient to generate money to pay back the US customers they owe.  Take a trip over to Poker Scout and check it out for yourself.  Maybe in the long run this is the best thing.  Cereus made some horrible decisions and they still refused to fix their infrastructure including customer support and fraud prevention.  I’m not saying they were actively cheating anyone in 2011, but they weren’t doing as much as they should have to be responsive to customers and to protecting their online interests.  Full Tilt Poker is also guilty of many of these issues especially with regard to poor customer service.  I sincerely hope that the next wave of online poker uses PokerStars as a model.

Wednesday, May 25, 2011

Yesterday’s PPA Protest in Washington D.C.

Yesterday (May 24, 2011) the Poker Player’s Alliance took Greg Raymer and dozens of other poker professionals to Washington to talk to senators, congressmen and really anyone who would listen about the issues on online poker and the recent crackdown by the Department of Justice on “Black Friday” April 15, 2011 against the three largest online poker rooms serving the United States.
The message of the PPA was one calling for regulation and taxation of online poker “now” and the message that many many Americans have been affected by the loss of either their income source or their hobby.
Did their trip have an impact?  None that is immediately apparent.  The machine that is going to license and regulate poker in the United States is already turning and at this point the PPA is like a child yelling at workers at an in-progress construction site to “keep building.”  “They will. They will.”
Forbes Blog Gets It Wrong RE: Doyle Brunson
Apparently Nathan Vardi wasn’t aware that Doyle has been distancing himself from Doyle’s Room since the April 15th action by the DoJ.  Some are saying he had inside knowledge there were going after targets closer to him but in any event he made it public he was severing ties with Doyle’s Room weeks ago.
Here’s the full Forbes Blog Entry

Saturday, May 21, 2011

Relentless Defense Writes “U.S. Attorney’s Office on Tilt”

us dept of justiceThe lawyers from the Relentless Defense website write an excellent article regarding the DoJ action against PokerStars, Full Tilt Poker and UltimateBet on April 15, 2011 debunking many charges and clarifying the legal situation and parallel the thoughts of I. Nelson Rose, an expert on Gambling and the Law (read his articles on www.gamblingandthelaw.com).

United States v. Scheinberg, et. al.

It has long been axiomatic that criminal statutes should be written in such a manner that there remains no ambiguity regarding the prohibited conduct.[1] After all, a person has a right to know exactly what conduct he may engage in without running afoul of power hungry prosecutors. While it has never been quite enough, it is this maxim that has occasionally restrained Federal prosecutors from using the strong-arm tactics of a Mafia Don. But not today.

Relying primarily on the Unlawful Internet Gambling Enforcement Act (UIGEA) (31 U.S.C. §5361, et. al.) on April 15, 2011, the U.S. Attorney’s Office for the Southern District of Manhattan brazenly seized the websites of Full Tilt Poker, Poker Stars, and Absolute Poker and unsealed indictments against eleven individuals, including the founders of the poker sites and four bankers, charging them with bank fraud, money laundering, and illegal gambling. The U.S. Attorney’s Office is seeking at least $3 billion in “civil money laundering penalties and forfeiture” from the poker sites and the defendants. Before moving on the poker sites, the U.S. Attorney’s Office secured restraining orders against at least 75 bank accounts allegedly used by the poker sites to process their payments.

For those who operated the sites and for those who played poker at their online tables, April 15th was characterized as “Black Friday.”

A criminal indictment is no small matter. The power to indict is the power to destroy. Those targeted today by the Federal government are unable to access much of their funds, making it difficult if not impossible for them to meet their obligations.  They stagger from the blows to their reputations, watch helplessly as their friends recoil from them, and awaken every morning to the crippling fear of incarceration. In our Federal courts the presumption of innocence is meaningless, for without a single conviction, these ruthless prosecutors have taken all these men have and threaten to confiscate whatever morsel they have so far missed. Even if exonerated, the damage done to these men is severe and very likely irreversible. Given this awesome power, one would hope that these prosecutors would not arbitrarily ruin the lives of their fellow citizens unless they were sure these individuals had violated a criminal statute.  Not so.

Read the rest of the article

Thursday, May 19, 2011

CEO of Ceasars Pleads for Legal Online Poker

Fox News:

gary_lovemanWhat isn’t being said are the details of what kind of online poker game Gary Loveman and Caesars wants.  The answer to that question is most likely a game that where they control a large portion of the market themselves and a game where they are excluding offshore investors and players from participating.

Ultimately the devil will be in the details of whatever plan is enacted.  Harry Reid’s plan which included a 15 month (MINIMUM) blackout period was ridiculous yet many were for it.  What lame plan will we enable out of desperation instead of fighting the US crackdown legally based on the fact that online poker is not illegal and therefore the UIGEA does not apply to it (which further means that the laundering and other money manipulations were done because banks were frightened mob-style to not provide services to offshore poker providers)

I hope everyone keeps their eyes open and also remember if Fox News is for it there has to be a catch!

Sunday, May 08, 2011

Online Poker in Nevada in the near future? Scott Matusow says yep…

 

From www.scottmatusow.com

Harrah’s/Ceasar’s will be the first to roll out interstate online poker. The UIGEA only covers ” funding thru a financial institution illegal gambling”.. Nevada has legal gambling, and regulates it. It will be up to each individual state as to whether or not to allow online poker in their state. As it stands now, only a handful of states did not allow FTP/PS and others to serve them, and specifically have laws forbidding it. See, PS, by trying to team up with The Wynn Hotel, was trying to get into Nevada, and around The UIGEA. They were prepared to put in a ton of money to get into the “interstate online poker game”.. My contacts tell me that this triggered Harry Reid and Ceasar’s to use their contacts to give the “go ahead” for The DOJ to essentially muscle out the offshore giants, PS, FTP, AND UB/AP, opening up the market for Caesar’s first, then others will follow. In time, PS will return to the USA Market, once Interstate Poker is flowing, and most states allow it. This will trigger Federal regulation to allow PS/FTP and others to enter back into The USA Market, eventually. However, they will have to be legally incorporated in The USA, accepting corporate liability along with all other corporate law, and abide by any and all regulation at the time they enter back in. Basically, what has happened here is Caesar’s/Harrah’s saw a big offshore site, Pokerstars, try to move into their market in Nevada, and basically used/paid off their “people” to ensure that would just not happen.

Read the rest of the story here.

Tuesday, April 19, 2011

Professor I. Nelson Rose Talks About Current Black Friday DOJ Attacks on Online Poker


Federal Poker Indictments: Revisiting Prohibition

The timing is suspicious.

March saw Nevada regulators approving a partnership between Caesars and 888, and Wynn announcing a joint venture with PokerStars.  Now comes the indictments, three-billion-dollar civil suit and seizures of domain names by the feds.  Wynn immediately cancelled his plans.  Players were panicked.

Which was, of course, the goal.

If the allegations are true, the operators brought this on themselves, by lying and bribing bank officials. Of course, the prosecutors have the problem of convincing a jury that there is bank fraud when the "victims" are tricked into making millions of dollars.

And will this be the end of Internet poker?  Did Prohibition end drinking?

Prohibition created modern organized crime, by outlawing alcoholic beverages.  When people want something and it is illegal, organizations will arise to fill the demand.  How much more so when the activity, online poker, is not even clearly illegal?

Every action by the U.S. federal government makes it more difficult for it to go after the next operator.  The UIGEA, rammed through by the failed politician Bill Frist (R.-TN), can be seen as an anti-consumer-protection law, because it scared all of the publicly traded gaming companies out of the U.S. market.  Then prosecutors went after payment processors, making it more difficult for players to find legitimate ways to send their money to betting sites.

Now the feds have seized .com domain names and charged operators with bank fraud.  So, gaming sites are switching to .eu and .uk, and cutting off all physical contact with the U.S.  Even the present American operators can’t be extradited, so what hope is there for the DoJ to bring future foreign operators here to stand trial?

The Grand Jury has been meeting for at least a year.  The criminal indictment against PokerStars, Full Tilt, Absolute and their founders, was unsealed by the U.S. Attorney for New York on April 15, but bore a date-stamp of March 10.  So why now?

Besides the Caesars-888 and Wynn-PokerStars agreements, the Nevada Assembly Judiciary Committee recently approved a bill to regulate online poker.  And the District of Columbia actually made it legal.

The DoJ has been waging a war of intimidation against Internet gambling for years, successfully scaring players, operators, payment processors and affiliates into abandoning the American market.  Lacking the two essentials to any prosecution – a statute that clearly makes the activity illegal and a defendant physically present in the U.S. – the feds have announced showy legal action against easy targets about every other year.

Online poker is not an easy target, since a federal Court of Appeal ruled the Wire Act is limited to bets on sports events.  And tricking financial institutions into processing poker payments seems a technicality, especially since the banks made millions without paying a penny in fines.

But getting a bank to agree to process gambling transactions in return for a $10 million investment is an easier case, if true.  I can understand approaching a small bank – so small that the officer and part-owner who allegedly arranged the deal, asked for, and received, only $20,000 for his “bonus.”  But why would you do this in Utah, of all states?

There are lots of interesting nuggets in the legal papers.  The DoJ claims that one-third of the billions of dollars players deposited went to the operators through the rake.  That number seems high, but if true, it explains why everyone wants to operate an online poker room, with few expenses and no chance of losing to a lucky gambler.

Most of the activities cited occurred after the passage of the UIGEA.  This is a subtle acknowledgment that operators who left the U.S. in 2006 have nothing to fear.

Even if there was a bribe, the feds are still going to have to prove that the poker was illegal.  Since the Wire Act won’t work, prosecutors used 18 U.S.C. 1955, which makes it a federal felony if five or more people do more than $2,000 in business a day in violation of state gambling laws.  The indictment relies on "New York Penal Law 225 and 225.05 and the laws of other states." There is a “thank you” to the Washington State Gambling Commission, indicating that the DoJ is probably going to piggyback on that state’s 2006 law outlawing all Internet gambling, as well.

The Washington statute was upheld by the State Supreme Court.  Still, there are problems.  State laws are presumed not to reach beyond their borders.  And even if Internet poker is illegal in that state, it is quite a leap to seize domain names for the entire country and threaten bank accounts in places like Panama.

The only state with a law better than Washington’s is Nevada.  But basing this attack on Internet poker on Nevada law would look like it was motivated by the landbased casinos.  After all, who are the big winners here?

We will probably see the first attacks on the indictments from the two defendants who were arrested, the Utah banker and the Nevada payment processor who allegedly bribed him, when they fight extradition to New York.  And the poker operators will undoubtedly fight to get their .com names back for the rest of the world.

The operators will never stand trial.  The only U.S. extradition treaty I have found that covers illegal gambling is with Hong Kong.  Calling it bank fraud won’t work, since the defendants can show their local courts that it is based on gambling.  And it is fundamental to all extraditions that the activity be illegal in both countries.  No nation will extradite an individual to be tried for the very activity that that nation licenses.

There may not even be a settlement.  The DoJ accepted $405 million from PartyGaming and one of its founders and $100 million from Neteller and its founders.  But those companies had already left the U.S. gaming markets.  The DoJ will insist on a guilty plea to something, which might kill the operators’ chances of getting licensed when American laws change.  And no amount of money will buy them the right to open up again without a change in the law.  So what would these operators get from a settlement, other than not having to be worried about getting arrested changing planes?

It will be interesting to watch the fallout.  There are a lot of famous American poker players and others who are associated with the indicted operators.  They should be getting their affairs in order.

Meanwhile, like a raid by Elliot Ness on breweries and speakeasies during Prohibition, there are now wonderful opportunities for new operators to fill the vacuum.  Unless, of course, Americans are actually going to stop playing poker on the Internet.


© Copyright 2011, I. Nelson Rose, Encino, California.  All rights reserved worldwide.  Gambling and the Law® is a registered trademark of Professor I. Nelson Rose, www.GamblingAndTheLaw.com.

Saturday, April 16, 2011

The morning after the US Department of Justice launched its weapons of mass destruction at online poker.

Where we are, where we’re likely to be going and what’s it all mean.

Right now the sites affected include PokerStars, UltimateBet renamed recently to UB.com, Full Tilt Poker and Absolute Poker.  As of this moment all of these domains are coming up with this DOJ web page:
4-15-2011 3-17-31 PM
PokerStars has blocked all US customers from playing on their site and Full Tilt Poker has reported that it will make a similar block sometime in the very near future.  There has been no comment from UltimateBet/Absolute Poker. 
It seems as though this insta-blocking of US customers is an attempt to dissuade the DOJ from going after all the poker rooms assets and using Interpol(!) to arrest the lead people from all four sites.  Obviously if this occurs it will mean a giant shakeup in the online poker industry not just for US players but for people worldwide.  Online poker will survive of course but the landscape may look very different in six months then it does now.
Obviously this affects a lot of people not the least of which is MellowYellow (the PokerStars player this blog tracked through most of last year and who finally achieved SuperNova elite status though hardcore 24-table poker playing). They are now unable to play in the US and may in fact lose all the value from their efforts last year.
We are recommending that if you disagree with this DOJ action you immediately contact your congressman and senators.

Friday, December 10, 2010

In General I Like the PPA but COME ON…

Yesterday the Poker Players Alliance www.theppa.org sent out an email talking about the chances that a poker licensing bill or “legalization” bill would pass during the lame duck session of congress.  One bill that is attracting a lot of attention on the www.twoplustwo.com forums is by Senator Reid (a known opponent of online gambling).  In it he includes a 15 month blackout period which means that all the major online poker rooms would be forbidden from servicing the United States for 15 months.  Yes, not a great deal if you depend on online poker for your income!

The PPA said this:

Let me assure you that we have heard and strongly considered the concerns a number of our online poker playing members have raised, specifically regarding the 15 month "blackout period" contained in the draft bills that have circulated in recent days.  The blackout period means that upon enactment of the proposed internet poker law there would be fifteen months where NO licensed Internet poker would be available to U.S. players.  In all likelihood, some of the web sites where you currently play would leave the market so they can go through the process of obtaining a U.S. license and then re-enter the market after the 15 month blackout period.  

Which I found pretty offensive.  After all, why does the PPA event exist if its job is just to pay lip service and then essentially let the chips fall where they may? 

I wrote them an email and it is my sincere hope that you write them one too… Here’s mine:

I received the most recent PPA update including Reid’s bill which would put a 15 month blackout on online poker in the United States.  From your email earlier today:

Frankly, the proposed blackout period is absurd and the PPA opposes it. And we have fought – and continue to fight – tooth and nail against it. But it is a reality. There will likely be a blackout period of some length included in any legislation that is passed, whether it is in this Congress or future Congresses. Our opponents have been throwing their weight around to get a lengthy blackout period included and, unfortunately, I fear they are winning.

That sure  sounds like an organization  that ISN’T really going to fight such a horrible and devastating clause especially for people currently involved with internet poker (especially AFFILIATES of advertisers of online cardrooms as well as those poker players who provide their sole income from internet poker).  For myself an affiliate AND a poker player a 100% blackout of the major sites like Full Tilt, PokerStars and UB.com would financially destroy me.

I hope the PPA does more than play LIP SERVICE to this and fight hard against blackout periods, etc. for internet poker sites.  Whatever goal the blackout period is attempting to achieve can probably be achieved through some other method so let’s get out there and put alternatives on the table.

Kelly Stanonik

http://www.lowlimitholdem.com

Licensing can happen without a blackout period and I have yet to hear one legitimate reason for a blackout period except to punish cardrooms that currently service the United States, even though we do not have a clear internet gambling law. That includes the UIGEA which doesn’t make it illegal for citizens to play and only passed because it was tagged to a critical bill.

My best advice is to join the Poker Players Alliance and then make your voice heard to them that you want legal licensed online poker here NOW without conditions or punishments.

www.theppa.org