U.S. Online Poker: The Shit Has Hit the Fan
Friday, April 15, 2011 at 03:00PM Wall Street Journal: NY prosecutors: 3 online poker houses busted
Authorities in New York City [have] unsealed an indictment charging 11 people with bank fraud and illegal gambling in a prosecution of the three largest Internet poker companies.
...
They've identified the companies as PokerStars, Full Tilt Poker and Absolute Poker.
My Initial Thoughts
This story is developing rapidly, but it seems to me that this will likely become the biggest story in modern poker history -- bigger than the UIGEA, and bigger than Moneymaker.
Having said that, this isn't the end of the poker world. Poker has been around for more than a century, and it will be around next week. I expect the WPT Seminole Hard Rock Showdown to be fairly unaffected (though some players may choose to play or not play based on today's news), and the WSOP will still be the event we all love (and love to hate).
Of course, the field size for the WSOP Main Event could be dramatically affected, as online satellites in the U.S. may immediately disappear, and people who have already won seats may have trouble accessing their funds.
What Happened, Exactly?
Here's a quote from the indictment (you can read it for yourself here in PDF format):
Manhattan U.S. Attorney Preet Bharara said: "As charged, these defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits."
There are 11 individuals named as defendants, seven of them listed as U.S. residents. The defendants fall into two categories; some are charged as owner-operators of the online poker sites, and the others are charged on the payment-processing side.
Online Poker Operators: Isai Scheinberg & Paul Tate (PokerStars); Raymond Bitar & Nelson Burnick (Full Tilt Poker); Scott Tom & Brent Beckley (Absolute Poker)
Payment Processors: Ryan Lang, Ira Rubin, Bradley Franzen, Chad Elie, John Campos
It's worth noting that Howard Lederer was not named in the indictment, despite the fact that he was recently named by Bluff Magazine as the most powerful person in the poker industry and has long been rumored to be a primary founder of Full Tilt Poker.
Some people on Twitter and the poker forums have reported that they've seen a Department of Justice seizure notice when trying to access the homepages for the affected online poker sites. Personally, I can access the sites normally, but the sites may have found a temporary workaround.
More recent reports (like this one on Twitter from poker pro Jon Aguiar) are that PokerStars is turning away U.S. customers from real-money games. Other U.S.-facing sites may follow suit soon.
Expect a run-on-the-banks atmosphere as online players do what they can to cash out from the affected sites. (I really hope that Vanessa Selbst and Jason Mercier got paid in cash for their recent NAPT victories.)
This story is still developing, and mainstream news sites are only now breaking the story with short articles that simply quote the indictment. Expect to see a lot more information on this topic over the weekend. I recommend keeping an eye on Pokerati.com, which excels on legal topics like this. If I see any major details emerge today or over the weekend, I'll post again.