Pokerpocalypse 2011: General

It's amazing to me that with everything wrong in the US, especially the economy, the government is so concerned with cracking down on real money online poker. Especially when you consider the banker and Wall Street criminals that caused the economic collapse have all gotten off not only totally free, but they're still living the high life.

We have a government that's so concerned with the freedoms of people in other countries (Iraq, Afghanistan, Libya), shipping off our troops or sending other aid. Yet, at the same time that same government is constantly eroding and taking away our American freedoms regularly.

Ultimately, this indictment is typical grandstanding from the NY DA's office.

Here's a simplified history, so that this whole thing makes sense to people that don't play poker. Much of the above happened before I started playing, and I am trying to keep it very simple.

In 2006, a new law was passed called the UIGEA (Unlawful Internet Gambling Enforcement Act). It basically is a variation of an old law called the wire act, that made making wagers over phone lines a criminal offense. Like many laws that were unlikely to pass on their own, this law was attached to another "must pass" bill to get it through. That's how a lot of laws are passed in the US. For instance, say you wanted to get a law passed that said nobody could eat chicken on Sundays. Well, there's no chance that law would get passed on it's own. So instead you attach it to another law, like one that prohibits people from beating children with a baseball bat. Well, nobody would vote against a law preventing that from happening. So then we get two laws, one good, one stupid. That's how the UIGEA got passed, by getting attached to a homeland security bill.

There are a few people against gambling. The religious zealots that are against gambling because it's a "sin". The Vegas casinos (and I'd imagine the Native American casinos) were in favor of the bill because of fears of competition. States want to protect the lottery (which has far worse odds of ever winning than any poker game ever could).

The main aim of the bill was eliminating online sports betting. But it would also cover things like video poker (not actual poker), and other games of chance.

The poker-only sites argument is that poker is a game of skill. That's why, for example you see THE WORLD SERIES OF POKER (and other poker shows) on ESPN and other channels. You don't see the World Series Of Slot Machines or Roulette. Yes, there is an element of luck involved in poker, but it's more skill than anything else.

The main effect of the bill was that it would become increasingly difficult to deposit and withdraw money to and from poker sites. This will be important later, because it's where the "money laundering" charges come in.

In 2006, Party Poker was the biggest site around. Due to pressure from the US government, they pulled out of the market. PokerStars and Full Tilt, among others, filled the void, serving US customers. Their position after speaking to lawyers was that they could continue to legally serve US poker players. That was the status quo for years. In the meantime there were delays as to when the UIGEA was to be enforced by banks. While many US banks started complying before they had to, the law didn't fully take effect until June 1, 2010.

As more and more banks and credit card companies refused to transfer funds to poker sites or honor payments made from the sites, the sites had to switch payment processors. Now, apparently in some cases, some banks wanted bribes to continue to do poker transfers. Some of the third party processors also would use a different name or state a different purpose for the transaction, disguising it from being shown as a poker-related transaction. This is where, I'm assuming, the DOJ gets "money laundering".

However, and I think this is a relevant side point, the online poker industry are hardly the only ones to do financial transactions under a different name. Porn sites do this all the time. If you pay out to them, you're not going to see Bangbus.com showing up on your credit card statement. This can't be much different than PokerStars issuing a check that doesn't say PokerStars right on it.

Remember, the position of the sites was that playing real money poker online isn't illegal, due to poker being a game of skill. Stars and Full Tilt want poker to be regulated in the US, they want to be licensed here. The UIGEA is vague and unclear on whether or not poker is "illegal gambling". It appears that the DOJ is saying that it is.

Now, what reportedly sparked this off is that Stars, FT, and Ultimate Bet shared a common processor and he was skimming off the top, ripping the sites off. The US was after this guy for doing payment processing for online gambling. FT and PS told the US government where this guy would be, the government picked him up and he turned right around and ratted out the sites. He goes free and the US government with their new powers of being able to seize any domain name they like, without any due process, seize the domains.

Stars, who again, want to be licensed here if/when any legislation occurs to make poker 100% no grey area legal in the US, were the first to cut off US players. Full Tilt followed soon after.

Now there are tons of players, some with 6+ figures sitting in their accounts, unable to play or access their money. I feel really bad for the pro players who filed their taxes and were counting on a cashout to pay their tax bills. What are they going to tell the IRS? "Sorry, you'll have to talk to the DOJ about that?" The IRS is like that bit in GOODFELLAS, "Business bad? Fuck you, pay me. Oh, you had a fire? Fuck you, pay me. Place got hit by lightning, huh? Fuck you, pay me."

It'll be interesting to see how this plays out. If anything, I think the sites, who make money hand over fist were stupid for not buying some politicians like every other big corporation does. This wouldn't even be an issue if they were Goldman Sachs.