Poker Mac

The day of reckoning is here.  The end of ages.

The FBI has seized the domain names of pokerstars, full tilt, ultimate bet and absolute poker, and the US attorney for Manhattan has indicted 11 principals from these sites.

“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. Moreover, as we allege, in their zeal
to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud. Foreign firms that choose to operate in the United States are not free to flout the laws they don’t like simply because they can’t bear to be parted from their profits.”

- Preet Bharara,  US Attorney

FBI Warning at Full Tilt, Pokerstars, AP, UB

The interesting part is that these indictments come in an era of increasing support of online poker.  Although a lot of the firepower against poker has come from the government, it is a bit ironic that the nation’s capital just made online poker legal within the District of Columbia.  In addition there have been quite a few bills introduced that are meant to repeal the very laws under which these online poker site principals were indicted.  In 2009, congressman Barney Frank introduced HR 2267 (The Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009), intended to repeal UIGEA.  In the same year, senator Menendez introduced S.1597 (The Internet Poker and Game of Skill Regulation, Consumer Protection and Enforcement Act of 2009).  Although there was a lot of disagreement in the poker community about Harry Reid’s bill, his Prohibition of Internet Gambling, Internet Poker Regulation, and Strengthening UIGEA Act of 2010, but in the end it was designed to provide long term protection for online poker.  Most recently, congressman John Campbell, along with Barney Frank and others have introduced a new bill, HR1174 (Internet Gambling Regulation, Consumer Protection, and Enforcement Act) to provide for legal online poker.

With advocates and opponents of online poker in a state of equipoise, it was shocking when these measures were taken yesterday.  But not everyone was shocked.  Many in the poker community had heard rumors of the secret grand jury in the Southern District Court on New York.  Ftrain alluded to this back in december.

People who are getting nervous?  Probably Howard Lederer and Chris Ferguson.  Not sure why Doyle’s room didn’t get tagged, but maybe they aren’t worth the effort?

How about this guy? Daniel Tzvetkoff, est. net worth ~ 1 billion, was arrested a year or so ago for similar charges.  The kicker is that he was arrested after the FBI reportedly was tipped off that he was in country by, you guessed it, FT, PS, AP/UB who were in disagreement with Tzvetkoff about recent transactions.  He was incarcerated without bond because his wealth made him a flight risk.  A few months later, he is released, and shortly thereafter all of the online sites he was managing payment processing for were indicted.  If I were this dude, I’d be sleeping with an RPG.

Meanwhile, back in Kansas, all hell breaks loose.  2+2 is aflame.  Affiliates are losing their biggest market.  Girlfriends, wives and mothers everywhere are saying “I told you so”.  My client hasn’t been closed yet, and I am still sucking out on the river on Full Tilt.  Sorry ’bout that.

Bill would bring Billions in tax revenue and protect consumers.

Robert Menendez, Democratic Senator from New Jersey, took time out from his work trying to help reform our healthcare system, to introduce senate bill S.1597. The goal of this bill is to legislate online poker in the U.S. with the goal of increasing tax revenue and provide protection from less reputable sites.  The full text of the bill has been uploaded to scribd.  The PPA is undoubtedly excited about this development.

Does this bill have a chance of passing?

A key question.  As many know, Barney Frank of Massachusetts, introduced a separate bill to the House of Representatives back in May.  That bill did not get the traction that we are all hoping Senator Menendez’s bill will achieve.  Perhaps with a worsening recession, a few of the brighter minds on the capitol will open up to the revenue generation possibilities.  After all, why shoud all of our rake go to Malta, Gibraltar and the Isle of Man.  Can’t we allow Howard and Dolly to run their rooms in piece and pay taxes to Uncle Sam as a bonus to all Americans.

What does this mean for online poker in the U.S?

A bit unclear.  Thinking back to the days before UIGEA, it seemed as though the unregulated poker world brought on a boom that filled card rooms with new players.  What is unclear to me, is whether loosening restrictions on U.S. online poker will have any effect on brick and mortar poker.  It seems the recession would outweigh any effects of a lifting of the UIGEA.