A black friday for poker and, grey days yet to come

As I'm sure everyone has heard by now, the founders of PokerStars, Full Tilt Poker, and Absolute Poker were indicted on charges based on the Illegal Gambling Business Act of 1955 and the Unlawful Internet Gambling Enforcement Act of 2006 this past friday. The charges include: bank fraud, money laundering, and illegal gambling.
There were also restraining orders issued against over 75 bank accounts used by the online poker companies and their payment processors, as well as five Internet domain names.

During the course of the investigation, apparently using information gained from making a deal with Daniel Tzvetkoff, the former head of a payment processing company named Intabill that processed transactions for the online poker companies, the Department of justice gained evidence that it believes would prove that the poker sites conspired to defraud U.S. financial institutions by disguising transactions used for Internet gambling as something else to circumvent the UIGEA.

Because U.S. banks and credit card issuers were largely
unwilling to process payments for internet poker after the enforcement of UIGEA in June 2010, the DOJ believes that the Poker Companies used fraudulent methods to trick them into processing payments on their behalf.
For example, defendants ISAI SCHEINBERG and PAUL TATE of
PokerStars, RAYMOND BITAR and NELSON BURTNICK of Full Tilt Poker,
and SCOTT TOM and BRENT BECKLEY of Absolute Poker are accused of arranging for the money received from U.S. gamblers to be disguised as payments
to hundreds of non-existent online merchants.

According to the indictment, the Poker Companies also worked with an array of highly compensated "payment processors" including defendants RYAN LANG, IRA RUBIN, BRADLEY FRANZEN, and CHAD ELIE, who supposably obtained accounts at U. S. banks on the Poker Companies behalf and, then lied to banks about the nature of the financial transactions they were processing, as well as covered up those lies by,
among other things, creating phony corporations and websites.

after U.S. banks and financial
institutions detected and shut down multiple fraudulent bank
accounts used by the Poker Companies, SCHEINBERG and BITAR changed strategies. Instead of lying to the banks, PokerStars, FullTilt Poker, and their payment processors persuaded the principals of a few small, local banks
facing financial difficulties to process the payments in return for multi-million dollar investments in the banks.
Of the billions of
dollars in payment transactions that the Poker Companies tricked U.S. banks into processing, approximately one-third or more of
the funds went directly to the Poker Companies as revenue through
the "rake" charged to players at the poker tables.

The crimes carry heavy sentences, with bank fraud being the most serious one with a possible penalty of up to 30 years in prison and fines up to $1 million. I don't agree with what the poker companies have done. There should have been a way to do this without Breaking the law , but on the other hand There's no victim here. The poker sites have not stolen anything from anyone. If crimes have been committed, it was done with the good intentions of running legitimate business through unreasonable government interference.

The UIGEA is in my eyes totally rediculous. Poker is not a crime and, should not be treated as such. The poker companies do earn revenue in form of rake, but so do the land based casinos and, nobody's trying to ban them. How can you allow one and not the other? Besides, the U.S. government sanctions activities such as the lottery and stock market, which are much bigger gambles than poker, as they don't require the skill that poker does. Now don't think for one second that I'd imply that the UIGEA came in to play because it's easier for the government to get their cut of the revenue in form of taxes from the land based casinos.. Ahem....

The indictment is not only hurting the poker companies. It is also having a terible impact on all the players who are having trouble to withdraw their funds. Not to mention that U.S. Players will no longer be able to play on neither FullTilt nor PokerStars. There are still other companies where U.S. players are allowed, Such as

But Hundrads of thousands of players have already lost their only source of income. Others will only lose their recreational outlet, but that is taking away from a persons freedom as well.

One's gotta put blame where blame is do and, there's no doubt that the poker sites has a responsibility here, by making it possible for the government to shut down their U.S. activity, but this proves more than anything that the U.S. government needs to take action, not by hunting down the owners of the poker companies, but by regulating, regulating, regulating online poker!

It is the only way to protect the players and, that is after all the purpose of the UIGEA, right? Not to mention that there's no doubt that the U.S. economy would benefit immensely from these extra earnings. It has been on the verge of collapse for quite a while now...

Now is the Time for the Poker Community to Stand Strong and take action for Our Rights

The Democrats Lost Control of The House; what happens to the prospect of poker legislation?

On Tuesday, voters in the United States went to the polls for midterm elections. The entire House of Representatives and one-third of the Senate were up
for grabs and, when the polls closed, it became evident that the Democrats would be losing control of the House.
According to Yahoo News, Republicans will have at least 240 seats in the House come January. What affects will this have for the prospect of poker legislation?
the Financial Services Committee has been largely responsible for bringing pro-internet gambling bills to life including Frank’s HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The measure was marked up in the Committee in July, but has not yet been addressed on the House floor.
internet gambling champion Barney Frank (D-MA) was reelected by a 54% vote. However, Frank will likely lose his post as Chairman of the Financial Services Committee, now that the Democrats have lost control of The House. According to John Pappas, PPA Executive Director, the PPA has done a
good job of recruiting others on that committee however, so there's still hope. It’s unclear who its new Chairman will be, but it looks like it will be Spencer Bachus, and Even he and his staff would contend that there needs to be review of how the government addresses internet
gaming. Not even Bachus can say with a straight face that the
UIGEA has been a successful piece of legislation.
Find out why
Whether internet gambling and online poker will be addressed before 2010 is through
remains to be seen. Bachus ran unopposed in Alabama and currently serves as the Ranking Member of the House Financial Services Committee. Now, Bachus and other sitting lawmakers
will likely return to Capitol Hill for a so-called “lame duck” session. The Executive Director of Poker Player Alliance, has said that the best opportunity to get something done in 2010 would be during the lame duck session, and they're still moving in that direction.
New blood in Congress is good for the chances of poker legislation. The PPA has had success before, when they've had the chance to educate members who recently have come into Congress, and january 2011 should be no different. the PPA will be able to get players and members in their districts out in front of them. Whether Republican or Democrat, when you spell out the issue and it’s backed up by calls, it becomes important.
Read more here
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US Law Against Online Gambling Makes It the Biggest Loser

I don't usually like to copy other peoples work, but I think that the following article on online gambling in the US, written by Peter S. Vogel, provides answers to most questions on the subject. I've Therefore decided to post it here. .

Who is Peter S. Vogel?
E-Commerce Times columnist Peter S. Vogel is a trial partner at Gardere Wynne Sewell, where he is chair of the eDiscovery Team and Chair of the Technology Industry Team. Before practicing law, he was a systems programmer on mainframes, received a masters in computer science, and taught graduate courses in information systems and operations research.

US Law Against Online Gambling Makes It the Biggest Loser
With little fanfare or warning, in 2006, the U.S. enacted the Unlawful Internet Gambling Enforcement Act (UIGEA). This legislation outlawed Internet gambling and restricted how financial institutions could pay monies to Internet gambling sites.
The UIGEA resulted from four major policy concerns of the federal government.
First, the Internet was too easy a venue for compulsive gamblers.
Second, the age of Internet gamblers could not easily be determined, and underage gambling could not be controlled as with a brick-and-mortar casino.
Third, a lack of regulation of Internet gambling made it easy to defraud gamblers and rig the odds.
Fourth, the anonymity of the Internet made online gambling a medium for potential money laundering.

How Internet Gambling Works
Users locate websites on which they want to gamble, for example

tThen they download software to their computers. Once the gambling software is downloaded to the gambler's computer system, a personal account is set up; it includes name, home address, valid email address, date of birth and other personal information. Because most employers have policies against using computer time, computer resources, and Internet access for such activities, most Internet gambling generally operates from home computers.
The UIGEA restricts credit card companies and banks from transferring monies for gambling. To get around the legal restriction, Internet gambling sites require gamblers to set up e-wallets -- online accounts in which monies may be deposited. E-wallets may be used generally for purchases on the Internet, including gambling.
The e-wallets draft monies from consumer bank accounts, credit cards and debit cards, and then route the monies to merchants or gambling sites. Generally, e-wallets are based and regulated outside of the U.S., which takes Internet gambling monies outside of the U.S. business flow and, accordingly, outside of the regulation of the U.S. and the states.

What Happens When Gamblers Win? Or Do You Understand Terms of Service?
Let's see a show of hands ... how many of you regularly read Terms of Service before clicking "I Accept"? My informal poll says about 1 percent. Website Terms of Service are generally enforced in courts around the world. However, if specific Terms of Service violate laws or public policies, then those specific terms may be unenforceable.
Generally, the Terms of Service for a gambling website include adherence to the laws of a country where gambling is legal, which makes perfect sense. However, if the casino website fails to pay a winner, that winner cannot go to courts in the U.S. to collect, since online gambling is illegal. The winner could go to the UK, Aruba or Bermuda, or to the locale stated in the terms of service. It may sound romantic, but it could cost more than it's worth to make the trip -- not to mention payment of litigation fees.

Gambling Is a Social Issue - Subject to Regulation
My view is that law is the glue that helps hold society together. What's acceptable in New York may not be acceptable in my home, Dallas, or in London, Moscow or Beijing -- and vice versa. Statutes established by governments legalizing or criminalizing in-person or Internet gambling are part of the social framework.
One only need look at the state gambling laws in Nevada and the adjacent state Utah. Nevada's regulation of casino gambling is a model of government regulation, while just across the border in Utah there is no gambling at all. Other states adjacent to Nevada, like California ,do not permit gambling except in an Indian casino, which of course must be on an Indian reservation and regulated by federal law.

Was the UIGEA Effective?
If people want to gamble, they will find a way. Note the proliferation of gambling on sporting events, horseracing, casino games or real-time poker. Without people's desire to gamble, cities like Las Vegas would not exist. Gambling on the Internet is merely another medium for this activity. So it should be no surprise that outlawing Internet gambling in the U.S. has not stemmed the tide of Internet gambling, but rather merely changed its venue.
While publicly traded Internet gambling companies were devastated, most Internet gambling sites simply moved out of the U.S. and provided links to new offshore sites where online gambling is not regulated.
Apparently, neither the UIGEA nor other federal laws explicitly prohibit Internet poker. Internet casinos promote poker as a game of skill rather than a game of chance. For example, games of chance include lotteries, while games of skill include chess and checkers. Unless outlawed specifically, government cannot stop these games. As a result, Internet poker has grown significantly -- much to the chagrin of anti-gambling forces.

Internet Gambling May Be a Great Source of Tax Revenue
Given the tough economic times in 2010, members of Congress are now rethinking the UIGEA so that Internet gambling would be regulated and become a source of tax revenue. A recent New York Times report indicates that over the next 10 years the U.S. federal government could yield as much as US$42 billion from Internet gambling taxes. Given the tough economic times, it is difficult to ignore such large tax revenues.
The last time the U.S. government studied Internet Gambling was in 2002, when the General Accounting Office (GAO) issued a report to Congress entitled "Internet Gambling - An Overview of the Issues." The GAO estimated more than $4 billion in gambling revenues in 2003 -- but of course, no one actually knows how much money is wagered on the Internet.

Conclusion: Take Control
The Internet, which started one of the greatest social changes in the history of humans -- a portal without boundaries of geography or time, has also made gambling easier than ever. However, due to its underground nature, Internet gambling probably causes more problems and costs more money than it is worth.
So it is time for the U.S. government to acknowledge that Internet gambling is here to stay, and regulate it in a way that gives it some degree of control.

Commerce Casino sells all poker player's rights down the river

Commerce Casino, Established in 1983, is a cardroom located in the Los Angeles suburb of Commerce. With over 240 tables on site, Commerce Casino is the largest cardroom in the world.
In addition to the main cardroom, the Commerce Casino complex includes a full service 200 room Crowne Plaza Hotel, which houses dining establishments, a day spa, beauty salon, pool and sundeck, banquet rooms, shops and entertainment. The Commerce is also home to several restaurants and host to live boxing and MMA events.

It is disheartening that one of our own in the poker community is opposing good public policy that will keep players safe and preserve our rights to play poker online. But by testifying before Congress in opposition to HR 2267 -- where Commerce Casino allied itself with those seeking to ban online poker across the nation -- their organization demonstrated complete disregard for every poker player who has ever patronized their establishment.

It is important to note that with the rise of online poker, many individuals hone their skills online before they enter establishments such as the Commerce Casino – increasing traffic to poker rooms nationwide.

HR 2267 will create a U.S. regulated online poker framework, requiring all online poker sites to measure up to strict safety and consumer protection standards – requirements that do not exist today. More importantly, this bill will create an open and competitive market, giving players a choice of many sites on which to play against others from across the country and the world. This bill also includes language allowing states to opt out of this legislation while providing appropriate safeguards to ensure Indian tribes retain their current rights regarding gaming.

,all dedicated poker players, both online and live, both professional and amateur, are extremely disappointed in the position Commerce Casino has taken in opposition to federal legislation to license and regulate online poker. their opposition puts their own narrow corporate interests ahead of the interests of America’s poker players.

Further more It's a rare case of hypocrisy. For while their testimony before the House Financial Services Committee criticized federal legislation and regulation of online poker, Commerce Casino is actively promoting legislation to create a segregated, California-only online poker network. That proposal would create a monopoly that would harm California’s poker players by severely limiting the pool of players against whom they could play as well as the options for sites on which they could play. It could also set the stage for other states to follow suit, possibly resulting in a balkanized online poker world, where players across the nation would be limited in their choices of where and against whom they could play.

Is Online Poker illegal in the U.S?

The Unlawful Internet Gambling Enforcement Act (UIGEA) was made a law in 2006, and began being enforced on the first of June 2010.

The UIGEA basically states, that it is illegal to place a wager or bet, or recieve a wager or bet online , where it is unlawful under any law to do so.

This means that the US-players are not able to deposit via creditcard, due to the blocking of there transactions by banks or other financial institutions. There are however often options available for american players as well.


The poker sites atempted to combat this by creating .net sites that would offer just play money, but the players would still in turn be able to make a deposit through other methods.

Since the implimentation of the UIGEA we have not seen a huge drop in poker traffic acrossed the poker world, and there are many groups, such as the Poker Players Alliance, the ppa, that are atempting to get poker legalized and regulated in the US .

Part of the PPA's mission is to protect and to advocate for the right of poker players to play online. former U.S. Senator Sen. D'Amato's is a member, and his responsibilities include Congressional lobbying. In April 2008 the PPA claimed over 1,000,000 members.

Since the passage of UIGEA, several members of the United States Congress have introduced bills to overturn or revise it.
To sum all of this up, it is not, and has never been illegal to play online poker. The only thing that gives players trouble ,is depositing on a given site.