Home > Blog Post > The End of Online Poker….for now.

The End of Online Poker….for now.

DOJ

The U.S. is finally going after the online poker money.

Black Friday.

That’s what they’re calling it.  I think that the name sucks personally.  Not that I have a replacement for it mind-you, but when I hear “Black Friday” I immediately think the day after Thanksgiving when all the sales go up.  This is NOT a sale.  This is….well….I don’t know exactly what this is…but I do know that it sucks something awful.

On Friday, the Southern District of New York unsealed indictments against 6 heads of major online poker sites (2 each from PokerStars, Full Tilt Poker, and Absolute Poker/UB), and 5 online payment processors.  The charges include 11 separate counts of criminal charges such as violation of the Unlawful Internet Gambling and Enforcement Act, Bank Fraud, and Money Laundering.  As part of the process, the FBI swooped in to shutdown the online poker sites for U.S. Players, seized their bank accounts to freeze their funds, and made a couple of arrests.  Basically, they scared the stuffing out of the day after Poker Thanksgiving (yeah…I went there, lame…I know).

What it means for us U.S. poker players is that we can’t really play online poker anymore because we live in America.  Our Government has determined that the “Land of the free and home of the brave” means “Don’t sit at a laptop and play poker anymore.”  How this hurts people in some way, well…feel free to let me know, but it tells me that this isn’t harming ANYONE and that it can only be about one thing.

Full Tilt and Stars are the only two sites that I ever played on with regularity, though I also have some funds on Lock Poker and on Carbon, which turns out, were not shutdown.  The money that I have on Stars and Tilt is still there when I log in and look at the cashier, and I have faith that I’ll be able to collect it at some point, but probably not likely until after these court cases complete and shed some light on the situation.  When that will take place?  Well, get out a calendar and circle a few dates.  I’ll run a pool.  Probably somewhere between tomorrow, and when the Cubs win the World Series and the Clippers win the NBA Championship in the same year.  Go ahead and start guessing.

I’ve had a few days to reflect on this, and I’ve had a bunch of people ask me what this was all about.  The short answer shouldn’t shock anyone.  This isn’t about a crime, it isn’t about legal or illegal, and it isn’t about protecting the lives of American’s by doling out the strong arm of justice.

THIS IS STRICTLY ABOUT MONEY.

Since 2002, the U.S. Government hasn’t had the ability to collect a penny from the online poker industry and they are sick and tired of not getting their “share.”  While they tried to shut the banks down from dealing with the sites by passing the UIGEA in 2006, it didn’t stop the online sites from growing at a rate that makes Usain Bolt look slow on a track and field course.  The 2003 World Series of Poker win by Chris Moneymaker launched an online poker BOOM like a cannon that shot across the globe, and saw online poker become a multi-billion (yes…that’s with a “B”) dollar a year industry faster than anyone could have ever imagined.  It’s hard to say just how big the industry is, but think Microsoft, IBM, AT&T, Goldman Sachs.  Put them together, and you have the industry.  Somewhere near that big.

The U.S. Government has been getting a grand total of none of that action.  In fact, with the implementation of the UIGEA in 2006, the big companies packed bags and said “Well, if Uncle Sam doesn’t want our cash, then we’ll just go to another country that doesn’t mind taking it.”  They set up shops in places like Dublin, Ireland, Costa Rica, and The Isle of Man (which I have to admit, I’d have to look up where that one is, because I honestly have no clue).  In these other countries, the companies continued to service U.S. customers and figure out ways to have the banks send in deposits from U.S. poker players to their banks.  And the industry grew like Barry Bonds’ neck on Steroids, swelling like crazy with scores of thousands of players depositing online to play a game that they loved.

Finally, some 5 years or so after enacting the UIGEA, and the U.S. failing in every attempt to put together some kind of law that gave them a piece of the pie, and all the companies having abandoned ship with their U.S. office spaces because of the ridiculous laws that have been put forth, the Government figured out a way to try and get the money that they’ve missed out on all this time.  A few billion dollars seemed like too good of a score to pass up and someone just took a page out of the California mindset saying, “Well, let’s just sue the bastards.”

The indictments are about the cash.  They’re seeking the billions that they’ve lost in failure to be able to tax these companies and packaging it up by blaming only SOME of the companies that are serving the U.S.  They’re only going up against the biggest companies, the ones that have the cash.  The U.S. Department of Justice comes off looking like an ambulance-chasing-attorney going after the deep pockets, and ignoring the ones that would probably just fold their tents if real litigation knocked on their doors.  Let’s face it, the ones that they left alone are all smallish and frankly, they’re awful.  But this isn’t really about the UIGEA at all.  The U.S. is trying to pin bank fraud and evasion on these poker companies because they can’t figure out how to get their act together on Capitol Hill, and pass laws that actually make sense.  Kind of like how they couldn’t pin Al Capone on anything illegal even though they knew he was a mob boss, so they had to get him on tax evasion instead.

The big mistake that the online poker sites made was in their deposit system.  It was shady, and they got pegged for it.  I haven’t deposited on an online poker site since 2009, so I don’t have the experience that other people have had regarding the difficulties in getting U.S. money on the site.  I gave them my ATM/Debit card back then and it went right through without issue.  Withdrawals were easy as well and went right to my account.  No problems.  But getting money on was the big problem that most American’s faced as none of the banks wanted to approve the transactions with the UIGEA looming.  So the online poker rooms created these shill organizations that became 3rd party processors to get cash on to circumvent the UIGEA.  It was a big “no-no” and they’re getting a proper spanking for violating a rule.

I don’t know if the charges will stick, but the more that I read about the indictment, the more that I think that online poker is going to be gone for quite some time.  And by that, I’m talking in the form of years rather than months.  I mean, it’s been 9 years since online poker was first created and the U.S. Government still hasn’t figured it out yet.  Politicians today will stand on Capitol Hill and one will claim it’s legal, the next will claim it’s illegal, and the rest will say “how much money will you pay me to sit on either one side of the fence or the other?”  The anti-gambling crowd is big enough that getting legislation passed that licenses and regulates online poker just seems like it’s about as likely to take place as President Obama is to sit down and have dinner tomorrow night in my living room.   I’m hopeful that will change eventually, but when is really anybody’s guess.

For me personally, it’s scary times.  I’ve had more work the last couple of days by supplying news articles about what’s going on, breaking it down, and keeping people in the loop.  My poor phone has worked overtime during the ordeal.  But for me….I just want to play, and I don’t know when the articles will run out, though I know it will be soon.  And I don’t know when the ancillary income will dry up, but I see that taking place shortly with all the big companies that have provided compensation through advertising dollars disappearing in the U.S.  I mean, why on earth would they spend any money developing a client base that they’re now no longer going to be able to serve?   I’m not nearly as impacted as some people in the industry, but it tells me that the likelihood of me being able to make a living within the poker industry is basically nill.

I guess I’ll see what doors open for me now.  But I’ll sure miss this industry, the game, and all the people.

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  1. Gijoevaldez
    April 18th, 2011 at 04:53 | #1

    Awesome blog bud… good luck and I’ll see you at the casinos… maybe… now where is that number to the head hunter? :)

  2. Mark
    April 18th, 2011 at 08:59 | #2

    I tend to agree. Its over, and it won’t be back anytime soon. When it does come back, the structure will so mutated we won’t recognize it. The rake and taxes will be prohibitive. Account verification will be a drag…have you bought canned air (computer duster) lately? I have to sign my name and verify my address for fucks sake! Anyway, I’m over it and moving on. GL all!

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