Black Friday Poker
On April 15th of 2011, the founders of three of the biggest online poker rooms – Absolute Poker, Full Tilt Poker and PokerStars – were indicted by the US Department of Justice. The charges filed against the founders were for illegal gambling, money laundering and bank fraud. Restraining orders were issued against more than seventy five bank accounts used by payment processors and the poker companies that hired them. Following the indictment, a press release was issued by the Department of Justice. Eleven defendants were named in the statement. Among them were John Campos, Chad Elie, Raymond Bitar and Ira Rubin.
Defendants Guilty of Fraud and Misleading Banks
According to the press release, the defendants were guilty of carrying out a fraud scheme and misleading and/or bribing a few banks in the US to make billions in profit through their illegal gambling companies. The charges were brought against the defendants on the basis of the Unlawful Gambling Enforcement Act (UGIEA) of 2006 and Illegal Gambling Business Act (IGBA) of 1995. The UGIEA does not permit companies to accept payment for illegal gambling activities. Both, defendants and their poker companies were requested to pay around $3 billion in penalties. Two defendants in the US at the time of the indictment were arrested on Black Friday.
Poker Industry Says Legalizing Online Poker a Necessity
A few hours after the indictments were issued, PokerStars blocked players from the US so they could not make real money payments on the site. At this point, many from the industry stated that the incident was an indication that legalizing online poker was crucial to protecting players. This view was supported by an association called Safe and Secure Internet Gambling Initiative, which promotes the fact that individuals are free to gamble on the internet.
The executive director of the association also stated that with the government eager to shut down US poker sites, there was a need for regulating and legalizing online poker. This was also the opinion of Poker Players Alliance (PPA), a non-profit group in the US that stands for political advocacy. The chairman of PPA, Alfonse D’Amato, a former senator, stated that despite the drastic measures taken by the Department of Justice, the group will fight for the rights of people in the US to play poker.
Online Gambling Deals Fall Through
Prior to the Black Friday poker incident, poker sites like PokerStars and Full Tilt Poker had entered deals with some of the top land-based casino operators. PokerStars had signed an agreement with Wynn Resorts, and Full Tilt Poker with Fertitta Interactive. However, following the incident, the deals fell through.
Full Tilt Poker and PokerStars Show Commitment to Following Federal Law
Hours after the indictment, Full Tilt Poker suspended its real money games for US players. It continued to offer poker games through peer-to-peer provisions for players outside the US. According to a statement from the poker room, its management was of the opinion that playing poker on the internet was legal. The company stated that it was dedicated to ensuring that its actions were in accordance with the law and directed at maintaining the integrity of poker.
PokerStars issued a statement highlighting the fact that poker players’ money was safe. The poker room operator clarified that though its real money games had to be suspended to players in the US, its services were still accessible in other markets. Also, within a few days, PokerStars moved to a different domain name and started a new email to provide support to players. This was reassuring to members of the poker site. The company also informed players that as it was receiving numerous mails following the incident, response times would be delayed.
Some of the most highly anticipated poker tournaments like the Onyx Cup by Full Tilt Poker, and the Million Dollar Challenge and Big Game by PokerStars were cancelled.
More Trouble for PokerStars
Despite taking these measures, sites like ESPN, which have sections dedicated to poker, took down advertisements of the poker sites that had been indicted. Also, a day after the incident, Greg Brower brought to light the fact that PokerStars had made monetary contributions to political activities that were taking place in Nevada at that time.
According to federal law, foreign companies like PokerStars are not allowed to make such contributions to US state political activities. The association that received the money from PokerStars had to return $300,000 to the poker room.
Other Poker Rooms Leave US Market
In the months after the Black Friday poker incident, several other poker rooms left the US market. Most did this as they were concerned that the Department of Justice would shut them down too. Towards the end of 2011, there were positive developments in the area of online poker. One was that Full Tilt Poker, whose license was revoked in September by the Alderney Gambling Commission, found a buyer.
Groupe Bernard Tapie entered discussions with Full Tilt Poker and the Department of Justice to buy the poker room and offer games to players in the US. Also, the Department of Justice changed its opinion on online poker. It stated that the Wire Act, on the basis of which the poker sites were shut down, prohibits only online sportsbetting, not online poker.
US Poker Options After Black Friday
With poker associations like the PPA standing up for players’ rights, industry watchers were hopeful that online poker would be legalized in the US. This encouraged several online gambling companies that had left the US market, to re-enter. One of them was Merge Gaming Network, which relaunched its sites for players in the US in October. Of the skins it powers, Carbon Poker is the best. It enjoys the highest player traffic.
Another site that players in the US can opt for is Bovada Poker. The poker room was formerly Bodog Poker, a site that was among the best but left the US market following the Black Friday poker scare. The site was rebranded as Bovada Poker specifically for the US. The next best poker site for US players is True Poker. Like Carbon Poker, True Poker started accepting players from the US when the network on which it runs, rebranded from Yatahay Network to Winning Poker Network.
Currently a few states in the US have got state-level approval to have their bills for legalizing and regulating online poker passed. They are awaiting a sanction at the federal level.
Bitcoin Poker Emerging
Recently, more and more Bitcoin poker sites have emerged, providing real money poker wagered in the popular crypto-currency called Bitcoin. Players can simply deposit and withdraw bitcoins in the poker client and many sites don’t even ask for more than a nickname and an email address, allowing players to remain anonymous. Several of the most popular rooms accept US players, you can see this list of Bitcoin poker sites for more information.