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The day online poker died

15 April 2011

Senate Majority Leader Harry Reid (D-Nev.) told Steve Wynn that online poker was "as American as apple pie" in an effort to convince the casino mogul that he should be in favor of regulating the game.

If that's the case, April 15, 2011, may be remembered as the day that online poker died.

So bye, bye, Miss American Pie.
Took my gutshot to the river, but the river was dry.


The United States Attorney for the Southern District of New York unsealed an indictment Friday morning charging 11 people, including the owners of PokerStars, Full Tilt Poker and Absolute Poker, with bank fraud, money laundering and illegal gambling offenses. The sites' domains have been seized and 76 bank accounts in 14 countries have been frozen in an attempt to collect $3 billion in civil money laundering penalties.

I had been covering the online gambling industry for about eight months when the Unlawful Internet Gambling Enforcement Act passed in Congress in October, 2006. I was in shock at the time, worried that the money that I had online wouldn't be accessible to me, and wondering if I'd ever be able to play online poker again.

It turned out I didn't have much to worry about at the time. The sites that shut out U.S. players (e.g., Party Poker, 888 Poker) paid their American players in an orderly fashion. Many of my friends, who used to play online all the time, shut down their accounts and cashed out for good, while I (and tens of thousands of other Americans) continued to play on the sites that didn't leave the U.S. (namely, PokerStars and Full Tilt). In the aftermath, PokerStars and Full Tilt grew immensely as the market underwent massive consolidation. They reveled in their growth, all the while saying that the UIGEA didn't apply to them, since Internet poker is a game of skill and not gambling.

And they were probably right. While the Southern District of New York rolled out indictments against payment processors and online sports betting operators, it seemed that Internet poker sites were immune from prosecution. Until now.

Every lawyer I've talked to about online gambling in the U.S. has said that the Department of Justice hadn't gone after online poker companies because they weren't sure they'd win a case where they argued that:

1. Outside of sports betting, the Wire Act applies to online gambling,
2. Poker is gambling and not a game of skill.

But if they can charge online poker sites with money laundering, well, all bets are off.

So as a small stakes, recreational online poker player, how do I feel about what happened today?

Well, first of all, I'm not worried that I'll lose the funds in my online poker accounts. PokerStars and Full Tilt Poker both have a sizeable presence outside of the U.S., and in order to maintain that customer base, they'll need to make sure they pay all their U.S. players what they're due (I don't have any money on Absolute Poker, but I would probably be more concerned about their ability to pay me), though it could take months or even years, for that to happen. Since I don't have a lot of money on the sites, that's the least of my concerns.

More than anything I'm sad that it could be years before I'll be able to play online poker for real money again. PokerStars has already stopped allowing Americans in real-money games, and Full Tilt is likely to follow suit in the very near future. I won't be moving my game to any other site that makes the foolhardy decision to continue to accept U.S. play, and I doubt many of my fellow Americans will either. Today's indictments will result in a sudden exodus of Americans from the online poker tables, and the vast majority of those players will be sitting out until online poker is explicitly legal, licensed and regulated.
The day online poker died is republished from Online.CasinoCity.com.
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Best of Aaron Todd
Aaron Todd

Home-game hotshot Aaron Todd was an editor/writer at Casino City for nearly eight years, and is currently the Assistant Director of Athletics for Communications and Marketing at St. Lawrence University, his alma mater. While he is happy to play Texas Hold'em, he'd rather mix it up and play Omaha Hi/Lo, Razz, Deuce-to-Seven Triple Draw, and Badugi.

Aaron Todd

Home-game hotshot Aaron Todd was an editor/writer at Casino City for nearly eight years, and is currently the Assistant Director of Athletics for Communications and Marketing at St. Lawrence University, his alma mater. While he is happy to play Texas Hold'em, he'd rather mix it up and play Omaha Hi/Lo, Razz, Deuce-to-Seven Triple Draw, and Badugi.