BUSINESS

BLACK FRIDAY: Bloomberg says US poker players can kiss their money goodbye

TAGs: Black Friday, Full Tilt, PokerStars

Black-Friday-Poster-small✖ In Black Friday’s wake, anti-gambling stalwart Rep. Spencer Bachus (R-AL) has doubled down on his rhetoric, declaring that online gambling sites “are all illegal and therefore, by definition, are criminal enterprises.” Furthermore, a congressional aide bragged to The Hill that Rep. Barney Frank and Rep. John Campbell’s bipartisan poker bill HR1174 is effectively dead. (It’s downright weird how Calvin Ayre’s predictions keep coming true.) The aide also claimed that the Department of Justice’s seizure of 76 bank accounts across the globe means that the investigation/prosecution will more than pay for itself.

✖ Further to that last point, Andy Fixmer appeared on Bloomberg Asia today to voice the opinion that, while US poker players are highly unlikely to face any prosecution themselves, they do face the likelihood that all moneys on deposit with the indicted poker companies may be gone for good. If so, millions of Americans just got robbed by their own government to teach them a lesson, the DoJ equivalent of rubbing your cat’s nose in its own piss to get it to stop messing up your rug. This could go down as the largest unauthorized money grab from average taxpaying US citizens by elected government officials in US history.

How plausible is Bloomberg’s scenario? Well, considering that the poker companies currently have no financial channels through which to return player deposits and the US gov’t intends to use its civil claim to redirect all these seized accounts into its own coffers as the illicit proceeds of crime, it’s certainly one very possible outcome. And if PokerStars or Full Tilt are unable to repay their former US players, what effect will this have on their attempts to hold onto existing players in Europe, or recruit new ones? Also, since these companies are likely using the same banks for non-US business as well, Black Friday is likely to impact global banking relationships, meaning eCom capacity outside the US will also be affected. See, this is why European gaming stocks are going up. This is a global attack on the big poker companies’ eCom and reputations. Then again, whose reputation is really taking the biggest hit in this plan?

destiny-davis-court✖ Black Friday payment processing defendant Chad Elie entered a plea of ‘not guilty’ in a New York federal court on Tuesday. The 31-year-old Elie’s lawyer, William Cowden of Mallon & McCool, announced that he “intends to aggressively defend” his client on charges of money laundering and bank fraud. Despite this alleged aggression, Cowden more or less immediately surrendered Elie’s 500-gigabye hard drive to prosecutors, prompting Magistrate Judge Frank Maas to say he’d never before seen a defense lawyer hand over a piece of evidence at such an early stage of court proceedings. In response, Cowden said only that he didn’t “want to waste any time with the government.” See, he’s not just caving, he’s aggressively caving. Elie, who was accompanied in court by his Playboy Playmate wife of 72 hours, Destiny Davis (pictured left, searching for loose change in between some cushions), was released on $250k bond secured by $50k cash, which was provided by three people, including Davis. Elie will next appear May 11 before US District Judge Lewis A. Kaplan.

✖ The AmLaw Daily has shone some (anonymous) details on some of the legal representation being approached about assisting the other Black Friday defendants in pleading their cases. Full Tilt principal Raymond Bitar has reportedly called in DC-based A. Jeff Ifrah (former Greenberg Traurig partner) at Ifrah Law. SunFirst Bank vice chairman John Campos is being repped by Neil Kaplan of Salt Lake City’s Clyde Snow & Sessions, while the Bank itself has Loren Weiss of Ray Quinney & Nebeker in its corner.

✖ Jonathan New, a partner at Baker & Hostetler who worked on the NETeller, PartyGaming, and Dikshit cases as a federal prosecutor, believes advocacy groups like the Poker Players Alliance “have been almost challenging the [Justice Department] to bring a poker case, They want to prove once and for all that poker is not illegal gambling despite what the government has charged. So I imagine that they’re going to use this somehow to litigate the issue, but whether someone is going to be the sacrificial lamb to come back and test it I don’t know.” Ooh! Ooh! We know the answer! Ask us!

✖ PokerStars’ licensing body, the Isle of Man Gambling Supervision Commission, has issued a statement on the brouhaha: “While we are discussing the matter on an ongoing basis with PokerStars and watching developments, we can confirm that PokerStars’ licensing status in the Isle of Man remains unchanged. We are aware that PokerStars have suspended the availability of cash-play games in the USA and we are currently endeavouring to ensure that any player who wishes to withdraw money from their account can do so.” Absolute Poker’s licensing body, the Kahnawake Gaming Commission (KGC), also released a statement, saying that it is “reviewing the indictments” and that its “principal concern is that players are not adversely affected by the actions taken by US authorities. The KGC is presently engaged in discussions with its licensee concerning the status of player accounts.”

✖ An anonymous poker pro interviewed by Business Insider suspects that Full Tilt had advance warning of the DoJ action. Noting that Full Tilt ran its “double guarantees week” tournament promotion for two weeks this past month, ‘Kyle’ observed “they were also multi-entry tournaments, which meant players could buy-in up to 4 to 6 times for each tournament, paying rake on every entry. Full Tilt would make a killing on these tournaments since they make so much rake on the buy-ins, and they must have seen something coming if they decided to do two weeks of these promotions in a single month. Full Tilt just made a lot of money from players, and it’s probably because they had warning that some trouble was headed their way.” Also, Full Tilt’s Raymond Bitar has allegedly been identified as the second shooter in the Kennedy assassination and, even more damning, as the culprit behind one of the world’s greatest unsolved mysteries, i.e. who let the dogs out.

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