✖ A deal has been struck between the Department of Justice and two of the online poker sites indicted on Black Friday, PokerStars and Full Tilt, to permit them to refund players’ money. There’s no indication as to why Absolute Poker has yet to work out its own deal, but the DoJ statement claims the “Government stands to enter the same agreement with Absolute Poker if [AP] so chooses.”
Clearly, the DoJ appears to have recognized that it was losing the PR war by denying US players access to their own money, compelling it to do something. The DoJ statement took pains to point out the following: “No individual player accounts were ever frozen or restrained, and each implicated poker company has at all times been free to reimburse any player’s deposited funds. In fact, this Office expects the companies to return the money that U.S. players entrusted to them, and we will work with the poker companies to facilitate the return of funds to players, as today’s agreements with PokerStars and Full Tilt Poker demonstrate.”
The agreements require the poker sites to maintain “all records relating to all financial transactions; all records relating to website databases; all internal email correspondence; and all business records generally.” The agreement is to apply until the litigation is concluded, a superseding agreement is reached, or until the DoJ and the sites “mutually agree to terminate the agreement.” Clearly, some kind of settlement appears to be in the works. The DoJ/poker room agreement cited Stars’ legal counsel as David M. Zornow, Anand S. Raman and John K. Carroll (former chief of the Securities and Commodities Fraud Task Force in the Southern District of New York). That last choice should prove a canny one. Nothing like having a former co-worker of your prosecutors on your defense team.
Read PokerStars’ agreement here. (Full Tilt’s is identical.)
The sites will be allowed the use of their seized .com domains to facilitate withdrawals only – US players cannot make deposits or take part in any games. The sites will be required to post DoJ-supplied banner messages explaining their limitations vis à vis US players. A DOJ-approved (but paid for by the sites) ‘independent monitor’ is to be appointed to ensure PokerStars and Full Tilt comply with the agreement. This monitor is to issue a Compliance Report to the DoJ after 45 days on the job. The domains remain in the control of the DoJ, and the sites have agreed not to “seek to challenge or overturn the seizure of the Domain during the duration of this agreement.”
Players outside the US are apparently eligible to use the .com sites as usual, as the DoJ goes on to say that “the agreements do not prohibit, and, in fact, expressly allow for, PokerStars and Full Tilt Poker to provide for, and facilitate, players outside of the United States to engage in playing online poker for real money.”
Full Tilt released a statement, calling the agreement “an important first step” but noted “there remain significant practical and legal impediments to returning funds to players in the immediate future … there exists no authorized US payment channel through which to make refunds. Full Tilt Poker has no accounting of the millions of dollars of player funds that were seized by the government and the government has not agreed to permit any of the seized funds to be returned to the players. Finally, there are numerous legal and jurisdictional issues that must be considered before poker winnings can be paid out to players through the US … The indictment and civil forfeiture action filed last Friday require Full Tilt Poker to proceed with caution in this area. Notwithstanding these issues, Full Tilt Poker is ready to work diligently with the US Attorney’s Office … to try and resolve these issues and to get players their money back as soon as possible.”
What Full Tilt appears to be trying to say here is that, technically, with US banks likely skittish about having anything to do with any of the indicted companies or gambling-related money in general, the poker companies may need to miscode their transactions to get them through the system. In other words, they’ll probably have to break the law to comply with the DoJ agreement. That’s about par for the course, we figure…
PokerStars’ statement indicated that “returning US players’ funds is a top priority … All PokerStars player deposits are completely safe. The Isle of Man’s strict licensing laws (similar to other jurisdictions where PokerStars holds licenses) require all funds to be held in accounts that are segregated from company assets. PokerStars has always complied with this requirement and continues to do so. This money is readily available to meet withdrawal demands.” Stars added, however that it “categorically denies the allegations brought by the US Department of Justice on 15th April 2011 and is taking all steps necessary to robustly defend itself, and the two named individuals.”
In other Black Friday hump day news…
✖ UB.com has finally joined the other indicted companies in blocking US players from ‘real money’ games.
✖ There is no fresh update on anything related to Black Friday defendant Chad Elie and his Playboy Playmate wife Destiny Davis (pictured at right). We just really enjoy running these pictures.
✖ The March 15 DoJ complaint filed against Black Friday defendant Bradley Franzen noted that in June and July 2009, the feds had instructed a ‘cooperating witness’ (CW) to use a New York-based bank account to fund an online poker account at one of the indicted poker companies. The Feds then tracked the passage of funds from the New York bank through Franzen’s payment processing shell companies to the poker company. A footnote to this section notes that the CW “pleaded guilty to internet gambling related charges in federal court 2007 and, since that time, has been cooperating with the FBI, including in this capacity.” For what its worth, 2007 was when the Neteller principals entered their guilty pleas.
✖ The Poker Lounge, a Full Tilt-sponsored TV poker program was canceled Wednesday after a wire transfer from Pocket Kings in Ireland failed to materialize, prompting the Presentable Productions TV crew to walk off the Cardiff (Wales) set.
✖ Australia’s Courier-Mail reports that former Intabill payment processing canary Daniel Tzvetkoff “kept the names, bank details and addresses of up to 500k customers of online poker websites.” According to the Courier-Mail’s source, these lists were part of property seized in the 2009 liquidation of Tzvetkoff’s Brisbane-based BT Projects.
✖ The Las Vegas Sun’s Jon Ralston has a great piece detailing how PokerStars attempted a “heavy-handed and clumsy” influence-peddling coup via its lobbying work in Nevada, maneuvering to steer the right officials into elected office to ensure passage of its soon to be introduced online poker bill AB 258. Ralston paints a picture of an overreaching poker company and pliant politicians, who accepted funds from a foreign company in apparent violation of state election law. (The FBI are now looking into the contributions.) As for why the pols would accept such ‘tainted’ funds, Ralston asks rhetorically: “Greed? Ignorance? The answer: Yes.” In a weird bit of synergy, the day Assemblyman William Horne introduced AB 258 was the same day the DoJ dropped its (at the time sealed) indictment.
✖ Unrelated, but New Jersey State Senator Ray Lesniak told Gambling Compliance’s Chris Krafcik that his November sports-betting referendum will be “a slam dunk,” but in the same breath admitted that the vote “could go either way.” Way to take a stand, Ray…
✖ After all that seriousness, let’s all sing, shall we?