Last Friday, online poker players in the United States received a shock when they tried to get a few games in before the weekend. On what poker fans are calling "Black Friday," the U.S. Attorney's Office in New York, working with the FBI, shut down three of the most prominent sites — Full Tilt Poker, PokerStars, and Absolute Poker — and slapped their founders with serious civil and criminal charges. This unprecedented crackdown "amounts to a high-stakes legal showdown between domestic laws and the borderless commerce that the internet makes possible," says Colin Freeze at The Globe and Mail. What does it mean for the future of online gambling? Here, a brief guide:
What are the charges?
In 2006, Congress made it illegal for American banks to do direct business with poker websites. Many folded as a result, but others decided to test their luck by operating in a grey legal area. Located outside U.S. borders (Full Tilt Poker is based in the Channel Islands, for example), these sites maintained a hugely profitable business for years. But how did they process payments from players? The FBI says they bamboozled banks into funnelling money through websites disguised to look as though they had nothing to do with gambling — in other words, fraud. "They lied to banks about the true nature of their business," says FBI assistant director Janice Fedarcyk. "The defendants bet the house they could continue their scheme and they lost."
What happens to the defendants?
Eleven people have been charged, but so far, only one defendant, Bradley Franzen, has interacted with law enforcement (he pleaded not guilty to nine counts, including money laundering). If convicted, defendants could face large financial penalties and serious jail time. But because many of the top businessmen in online poker live in foreign countries, it's unclear whether they will ever face an American court.
What about the money?
The U.S. has ordered the seizure of an estimated $3 billion from "about 76" bank accounts across the globe, say Patricia Hurtado and Beth Jinks at Bloomberg. The poker sites have assured players that any money they had already invested is safe.
Will online poker continue?
All three sites were still up and running as of Tuesday — just not in the United States. The sites have tried to tell customers that they will continue to operate just as before, but "the truth is that isn't really the case," says Andrew Feldman at ESPN. Business is already way down. Experts say that 1.8 milllion Americans used online poker sites, and this weekend, the websites' "Sunday majors" — weekly tournaments that typically offer huge payouts — were paying out far less than usual as a result of American players' absence.
What about poker on TV?
Because the many poker-based TV shows that have proliferated in recent years rely heavily on advertising from gambling sites, their future is extremely cloudy. ESPN has already announced that it will cease coverage of the North American Poker Tour, of which PokerStars was the main sponsor. Fox, meanwhile, has said it will stop airing The Million Dollar Challenge and The Big Game. Many other programs are in doubt, though ESPN says it will go ahead with coverage of the World Series of Poker, the highest-profile cards event.
Couldn't they just legalize online poker?
Possibly. These closures "completely annihilated what was a flourishing industry in the United States," says poker agent Brian Balsbaugh, as quoted by CNBC. But there may be a silver lining for gamblers. The FBI's move may ramp up what is already a heated debate among lawmakers about whether to legalize online poker once and for all. "There will be online poker in the United States," says Balsbaugh — the question is in what form. In the meantime, American players are resorting to brick-and-mortar casinos to get their fix.
Sources: Globe and Mail, Christian Science Monitor, ESPN, USA Today, LA Times, CNBC (2), Internet Poker, Josic, LA Times, Poker News Daily, Bloomberg
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