The Facebook-facing poker site’s interest might seem reasonable in light of the Department of Justice’s recent re-interpretation of the 1961 Wire Act, limiting the scope of its prohibitions to sports betting. But there is also a more cynical interpretation of Zynga’s announcement.

With its stock price languishing after its initial public offering, Zynga needed a growth storyline that shareholders might believe. I could write more about why Zynga’s announcement may be more of a semi-bluff than a made hand, but an online gaming insider has done that already. Bill Rini asks Zynga Ready For Real Money Gaming or Trying to Hide Failures? 

The veiled implication is Wynn’s sizable donation might have been less than philanthropic – bordering on a ”pay to play” ante to retain favor in the world’s most lucrative gaming destination. (The competing Las Vegas Sands’ Macau operation is currently under DOJ and SEC scrutiny for possible infringement of the Foreign Corrupt Practices Act, as referenced here in a Wall Street Journal blog.)

Wynn claims Okada’s lawsuit is just a smoke screen to mask the fact that Okada had been working behind Wynn’s back to develop a casino in the Philippines. You can read all the tawdry details in A Partners’ Fight Erupts at Wynn.

How will it end? Perhaps better than Steve Wynn’s marriage. After all, Wynn recently told the press, “I love Kazuo Okada as much as any man that I’ve met in my life.”

Wynn shares have since recovered from the drama at the start of January, but still have a ways to go in 2012 before reaching 2011 highs.

PokerStars may be without a CEO for the time being, as Gabi Campos, who assumed the chief executive position in 2010, reportedly is no longer big boss of the largest real-money online poker site in the world. While it’s not quite clear who told whom to eff off (and Stars has yet to put out a press release insisting all is hunky-dory) … if confirmed, Campos’ ouster/skeedaddling marks the fourth major executive departure at PokerStars since Black Friday.

First to be disappeared (amid some controversy) was veteran EPT Tournament Director Thomas Kremser in May; then last month, EPT founder John Duthie left. And now supposedly Jeffrey Haas, top dog at Global Poker Tours Limited (parent company for PokerStars live events) has been, er … moved on. (Haas’s LinkedIn page lists GPTL as “Past” … and “Director of New Platforms, Mobile & Social Gaming for Pokerstars.com” as current — sounds like “big-money suit demoted to glorified blogger” to me, but hey!)

UPDATE: Interestingly, Campos’ LinkedIn-from-Israel doesn’t list PokerStars as a past or present employer … says he his now working for 888-subsidiary Dragonfish, which we know, of course, in 2010 became an online partner to the WSOP.

What if anything might be behind this extended shakeup on the international live tournament poker scene is hard to say. Read Wendeen Eolis’ report in Poker Player Newspaper here.

Despite Black Friday, PokerStars has maintained its position as the world’s biggest, arguably most important, and possibly most highly regulated and therefore internationally legitimate online poker site. (And they set a Guinness World Record to boot!)

The US Department of Justice, meanwhile, maintains that PokerStars’ success was built on the ill-gotten gains of an illegal enterprise with ties to organized crime … and their founder is still, according to the DOJ, the #1 most wanted online poker criminal.

DOJ prosecutors keep moving up their ladder of bad guys in the unlawful internet gambling case against Isai Scheinberg et al. Brent Beckley, the 31-year-old father of two and a co-owner of Absolute Poker, told a Manhattan judge he did indeed lead a company that deceived US banks to circumvent US law, and acknowledged conspiring with others to commit bank and wire fraud. Beckley will likely serve 12-18 months in prison as part of a plea agreement, Reuters and the New York Times report.

This probably doesn’t bode well for other Black Friday defendants who face more severe charges and still haven’t stepped foot into US court. Though I haven’t seen actual documents on this one yet (readers please feel free to send a link or pdf), I’d be willing to bet (on this-here internet?) that the plea deal does not cut Beckley any slack because Absolute Poker patches said “dot net”.

First UIGEA Conviction in the Books The DOJ logged their first win on UIGEA charges — making the supposedly weak law thus far undefeated — against online sportsbook operator Todd Lyons. His arrest back in May 2010 shoulda been a big warning sign to American online poker operators (and players?) — and Full Tilt specifically — that the DOJ was coming to get them! [CalvinAyre.com]

First Black Friday Trial Date Set John Campos and Chad Elie, the Utah banker and PokerStars payment processor indicted for their role in online poker criminal activity, have a trial date in March … creating a tangible timeline for Black Friday cases and added pressure on the big fish the DOJ really wants — Isai Sheinberg, Ray Bitar, and Scott Tom. [Legal Poker Sites]

MGM Sues Poker Domain Squatters Just as Caesars sued (and won) to obtain the domain WSOP.com, MGM has filed suit to repossess the domains mgmpoker.com, bellagiopoker.com, luxorpoker.com, mandalaybaypoker.com, and ariapoker.com. Apparently the casino giant thinks they’ll have need for them soon. [VegasInc]

Barton Says Online Poker Bill Still Alive This Congress Rep. Joe Barton (R-TX) gave a luncheon keynote at the DGLP, where he spelled out how his online poker bill is moving forward as a piece of stand-alone legislation and/or still could be absorbed into some omnibus bills. Pretty straight-forward, honest-sounding stuff as Barton even talks about his own live real-money play and admits to multi-accounting for play money on PokerStars. [Pokerati Soundcloud]

Adelson Balks at Readiness for Online Poker The poker masses got spun into a tizzy after Vegas politico Jon Ralston “reported” that Las Vegas Sands Chairman Sheldon Adelson has been buzzing around DC that he is morally opposed to online gambling … and that age-verification technology isn’t ready yet. Ralston concludes that this could kill online poker’s chances in Congress as if Adelson alone is more powerful than the combined forces of Caesars, MGM, Steve Wynn, Station Casinos, Boyd Gaming, Michael Gaughan, et al. Quick to cry, some poker players have begun calling for a boycott of Venetian Poker. [Las Vegas Sun]

Nevada Regulations Almost Ready While so many chatter about complex details of future online poker, the Nevada Gaming Commission and State Gaming Control Board seem to be the only ones systematically moving forward with thorough, enforceable rules and regulations for online gaming. In one of the biggest overhauls to state gaming regs in history, they just released a whole bunch of revisions for licensure and suitable ownership that Big and Small casinos alike are paying close attention to. [gaming.NV.gov]

Fry Howie? Funny/sad, shortly after Black Friday I thought we might be seeing T-shirts that said “Free Howard!” not “Fry Howard!” But loyalty can be a fickle bitch when you eff up with someone else’s money. Hence this flash creation for players wishing to express their personal outrage against Full Tilt and Howard Lederer violently. [PokerListings]

UB Player Database Leaked Lots of offline debate over how and why nearly 3 million poker-player IDs leaked out. Work of a disgruntled employee or scuttling the ship before UB ultimately hits sea-floor? And will there be more such pressings of self-destruct? [Haley's Poker Blog]

Rest o’World: Cyprus on Crackdown, South Africa’s Open-Market Mind, German Pre-unification Some of the other key political moves from the rest of the world, as the future of legal online poker (and gambling) actively takes shape … the mediterranean island that isn’t Malta doesn’t have moral opposition, they just want their cut (kinda like Kentucky) … while South Africa continues its progressive-minded movement from staunch opposition to tolerance to active support of online gambling … all while the German province of Schleswig-Holstein’s acceptance of new online poker rules is so big it actually moved some major market needles. [Legal Poker Sites]

Among other denials, Campos and Elie sought to get much of the case thrown out on the grounds that the UIGEA is a bad law and/or poker isn’t gambling. With the action back on the DOJ, Preet Bharara assistant Arlo Devlin Brown delivers some rather compelling legal composition (the best writing is in the footnotes, imho) that reads like a big STFU from SDNY … with a message of hey, better watch it or we could indict the whole damn poker industry!

I’m paraphrasing, obv … but here’s the full Government’s Response to Defendants’ Pre-Trial Motions. They purport to have a mountain of evidence ready for trial … and show a century’s worth of precedent to snuff out any hopes that poker people could actually win this case.

With the standard disclaimer of “I’m not a lawyer but …” some fascinating elements include:

Federal courts have repeatedly and consistently upheld the application of the IGBA to poker. For example, at least three Circuits have specifically affirmed a defendant’s IGBA conviction where the sole gambling business at issue was the operation of a poker room. See United States v. Rieger, 942 F.2d 230 (3d Cir. 1991) (upholding IGBA conviction based solely on operation of a poker room); United States v. Zannino, 895 F.2d 1 (1st Cir. 1991) (same); United States v. Tarter, 522 F.2d 520 (6th Cir. 1975) (same); cf. United States v. Trupiano, 11 F.3d 769, 774-74 (8th Cir. 1993) (upholding IGBA conviction based on weekly card games hosted at individual’s home). Multiple Courts of Appeals – including the Second Circuit – have similarly upheld the application of the IGBA to gambling businesses offering video poker. See, e.g., United States v. Gotti, 459 F.3d 296, 342 (2d Cir. 2006) (affirming IGBA conviction for operating video poker machines, and specifically rejecting argument that IGBA and referenced New York gambling law did not apply to games that involved an element of skill); United States v. Lanzotti, 205 F.3d 951 (7th Cir. 2000) (affirming video poker conviction under IGBA); United States v. Hill, 167 F.3d 1055, 1064 (6th Cir. 1999) (same); United States v. Grey, 56 F.3d 1219 (10th Cir. 1995) (same). Additionally, multiple Courts of Appeals, again including in the Second Circuit, have applied IGBA to gambling operations that offered poker alongside other traditional casino games such as craps or blackjack, without the slightest suggestion that the IGBA’s definition of gambling excluded poker. See, e.g., United States v. Cook, 922 F.2d 1026 (2d Cir. 1991); United States v. Giovanetti, 919 F.2d 1223, 1225 (7th Cir. 1990).

4 E.g., Utsler v. Territory, 10 Okla 463 (1900) (“The witness Fisher also testified that he saw gambling carried on in the room with cards, being known as ‘stud poker,’ and he also testified that liquor was sold in the same room.”); In re Selling’s Estate, 17 N.Y. St. Rep. 833 (1888) (“The proof submitted by the petitioner also shows the respondent Joseph Selling to be a man of utterly worthless and irresponsible character; that he is a professional gambler, know[n] as ‘Poker Joe….’”).

For example, Willie Nelson’s classic poker song, about knowing when to “hold ‘em” and when to “fold ‘em” is called – based on the movie by the same name — “The Gambler.”

[Aha, your honor, with this sort of investigatory flaw, I move for dismissal, and instant restoration of Full Tilt poker funds and PokerStars points!]

First, defendants claim that in each of the listed games, the bettor has “no role in, or control over, the outcome” and that the game is instead subject only to chance. That is not true with respect to bookmaking, at the very least. Betting on the outcome of sporting events involves “substantial (not ‘slight’) skill,” including “the exercise of [a] bettor’s judgment in trying to . . . figure [out] the point spreads.” Office of the Attorney General of the State of New York, Formal Opinion No. 84-F1, N.Y. Op. Atty. Gen 11 (1984). Sports bettors have every opportunity to employ superior knowledge of the games, teams and the players involved in order to exploit odds that do not reflect the true likelihoods of the possible outcomes. Indeed, academics who have argued that poker should not be treated as a form of illegal gambling on the grounds that it is a “game of skill” make the same argument with respect to sports betting.11 Ultimately, the outcome of the bets that poker players make on the cards, just like the outcome of the bets on sporting events.

In making this argument, the defendants conflate two distinct concepts under IGBA – what it means to be “conducting” a gambling business in a certain place and whether certain employees can be construed as being involved in “conduct[ing]” the business. Becker addresses only the latter issue and holds, consistent with legislative history, that “Congress’ intent was to include all those who participate in the operation of a gambling business, regardless of how minor their roles and whether or not they be labeled agents, runners, independent contractors or the like, and to exclude only customers of the business.” 461 F.2d at 232. The footnote in Sanabria says the same thing. 437 U.S. at 70-71 n.26. The cited cases do not address (much less limit) what it means for a gambling business to be “conducted” in a state, and the logic of the argument that defendant’s advance is absurd: a New Yorker who buys a hot dog from a street vendor is not of course “conducting” that hot dog business, but it would be incorrect to claim that this means the business is not being conducted at all, by anyone.

Elie alone also contends that IGBA is unconstitutionally vague as applied here because it is charged with reference to New York law and because “reasonable minds can differ” as to “whether poker constitutes gambling” under the provisions of the New York Penal Law referred to in each of the IGBA counts charged in the Indictment. Elie IGBA Brf. at 27-30. Reasonable minds cannot.

[OK, OK, so they're taking this kinda seriously. Strong means weak, maybe?]

30 18 U.S.C. § 2 provides that “[w]hoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.” 18 U.S.C. § 2(a).

C. The UIGEA, As Applied to Online Poker, Is Not Void For Vagueness

In the end, it could come down to a matter of who’s gonna sing, or who’s already sung. Meanwhile, The Gambler does make a great metaphor for how Full Tilt (and PokerStars?) may or may not have misplayed their hand:

Still trying to wrap my teeth around the latest chapter in the saga of the Rise and Fall of Full Tilt Poker, with the Bernard Tapie Groupe in France saying the DOJ has given them a thumbs up on the purchase of certain Full Tilt assets … with which they’ll supposedly be able to make-good with Full Tilt’s non-American players and resume non-American operations.

So if this is correct — and we can talk later why we presume more truth in this story than others before it — Preet Bharara and his top-ranked American prosecution office wouldn’t have to worry about the Euros … which would be good for the DOJ, I presume, because who needs to mess with the foreigners and the incredibly complex international litigation and trade wars they potentially bring … especially when the real prize Preet seeks is closer to $1 billion.

For a better understanding, be sure to check out Wendeen Eolis’s latest piece in Poker Player Newspaper — Decoding Full Tilt Poker – DOJ – Tapie Plans — which provides a much needed sobriety check and skillful reading between the lines. Even though she may not be on the frontlines like Subject:Poker, as a Manhattan legal consultant in her non-poker life, Eolis has been down to the battlefield a time or two … and seems to understand ways the Southern District of New York more intimately than most.

The Tapie deal does offer the first glimmers of light at the end of a long tunnel, but it seems American players might wanna hold off on calls for “ONE TIME!” lest they become self-fulfilling prophesies of disappointment and despair. Because for any justifiable exuberance over the likelihood that European and “rest of world” players might see PokerStars-style payouts before the end of 2011 … American players with online poker (bank?) accounts in limbo now know only that the DOJ will be looking at them separately in determining who’s a “victim” and who is Isildur1 who’s potentially a less deserving accomplice.

From Executive Director John Pappas:

“We still have an open dialogue with [the DOJ] and look forward to more productive conversations down the road. We plan to follow up to make sure the DOJ gets a guarantee that players get restitution through any deal with new Full Tilt management.”

For more on this important story, please check out Poker Players Alliance Meets with DOJ Regarding Full Tilt Poker Player Funds -  Poker News (October 7, 2011).

In other news …

Full Tilt said the agreement includes a plan to repay balances of players worldwide who haven’t had access to their gambling funds since April.

Needless to say, it is my hope that we all get repaid in full as soon as possible. More specifically, it is my hope that the Justice Department will, once obtaining iron-clad guarantees of repayment from any party wishing to purchase Full Tilt Poker, work to fast-track settlement of all outstanding issues. As the DoJ has identified players as the victims in all of this, I expect they will welcome a settlement that addresses player restitution.

For more on this issue:

• 9/30/2011: Associated Press — Full Tilt Poker: French tycoon Tapie agreed to buy
• 9/30/2011: Washington Post: Full Tilt Poker says French business tycoon Bernard Tapie agrees to buy online poker company
• Two Plus Two Discussion: “Full Tilt Poker and Groupe Bernard Tapie Sign Acquisition Agreement”
• Pocket Fives Discussion: “FTP signs agreement with investor” 

---

Have a look at the document. He filed the motion himself — “Verified Claim of Raymond Bitar, Pursuant to Rule G of the Supplemental Rules for Admiralty and Maritime Claims” — with an Irish notary public to make it official.

I certainly don’t know the nuances of Rule G of the Supplemental Rules for Admiralty and Maritime Claims, but it seems complex enough that an attorney might-should usually be filing this kinda thing. And the lack of legal counsel’s involvement in this civil matter raises plenty of questions about the financial status of Bitar … and maybe even the motivations of various comments by Full Tilt attorneys who may or may not be still be getting paid.

So either Ray Bitar is broke, wants to appear broke (hey, it apparently worked for Daniel Tzvetkoff) … or is running some sorta triple-range-legal-merge to extract maximum value from his dwindling stack of FTP dollars while conserving favors from friends who went to law school.

This pro se filing follows Jeff Ifrah’s removing himself as attorney or record on various civil matters and class-action lawsuits against Full Tilt companies and principals, and Full Tilt lawyers skipping out on the nearly week-long AGCC hearing that resulted in further suspension of FTP’s gaming licenses.

Ifrah emerged as the first lawyer willing to speak on Full Tilt’s behalf, when he let eGaming Review know that Bitar’s feelings were really hurt after Wicked Chops Poker reported the Ireland-based CEO had been ousted as captain of the Full Tilt ship.

(Ifrah was saying in July: “We can completely deny the reports that Ray Bitar is no longer CEO. In fact that [rumour] really ruined his day yesterday. It doesn’t help anyone for sites to be reporting news that’s not true.”)

We’ll have to save for later a rundown of what Full Tilt legal representatives had said over time … it’s an interesting progression suggestive of what game Full Tilt might really have been playing at various points along the way.

Meanwhile, Chad Elie and John Campos — a payment processor and the Utah banker — have filed motions in the court that Forbes magazine calls the “first direct assault” on the DOJ’s case … essentially arguing that if poker is indeed a game of skill, then the premise for virtually all of the government’s case against online poker falls apart.

Ed. Note:  Shortly after Tom wrote this piece, the AGCC revealed that some $330 million had been seized pre-Black Friday. I sent an email asking if this changed the math, to which Tom replied, “That’s almost all that they owed to players, just short $60 million which is purportedly what they had in the bank.  Makes my case even stronger.”

Just yesterday, I heard the news that the Department of Justice accused Full Tilt Poker of running a Ponzi scheme.  A Ponzi scheme is defined as a pyramid investment swindle in which supposed profits are paid to early investors from money actually invested by later participants.

I object your honor.  Taking money I deposit and distributing it to owners is no Ponzi scheme.  But wait, let’s look at some facts/guesses.

Had our politicians not passed a law that restricted financial institutions from transferring money to and from poker sites, all players would still have their money. 

In reviewing the DOJ complaint and other sources, the following information jumped out at me:

* I have heard from various sources that Full Tilt credited players’ accounts for $180 million that Full Tilt never received.  I assume they didn’t receive it because the banks wouldn’t transfer it to them, but nonetheless, many players received credit for money that was never taken out of their own bank account.

Did Full Tilt distribute massive amounts of money to their owners?  Well, yes. Over the last four years, owners received $443 million in distributions.  Some say ahem, throat clear, “profit distributions”.

Had our politicians not passed a law that restricted financial institutions from transferring money to and from poker sites, all players would still have their money.  Because of that law, $180 million did not get transferred to Full Tilt, $115 million was seized, and $42 million is frozen in various banks.  If Full Tilt had all of this money, they would actually have a surplus over what the players are owed.

I normally don’t write about things like this, because I find these kinds of stories boring. But, the real story to me is WHERE IS THE COLLECTIVE OUTRAGE!!!!!?  But who should be the recipient of our outrage?  My first draft of this article was blasting the Full Tilt people.  But when I looked at the numbers, I had to re-evaluate.Believe it or not, with all of these payments there is still a shareholder or two that owes Full Tilt money from loans made by Full Tilt to the shareholder/player. Huh?  That’s what a bad craps habit will do for you.

So why is Full Tilt the bad guy in this story?  Well, they did some things wrong…really wrong.  They did not keep player funds separate from the general funds.  This allowed the government to seize the cash without returning it so that players could be paid out.  Do I have a big problem with the unbelievable distributions to shareholders?  Nope.  As long as there was enough money to pay all of the players when we cashed out, why would I care how much someone makes providing a service that I want?

I was playing poker the other day with a friend of mine who had a lot of money on Full Tilt.  He didn’t tell me how much, but I wouldn’t be surprised if it was over $100,000.  His response to what do you think about Full Tilt?  “I haven’t been paying any attention to that stuff.  Whatever.”

This is an indication of how messed up the poker community is.

1. Because we are always pitted against one another, we will never come together enough to have strength in numbers.   How can all the players of Full Tilt not band together and get some of their money back?  Whatever.
2. We are the most apathetic bunch of degenerates I’ve ever seen.  Shut up and deal.
3. We value money much less than the average person.  I will give you $200 to eat this $100 bill.
4. We are more upset about Russ Hamilton (allegedly) cheating a few hundred people out of their money than we are about Full Tilt and the U.S. government making it such that hundreds of thousands of people can’t get their money back.

I think that many of the owners of Full Tilt had an insatiable appetite to spend big, be big and gamble big.  Most of them earned the reputation of geniuses and monster gamblers.  I do feel bad for a few of the investor-players that had no idea of what was going on.  They just got big checks and thought they had made a great investment.

The board of directors of Full Tilt did little to protect those investors and the people with money on the site.  Shame on them, and while I’m shaming people, how about shame on our government?  They took our money.  The $115 million that they seized, that’s ours.  How is that fair.  I can’t imagine they would do that to us if our money were in a bank.   Oh, and shame on our politicians for creating the law that made it impossible for poker sites to continue to run legally.  They are such pussies.  If they didn’t want poker to be legal, they should have voted to make it illegal, not make it so that financial institutions can’t accept transactions with a poker site, in essence, setting the trap.  More underhanded crap from Washington.

I don’t know why I’m so outraged.  I lost all of my money on Full Tilt a couple days before they were shut down.  Funny thing, 5 other players, who I consider to be great players, lost all of their money on Full Tilt within a couple days of the shut down.  It gets curiouser and curiouser.  Whatever.

The one thing I’m most curious about is Chris Ferguson.  Why Jesus?  Why did you let this happen to us Jesus?  Why did you need that much money?  It’s obvious that you didn’t spend it at the barber.  Your clothing budget couldn’t have been very much since you have worn the same long, black, scary leather jacket for the last ten years.  The poker community after review of all of the facts should take a vote on whether Jesus should be able to keep his name. Whatever, we probably couldn’t even organize that.  I’m tired, I don’t care, now get the cards in the air.

Oops, one last thing.  I’m not a professional reporter, so all of the supposed facts in this article could be wrong.  Don’t rely on me.  I’m in a hurry to get to a game.

Tom Schneider, author of Oops, I Won Too Much Money, is a professional poker player and financial adviser for Loudmouth Golf. You can follow his semi-sensical spoutings on Twitter @DonkeyBomber.

In it they spell out a process they are going through to get money from anyone who mighta suckled from the Full Tilt mother-teat, and give an indefinite timeline (months at a minimum) to tell all those thinking this could be the “final chapter”, “dude, we’re just getting started, here.”

The full DOJ statement is below, which ends with a reminder about 28 C.F.R. Part 9, the regulation that binds them.

Meanwhile, not sure if this is a good, bad, or meh-for-poker … but the DOJ is coming under scrutiny over seized assets. Just this month — after an investigation sparked by a junior prosecutor in the Southern District of New York concerned about plausible shenanigans in the remission of Bernie Madoff loot — the Justice Department’s own Inspector General cited serious deficiencies in the US Marshals’ handling of seized assets. The OIG wrote a report that reads kinda like a Full Tilt indictment … at a time when they are getting flack (from both the left and the right) for essentially abusing some 400 laws allowing them to take money and other assets from people who may or may not face criminal charges.

United States v. Pokerstars et al., 11 Civ. 2564 (LBS) (Full Tilt Poker information)

After the amended complaint in United States v. Pokerstars et al., 11 Civ. 2564 (LBS), was filed on September 22, 2011, the United States Attorney’s Office for the Southern District of New York received a number of new inquiries from individuals regarding the recovery of their funds from Full Tilt Poker.

By way of background, in April of 2011, this Office entered into a domain-name use agreement with Full Tilt Poker. That agreement, among other things, expressly authorized Full Tilt Poker to return player funds to players. However, as the September 22 amended complaint alleges, Full Tilt Poker did not in fact have player funds on hand to return to players. Instead, the amended complaint alleges that Full Tilt Poker had, among other things, (a) transferred significant amounts of players’ real money deposits to principals of the company, while (b) allowing many players to continue to gamble, and “win” and “lose,” with phantom credits in their player accounts.

At this time, this Office, together with the FBI and other agencies, is attempting to trace, secure and forfeit as much as possible of the funds derived from operation of the fraud committed by Full Tilt Poker and its board members that is alleged in the amended complaint. The Office is also attempting to obtain and examine the books and records of Full Tilt Poker. Many of those books and records are kept overseas. The return of forfeited funds to victims of the alleged fraud may be possible, but will depend on several factors, including the successful conclusion of the litigation, the amount of funds seized and ordered forfeited by the court, and compliance with other procedures the Department of Justice may eventually establish regarding return of forfeited funds to victims who lost money as a result of the alleged fraudulent conduct.

We cannot predict the duration of proceedings in this case, other than to state that they will last for many months at the least. We will apprise victims of the alleged fraud of future developments as appropriate. General information regarding what is known as “remission” (i.e., return to victims) of funds that have been seized and forfeited is set forth in Department of Justice regulations found at 28 C.F.R. Part 9.

I have spoken with many poker players who have been deeply affected by the failure of Full Tilt Poker, Absolute Poker, and Ultimate Bet to repay its players since Black Friday. While I have roughly five figures of my own money locked up on Full Tilt Poker, this is nothing compared to the heartbreaking stories I have heard from many of my fellow players. We all need to take a stand — for the present AND for the future.

You all received PPA’s update yesterday detailing how to contact the Justice Department’s Victims and Witness Services program. I encourage everyone affected by this to take a good look at both this program and at PPA’s legal analysis of the options available to individual players who have not been able to access their online poker funds.

PPA has worked to ensure that all proposed online poker legislation includes provisions for consumer protections even well before Black Friday. Needless to say, PPA will continue to push for these important provisions. We all deserve safe, licensed, accountable sites on which to play. I am glad the poker community is standing together, united in this fight for our rights.

Here are some actions we can take right now to continue to advocate for our rights. These take less than 60 seconds each!

“We the People” Poker Petition to President Obama

We the People is a new addition to the White House website that allows Americans to petition the Obama Administration on a range of issues. Per the site, “if a petition gets enough support, White House staff will review it, ensure it is sent to the appropriate policy experts, and issue an official response.”

This is a great way for us to ensure the administration hears from the poker community, so let’s all take a moment to sign the petition electronically.

The site is getting a lot of traffic, so you may get either a “site is under maintenance” or a “404 not found” message. Just try it a few times and you’ll get through. Even with this slight delay, it should take less than one minute to complete:

1. Go HERE and click “CREATE AN ACCOUNT.”
2. The site will send a confirmation email. Click on the link in that email to continue.
3. Click “SIGN THIS PETITION” to vote (if you are not redirected automatically, go HERE to vote).
4. Send a prefilled, editable Twitter message to invite others to sign this petition HERE.

Deficit Super Committee Outreach

The United States Congress Joint Select Committee on Deficit Reduction is made up of 12 members of Congress — six representatives and six senators, with equal representation from Democrats and Republicans — who have been tasked with developing a bipartisan plan to reduce the federal deficit. The plan will be delivered to the full Congress and President Obama by Thanksgiving.

Let’s all take a few moments to visit the super committee’s website HERE to send the super committee members our recommendations. Below is a sample letter that you can edit or cut-and-paste as-is into the message field. Or, better yet, write your own. This is another great opportunity for us to demonstrate support for our position.

SAMPLE LETTER (this has been updated from last week’s sample letter, so feel free to send this one even if you sent the prior one last week)

Dear Honorable Joint Select Committee Members,

HR 2366, the Online Poker Act, is a bipartisan bill that, should it become law, will create thousands of jobs while providing up to $40 billion in new tax revenue for the federal deficit over the next ten years — without raising taxes. It also mandates strong consumer protections and effective age verification.

Former FBI Director Louis Freeh and former Secretary of Homeland Security, Governor, and Assistant District Attorney Tom Ridge support federal online poker licensing because it addresses control of cash flows and mandates consumer protections, while WiredSafety concluded that “combining a thoughtful regulatory scheme with education, technology tools, and support appears to be the most effective means of handling the realities and risks” of online poker.

Licensed U.S.-based horse race wagering sites have proven that online betting sites can successfully implement strong consumer protections while creating American jobs and generating revenues for our government. It is time to allow online poker sites the same opportunity.

I respectfully ask that you seriously consider recommending sensible licensing and regulation of online poker within the U.S. in your deficit reduction report to Congress and the President.

Thank you for your consideration.

Sincerely,

Add your name here

 

Department of Justice Outreach

Let’s ask the Justice Department to consider ALL seized Full Tilt Poker funds as rightfully belonging to affected players. We can do this in less than 30 seconds.

1. Send a prefilled, editable pro-poker Twitter message HERE. Verify that your Twitter account is not set to “private”.
2. Try to wait at least an hour, then send another Twitter message HERE.
3. Like the DoJ Facebook page HERE (you can unlike when done if you wish) and like the pro-poker comment HERE
4. Return to the main Facebook page HERE to post and like respectful pro-poker comments. Either cut-and-paste the following, or write your own respectful post: “Funds seized from Full Tilt Poker and its processors rightfully belong to the affected players, whom you have identified as victims of fraud. Will you please use all recovered funds, including those from prior payment processor seizures, to repay affected players? Thank you.”
5. Please follow the daily action plan on Twitter HERE and on Facebook HERE.

Interviews

PPA comes before poker media to take on the tough questions as often as possible, as the questions we receive at these interviews are representative of the issues in which the poker community is most interested. I hope you will find these interesting and informative:

• Video: PPA Board Member and 2004 WSOP Champion Greg Raymer on CNN
• Executive Director John Pappas on NPR’s “All Things Considered” (9/21)
• Podcast: Short Stacked Radio (9/20) — I come on at time point 1:32:10 in Part 1
• Podcast; QuadJacks Poker Radio (9/20): I discussed the Full Tilt Poker issue at length. The podcast should be available later this weekend.

Thank you again for your support!

Proud to play,

Rich Muny

playerrelations@theppa.org
www.facebook.com/rich.muny

And here’s the actual crime novel of the DOJ-SDNY’s proposed amendment to the complaint.

And read below for a statement from the PPA, calling on the DOJ not to forget about the players as they continue to shut it all down.

PPA Statement on DOJ Amendment to Online Poker Civil Suit

Washington, DC (September 20, 2011) – John Pappas, executive director of the Poker Players Alliance (PPA), the leading poker grassroots advocacy group with more than one million members nationwide, issued the following statement upon today’s amended Department of Justice civil suit claiming that Full Tilt Poker was engaged in a “Ponzi scheme” and defrauded its players.

“This is a sad and disappointing day for American poker players.  If true, these allegations detail a massive betrayal of player trust which will cause financial hardship for thousands, if not millions, of individual poker players, none of whom are accused of doing anything wrong.  We call on the Department of Justice to certify that the proceeds of any settlement or seizure that may result from this action will first be dedicated to reimbursing players.  We further call on Full Tilt Poker, its management, directors and owners to take all available steps to ensure the prompt payment of players as their first priority.

“Since Black Friday on April 15^th, the PPA has vocally called for Full Tilt Poker to refund player balances.  We also issued a guide to our players which provided them legal guidance on what they could do to recover their funds.  These new government allegations underscore the sincere need for Congress to act immediately to pass legislation that appropriately regulates Internet poker in the U.S. so that players can be protected from the types of abuses alleged by the Department of Justice today.  Today’s news does not change the mission of the PPA – to make player reimbursements and effective federal or state licensing of Internet poker a priority.”

To view the PPA legal guide referenced above, please visit http://theppa.org/resources/legal/guide/.

About The Poker Players Alliance

The Poker Players Alliance (www.theppa.org)  is a nonprofit membership organization comprised of over 1,000,000 online and offline poker players and enthusiasts from around the United States who have joined together to speak with one voice to promote the game and to protect poker players’ rights.

But a few recent stories of particular significance that might otherwise get buried amid PokerStars/WSOP/WPT press releases, 2+2 NVG threads, and the mashup of Jungleman cheating buzz:

Ring-fenced funds: Full Tilt debaucle explained
ALDERNEY
Check out this story in Poker Player Newspaper about a regulatory matter of new relevance called “ring-fenced funds”. It helps one understand a little better why Full Tilt found themselves in tighter straits than PokerStars post-Black Friday (even though PokerStars is the big boy the DOJ most wants) … and leaves one to wonder why senior executives and on-duty attorneys representing both Party Gaming and PokerStars flew in from Gibraltar, Israel, and the United States to observe the proceedings firsthand. Perhaps they thought they were coming in to witness an execution?

Online gambling goes national
WASHINGTON DC
Big talk all over the internet about a piece in the New York Post that points out how stars seem to be aligning for online gambling legalzation in the US — from the Kyl/Reid letter requesting DOJ assistance in squelching offshore operatives and state initiatives alike, to a Boehner aide taking on a VP role with the American Gaming Association, to a warming friendship between House Majority Leader Eric Cantor and Venetian pooh-bah Shelly Adelson.

It all supports my belief that online gambling will indeed be a national issue in coming months (assuming people behind a rumored Senate bill want it to be). There’s no mention, however, of the player-friendly Barton Bill, nor much anything about poker specifically — the writer talks of “gambling” — which suggests this story could be a plant by media operatives for the AGA, who we know, of course, represent Big Casinos and likely have Harry Reid’s office on speed dial. It also supports contentions that the effort to bring back online poker (thanks PPA and Joe Barton!) will likely become a push for full-on legal online casinos as bills move forward.

Nevada regulators prepping for Poker+ …
LAS VEGAS/CARSON CITY
Meanwhile, unbeknownst to many, Nevada Gaming authorities are in the midst of sweeping changes to state regulations — with very specific language updates on matters of foreign partners, “suitability”, server location, mobile gaming platforms, slot machine networks, money transfers, tax collection, you name it … The new rules currently taking shape in Nevada touch on just about every issue brought up in the online gaming political sphere over the past five years. Whether revolutionary or standard as far as procedure goes, if you really wanna know what the future of online gambling (and therefore poker) will look like — and/or place your bets on who the corporate winners will be* — follow the public work of the Nevada Gaming Commission and State Gaming Control Board here in coming weeks.

* for entertainment purposes only: smart bet is Caesars, William Hill, and Cantor-Fitzgerald.

Play Late!

ACTION ALERT: Pokerati Game — 1/2 NLH/PLO — gets underway tonight at 7pm! Goes until whenever …

But really, takes you back, doesn’t it? I would, of course, get my $520 before year-end — no interest though from the Feds for holding it. And the return of Neteller money back in ’07 is a reason many give for their confidence in some day getting repaid by Full Tilt. But when I look back at that case — though Neteller was in many ways the opening salvo in the US fight to shut down the online poker industry — I frankly see why the current round of money seizures are very different, and thus why repayment via Full Tilt is far less likely than the government’s eventual release of Neteller funds.

Looking back at this post, and the original article it was gonna link to, does remind me about issues of virtual currency that the world is still trying to resolve. We couldn’t know it at the time, but what we’re seeing now started out with poker players getting caught up in something that was about way more than poker:

The carefulest of readers may have noticed that Pokerati has shied away from the [tag]War on Poker[/tag] tag, opting instead for the more cooperative [tag]Poker Law Review[/tag]. After all, we’re just trying to come up with a win-win solution for political interests and poker players alike, right? Maybe. But this is really turning into a fight … and I think I’ve been hit!

Apparently the Feds have frozen funds from US Neteller accounts. Huh-wah? That’s what a non-poker blog that tracks the emerging digital finance economy tells me. But is he sure it’s the FBI, and not the DOJ? So I went and checked — no new special notice from Neteller. From there I checked my account, and double-checked with my bank, and sure enough, there’s about $520 stuck in some sort of limbo, legal or otherwise. Word is that my e-cash is now “evidence.”

I’m not sure how my transactions specifically fit into the convergence of the the Wire Act, the Patriot Act, and the UIGEA — particularly as they apply to the case(s) against Stephen Lawrence and John Lefebvre — but they do reflect three bigger questions that presumably will have to be answered — my guess — by the Supreme Court.

Where does internet jurisdiction end and begin?

The $300 you see deposited on Jan. 13, I put in there straight from my checking account. Interestingly enough, it was for a gambling debt, but not an online one. I owed Adam a little money after a raucous home game, and we had agreed that I would send it to him via Neteller — quick and easy. Well it never got to Adam, so I tried to send it back to my bank. Was told it would take a few business days — that’s standard … but not showing up within 10 days is abnormal.

(My account has also been switched from “certified” to “uncertified,” which also seems a bit odd.)

Now I gotta think that the $220 from Sami ain’t gonna show up either. At least not anytime soon. And that sorta transaction is one that raises a lot of important internet questions — specifically, What constitutes a criminal link?

This money was a straight-up ad deal for something called Rakeback pages. Sari hopes you click it, but really, he is paying for some brand impression and SEO value. I was happy to ablige.

So a link clearly has to be informational. But what about a link with an affiliate code? And what about a link to someone with affiliate codes? Surely if I had an informational website giving you addresses to all the crack houses, that would be legal. Because hey, I have the right to tell you to stay away from there! But if I had a deal with the crack houses to get a little kickback for any new customers I send your way … OK, maybe that’s a little more sketchy.

But is it really? The Dallas Observer makes money selling ads to legally questionable “massage parlors” — which we all know are the dot-net versions of whorehouses. So then the question becomes how many degrees of separation are necessary? Again, I don’t have an affiliate relationship online … but I do have a relationship with someone who does have a relationship. And as far as I know this guy isn’t breaking any laws of the United States — operating completely out of its jurisdiction. But he is clearly doing business with people who stand to get arrested for something that is legal elsewhere.

As for my $520 … I want it back, but I’ll let it sit for now. But that begs a third question … is there such a thing as “virtual evidence”? Or perhaps what constitutes real money?

When the cops raid a poker room, they walk out with a bunch of cash. It is physical evidence to show money is being transacted. But with online money, there is no actual currency. There’s just an ethereal electronic idea of it. Does the US have any less evidence if they let this money back onto US soil?

This letter, from two senators coming from very different camps on the Internet gaming issue, is a very interesting document both for what it says and for what it doesn’t say.

What it says is that the Department of Justice has been lax in pursuing foreign private Internet gaming operators and that this has “led to a signficant and growing perception … that the Department of Justice thought that the case [against operating Internet poker and other Internet gambling websites] was uncertain enough that it chose not to pursue enforcement actions.” The senators state that it’s important for the DOJ to pursue “illegal Internet gambling” in the United States “aggressively and consistently.” Most notably in this paragraph, Senators Kyl and Reid assert that Internet poker websites have been offering online play to Americans for many years “with apparently no repercussions.”

I can’t know what the senators meant to convey by this language, but as drafted, some of these claims are puzzling. Yes, the DOJ has perhaps not been as consistent in its pursuit – or not – of various Internet gaming operators. This owes as much to the fragmented nature of law enforcement in the US as anything else. (The Attorney General could convene a unit or task force to pursue Internet gaming across the various federal districts, but this seems unlikely. I don’t think that’s what the senators are after here, anyway.) But: a lack of aggression? Apparently no repercussions? Setting aside all state actions against Internet gaming, federal prosecutors across the United States, and taken as a whole, have been pretty busy. They have hounded operators, and those working with them, that are taking what the DOJ perceives to be illegal bets and wagers. There are the current federal indictments in New York and Maryland. There have been previous indictments in New York, Utah, and Missouri. There have been forfeiture orders sought and granted in federal courts in New York, Washington, Maryland, Missouri, and California, to name a few. The DOJ has collectively taken highly aggressive steps to disrupt operators’ businesses in the United States, with huge repercussions for those operators (many of which have decided to leave the US), payment intermediaries (many of whom have been indicted and/or shut down), and players (who have huge difficulties getting their money, if they can get it at all). No-one can deny that federal law enforcement has had a huge impact on the US-facing industry since 2006. It seems strange to me to call this a lack of consequences or aggression when the opposite appears to be true.

The Kyl-Reid letter goes on to cite concerns that the senators have with “the spread of efforts to legalize intra-state Internet gambling and the spread of efforts to offer such intra-state gambling through state-sponsored lotteries.” They call the efforts by intra-state gambling advocates and boasts about the DOJ’s “effective consent” by unnamed officials from various state lotteries “troubling.” They finish by asking the Attorney General to work with them to strengthen penalties for those who break the law, to see what modifications would be helpful to the DOJ in its fight against Internet gambling, and to either: a) reiterate the DOJ’s longstanding position that federal law prohibits gambling over the Internet (including intra-state gambling); or, b) if the DOJ’s position has changed, to consult with Congress before finalizing such a new position.

The request to restate the DOJ’s position is an empty one. Cleary the DOJ’s position has not changed. The New York and Maryland indictments both rely on the Illegal Gambling Business Act and respective predicate state law violations. The indictments in Maryland don’t rely on UIGEA (the New York indictments do), but the affidavit in support of the seizure warrants in Maryland relies on both UIGEA and the Wire Act. Some believe that the New York indictments signal that the DOJ knows that the Wire Act doesn’t prohibit Internet poker or casino games from being offered. If true, that’s as far as the DOJ will go, i.e., they just won’t invoke it, without comment one way or the other. The DOJ has consistently taken the position that the Wire Act applies to all Internet gambling, irrespective of the In re Mastercard decision, and this letter won’t change that. This in spite of the fact that, as many have pointed out before, the UIGEA expressly allows intra-state gaming, a point that is unsurprisingly not addressed by the senators. (That carve-out likely only gets intra-state gaming out of the UIGEA, not the Wire Act, but the point should still be addressed.)

What do the senators not say in this letter? They don’t say that the DOJ’s position “that all forms of Internet gambling are illegal” is the law of the land or that they agree with it. They clearly state that it’s the DOJ’s view. They also say precisely nothing about efforts to regulate and tax poker at the federal level.

What is the upshot of this correspondence to the Attorney General? I think it’s this: the senators are letting the DOJ know that it is to continue with its current policy. Kyl and Reid don’t necessarily endorse that blanket view of the application of the Wire Act (for example), but it suits their purpose to endorse tough “enforcement” from the DOJ. So what is their purpose, then? I suspect it’s to remind the DOJ that the legislative branch is calling the shots on the development of Internet gaming policy and, further to that power, to warn the states away from adopting their own intra-state gaming programmes. Kyl and Reid may also be signalling that they will support an Internet poker bill in Congress, perhaps even this year. Reid and the AGA already appear to be on board with a poker-only bill, and Kyl seems to be lining up with them. I agree with Jon Ralston’s conclusion on this (here); I just disagree with him that Reid and Kyl want an explanation for the Maryland and Manhattan federal indictments. They want nothing of the kind. In fact, I think the senators would be fine with further indictments being pursued.

The timing of the enactment of such a bill, if it happens, is still highly uncertain. Some colleagues of mine in the US that I greatly respect seem to believe that it has a better-than-even chance of happening this year, which I initially found surprising, but they could be right. Any federal i-poker bill could use one of three vehicles currently before the House of Representatives – the Barton, McDermott, or Campbell bills – but it will likely look very different from any of those drafts by the time it passes. Reid and Kyl will be the ones co-ordinating and signing off on the drafting of such a measure, for as long as Kyl is around, at least.

If my read on this is right, it affirms that pronouncements by politicians in general – and by Harry Reid in particular – are rarely what they may at first seem.