Posts Tagged ‘wire act’

Shifting Opinions: United States v. DiCristina

Fine lines persist between skill games and gambling crimes

by , Sep 18, 2012 | 1:50 pm

I intended to blog about the DiCristina decision since it was released on August 21st, but I haven’t made the time until now. With the usual great commentary about the case coming from all over the gaming spectrum, many of the more interesting points about the facts of the case itself and about what it means for poker have already been made. This post is really intended to be something of a summary of the commentary and reactions to date. If nothing else, hopefully Pokerati can act as a repository of documents and reflections on the case.

The Decision
Let’s start with the facts and the decision itself, a copy of which is here (all 120 pages of it). This summer, a jury convicted Lawrence DiCristina of operating (and of conspiracy to operate) an illegal gambling business contrary to the federal Illegal Gambling Business Act (IGBA). Those were the only federal charges against him. Mr. DiCristina ran a two-table, twice-weekly poker club in the back room of a Staten Island warehouse. The house at this business charged a 5 percent rake; the dealers were paid 25 percent of the rake collected. The defendant brought a motion for acquittal, arguing that the operation of the poker games didn’t violate the IGBA. The US District Judge in the case, Jack Weinstein, wrote his memorandum, order, and judgment in response to this motion. After an extensive discussion of the statute and its relationship to poker, Judge Weinstein vacated Mr. DiCristina’s conviction and dismissed the indictment.


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Court Rules Poker Is a Game of Skill, But …

Sunday Op-Ed: (Now What?)

by , Sep 16, 2012 | 8:00 am

A federal judge in New York shook the gaming world in August 2012 by ruling that poker is predominantly a game of skill and therefore not “gambling” under the federal Illegal Gambling Business Act (“IGBA”).

The editorial headline from the Christian Science Monitor was typical:  “Misdeal on Internet poker gambling:  A federal court ruling that poker is mainly a game of skill and thus not gambling could steer Congress down the wrong path of approving Internet gaming.”

The opinion is significant.  The IGBA was the most important remaining federal statute that could be applied to Internet poker, now that the Department of Justice has limited the Wire Act to sports betting.  And any court that wants to declare that poker is predominantly chance will have to deal with Judge Jack B. Weinstein’s detailed 120-page-long opinion.

But the impact will be less than most commentators think.  The decision deals with only one specific statute, the IGBA, and expressly states that poker is still illegal gambling under other laws.  And the decision is so weak in so many places, that it will probably be overturned, if taken up on appeal.

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Is Online Poker’s Window of Opportunity Closing?

Casinos say Nevada jobs at risk without federal bill to validate intrastate regs

by , Sep 1, 2012 | 1:00 pm

What seemed like a tremendous decision for the gaming industry nine months ago – the re-evaluation of the Federal Wire Act of 1961 – may not be so advantageous for Nevada unless Congress takes steps to enact Internet poker legislation.

A window of opportunity that could place Nevada at the center of the potential U.S. Internet gaming market is closing quickly, and some in the gaming industry worry that lack of federal action could cost the state tax revenues and casino customers, while making Nevada subservient to less-regulated states.

“There are different standards for gaming regulation in one state versus another,” Station Casinos Vice Chairman Lorenzo Fertitta said. “We know some companies will shop for the lowest common denominator. We could start seeing bets being taken away from Nevada.”

The U.S. Department of Justice on Dec. 23 reversed a 50-year-old interpretation of the Wire Act, saying the law covers only sports wagering. Legal experts said the decision frees individual states to let online operators offer poker and traditional casino games such as slot machines and blackjack if the play doesn’t cross state lines.

It’s been estimated that U.S. gamblers spent as much as $26 billion annually gambling online before federal prosecutors indicted the operators of three of the largest Internet poker websites in April 2011. Closing those sites, which had violated federal law by accepting wagers from the U.S., effectively walled Americans off from the online gaming universe.

Now, states dealing with tight budgets are looking at that huge, untapped Internet market and are increasingly open to allowing – and taxing – it. Lawmakers in several states are in various stages of adopting regulations to allow full-scale online gaming.

Several Nevada gaming companies are on the verge of offering in-state online poker, but they foresee trouble ahead if their market is limited only to players in the sparsely populated Silver State.

And not only are they concerned about missing out on poker profits, they fear gamblers who can play online at home won’t bother traveling to Las Vegas’s tourist-dependent resorts.

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Zynga’s Semi-Bluff?

by , Jan 26, 2012 | 4:14 pm

Play-money poker giant Zynga hinted last week that it conceivably could enter the real money gaming world (i.e. gambling).

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? 


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The Birth of (Legal) Online Sports Betting in America

Leroy’s primed to dominate a nascent industry?

by , Sep 19, 2010 | 12:47 am

This is a little confusing … because didn’t Barney Frank succumb to the NFL and make sure sports betting wasn’t included in any bill that codifies American freedom to gamble online?

I thought so, too … and maybe that’s why few seem to be recognizing the historic happenings right here, right now, with sports betting in Nevada. Check out the new TV commercials — seen on the local ABC affiliate before the UT-Tech game — for the first ever legal wagering app in the United States, moral opposition be damned:

We knew the release of “Leroy’s App” might be kinda a big deal … and the CEO of Leroy’s parent company, American Wagering, Inc., spells out pretty clearly their intent to have their finger on every “online” sports bet in the country with “interstate sports betting networks, phone betting, and real-time handheld devices”:

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RE: Fed Crackdown on Online Poker Money Transfers (2)

PokerStars refunds, bank account seizures, grand jury subpoenas

by , Jun 9, 2009 | 12:24 pm

The latest on Federal online poker funds crackdown and legally questionable anti-poker court actions …

Pokerstars has confirmed with its players that indeed, some payout funds have been frozen in American banks — but they’ve credited back affected monies with a 10 percent inconvenience bonus and an invitation to try again, Gambling911 reports.

If you wish to resubmit your cashout request, you can do so from our Cashier by selecting the check option (your new check will be issued on a different account and can be deposited as normal) or wire transfer (only available for amounts greater than [$2,500]).

But while Stars’ “take care of the player first” approach may be admirable, wiring money through a new financier may just be a temporary solution to eCheck problems affecting thousands of players — a little game of financial cat and mouse (+ good-will PR) while a bigger, costlier legal battle takes shape.

Under advisement from the DOJ agent, a federal prosecutor in New York’s Southern District apparently got a magistrate to sign off on seizure orders last week for multiple American bank accounts connected to PokerStars payouts. The court also issued subpoenas (warrants?) for two individuals to appear before a grand jury on June 18.

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Minnesota vs. Online Gambling; Barney Frank, Wire Act to the Rescue?

Perspectives Weekly

by , May 1, 2009 | 12:20 pm

The state of Minnesota has decided to use the 1961 Federal Wire Act to target the online gaming industry, at the very same time Representative Barney Frank has decided to target the UIGEA for repeal! All this and a friendly warning for players and webmasters.


Party Poker Cofounder to Plead Guilty, Pay $300m Fine

by , Dec 15, 2008 | 5:46 pm

Online poker software creator Anurag Dikshit agrees to pay off the US gov for his “crimes”.

From the Financial Times: Party Poker co-founder Anurag Dikshit will appear in the Southern District Court of New York Tuesday to plead guilty to violating the Wire Act, pay a $300,000,000 fine and cooperate with the Department of Justice in the hopes of avoiding a 2-year jail sentence.

Dikshit currently owns 27% of Party Gaming, but it appears he won’t have to divest his holdings in Party after pleading guilty. Ruth Parasol and Russ DeLeon, who also co-founded Party Poker, don’t appear to be near any type of settlement with the US government. Party Gaming has been negotiating with the Department of Justice for some time now; could this mean their eventual return to the US if and when Internet gaming is regulated?

More on this developing story later…

UPDATE: Party Gaming has released their own press release stating that they are still in final negotiations with the US Dept. of Justice in terms of a settlement, and that they will pay a substantially lower amount to the US government than Dikshit. At the time of this update, they’re up over 25% in trading today.

5pm UPDATE: Dikshit has entered his plea, and is free on a $15m bond, which limits him to travel within the European Union, India and New York. He has also already paid $100,000,000 with another payment due in 3 months, and the rest by September. Also, he’s scheduled for sentencing December 16, 2010. Further details here.