A thriving online poker industry catering to Americans but operating from abroad to evade U.S. gambling laws could be wiped out by criminal charges against top executives in the business. Eleven people, including the founders of the three largest poker sites open to U.S. players, were charged by a federal grand jury with bank fraud, money laundering and violating gambling laws. The government also is seeking to recover $3 billion from the companies. The FBI had shut down two of the sites, Full Tilt Poker and PokerStars, by Friday evening and were working to do the same with the third, Absolute Poker. Online visitors were greeted with a message saying, "This domain name has been seized by the F.B.I. pursuant to an Arrest Warrant," and an enumeration of federal anti-gambling statutes and penalties. An estimated 8 million to 10 million Americans play poker online for money; thousands of them earn their living on the sites, according to a players advocacy group. Congress tried to shut down the industry by enacting an anti-gambling law in 2006, but most sites found ways to work around the vaguely worded measure.Other coverage included an interesting piece from The Hill, which quotes Rep. Barney Frank (D-Mass.) commenting on the events. Frank has long been a leading advocate for legalizing online gambling.
I was interviewed about the matter by Gambling Compliance, which describes itself as "a team of legal, regulatory and finance professionals who specialise exclusively in providing high level and independent analysis of the global gaming market to our clients...The team is based in the USA and Europe and we pride ourselves on providing the most comprehensive, accurate and up to date information services coupled with cutting edge technology and world class client support."
In short, I was asked whether the arrests and the possible seizing of assets should concern offshore sportsbooks which are in very similar circumstances to the online poker sites targeted this week (based outside the U.S. though with a significant clientele [and typically at least some portion of the operation] in the States). The piece, penned by James Kilsby, is available to subscribers only, but the takeaway is as follows. My opinion, shaped in no small part by my interviews with federal law enforcement officials during the research for Gaming the Game, is that offshore sportsbooks should be very worried. For whatever reasons (perhaps the dire need for funds to help offset the government's financial woes, as some have posited), the feds have apparently taken an interest in offshore sites that everyone knew about long ago but which were never the subject of serious enforcement scrutiny until now.
Here is a Bloomberg TV interview of Kilsby, an editor for Gambling Compliance, about the momentous events:
Kilsby Calls U.S. Internet Poker Charges `Game... by Bloomberg