Way back in 2006 when the UIGEA first passed I made some posts detailing how easy it would be for the US government to shut down online gaming in the US. I took a lot of heat for those posts. Sadly, many people decided to attack me personally and even sadder is the fact that based on IP addresses and such I have a good idea who some of those people are and I suspect they are people I know personally.
My arguments were always based on the ease of tracing online poker funds. It really is easy for any idiot or government employee (if that isn’t redundant) to trace money in the online poker world. Where players deposit and withdraw their funds is the most obvious place to set up checkpoints.
I’ll be the first to admit that I made some bad calls on exactly how aggressive the US gov would be in trying to stop online gaming. I thought they would go after gaming with a vengeance once they had an actual law in hand.
While they did go after Neteller and a few selected targets the US seemed like a paper tiger. They put up a good show but they actually did very little to stop the spread of online gaming.
But now that the US government has seized $30 million in player funds smack in the middle of the WSOP many people are beginning to wonder if the paper tiger might have some teeth.
In some ways I feel a bit vindicated because I said this was exactly how easy it was for the government to get into the ass of the online poker industry but at the same time I can’t really be happy that so many players have been impacted.
Just to recap what I have been claiming all along: All the government has to do is set up an online poker account and deposit and withdraw funds. Once they have the account numbers of the receiving and sending banks it’s simply a matter of getting a warrant to seize the funds. Since the government can get warrants faster than online poker sites can set up new payment processors it was an easy assumption that they could choke off the money supply.
The latest seizures are far from a crippling blow to the industry. $30 million is less than a month’s revenue at many sites. They can afford to dip into their own pockets and make the players whole. But my point from the beginning has been that the US government could have been doing this on a weekly basis. All they need is the routing numbers of the banks facilitating the transactions. That was my point all along and why I sounded a bit Chicken Little in my analysis.
I really hope this is a one time shot across the bow and not a trend by US prosecutors. It’s odd that it comes when there is growing support for online gaming but who knows what ambitions a prosecutor might have.
Bottom line is that if it wasn’t obvious before it should be obvious now that choking off the money flow to offshore gaming sites is not a hard task if someone is determined enough.
Photocred goes to josephpetepickle
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Hi, my name is Bill Rini and this is my poker blog. I've been blogging about poker and the poker industry since around 2003-ish. Like most people I started out playing poker as entertainment in home games whenever we wanted to sit around and smoke cigars, drink beer, and eat pizza, and needed a good excuse. I started playing online shortly after the first online card rooms opened and it wasn't long before I was playing 20, 30, or even 40 hours a week or more. One day I received a phone call about a program manager position at Tiltware which was the company that consulted to Full Tilt Poker on software development and marketing. After Tiltware I spent about 2.5 years working at Party Poker where I was the poker room manager.
{ 1 comment… read it below or add one }
What people seem to be forgetting and the US Attorney loves to conveniently forget to mention. This $30 million was not “Seized” it was merely “Frozen” pending a criminal process. They have had the funds “Frozen” pending investigation of a violation of the Wire Act and “Money Laundering” charges not violations of the UIGEA.
The Wire Act charges will be easily set aside. The Money Laundering charges could be more difficult depending on how they are worded but should eventually be set aside as well. “Frozen” assets still continue to accrue interest since they are still in the bank. I just hope Stars and Tilt had some sort of interest bearing accounts.