DOJ Shutters Popular Poker Sites in Crackdown on Online Gambling Operations
Posted Apr 18, 2011 8:10 AM CDT
By Molly McDonough
Federal authorities on Friday unsealed a sweeping anti-illegal gambling indictment and shuttered popular online poker sites, accusing founders of money laundering and bank fraud.
The U.S. Department of Justice seized five of the companies' domain names, seized accounts and held money stored by players, many of whom make their livings playing poker.
The Wall Street Journal reports that the crackdown comes after years of tension between the sites and the U.S. government, which has long held that online gambling is illegal. The case will be closely watched because operators and players have argued that poker is a game of skill and is not gambling, the WSJ reports.
Meanwhile, Steve Wynn and other Las Vegas casino operators quickly canceled partnerships with online operators, the Financial Times reports.
In 2006, Congress passed a law forbidding financial institutions from processing transactions related to online gambling. This prompted many sites to leave the U.S., but to continue catering to U.S. players.
The WSJ, citing figures from PokerScout, says the sites oversaw $16 billion in wagers from U.S. players last year, largely from popular sites Full Tilt Poker and Poker Stars.
The Justice Department maintains that companies avoided the federal ban on electronic transfers by creating fictitious websites and fake companies to convince banks that their sites weren't involved in Internet poker, according to the WSJ.