How ironic: our last post talked about the bright future for online poker after Steve Wynn (Wynn Resorts Ltd.) and the Fertitta Brothers (Station Casinos) formed strategic partnerships with PokerStars.com and FullTiltPoker.com, respectively. Now, days later, indictments against the heads of these poker companies plus AbsolutePoker.com and UltimateBet.com Poker have been unsealed, charging principal owners with illegal online gambling, money laundering, and wire fraud. Likewise, each company’s payment processors have similar charges against them.
Those indictees currently in the USA have been arrested, while the FBI is coordinating with Interpol to arrest others in foreign countries. Bank accounts of these online poker giants have been frozen. Payment processing for USA customers has ground to a halt. The FBI has also contacted ICANN (Internet Corporation for Assigned Names and Numbers) to block all USA access to each poker site. Anyone from the USA who tries to visit these websites is greeted with a warning and brief explanation of the indictment, courtesy of the FBI.
This unexpected turn of events comes as a surprise to many would-be USA poker players, while industry insiders agree that this type of legal action was inevitable: it was only a matter of time before major offshore gambling sites were going to be taken down. The “too good to be true” quiet period following the infamous BetOnSports.com case has now passed, and once again, the USA government is in high gear against online gambling.
How did all this come about? At current time, details of the exact nature of the investigation and indictment process are still unclear. One interesting scenario has surfaced. A major payment processor, Daniel Tzvetkoff of Australia, who was initially charged with the same crimes as these poker companies months ago, may have gone state’s evidence, trading jail time for a tell-all story about some of the world’s largest online gambling companies.
In some respects, this was a bright move by Tzvetkoff. His original Las Vegas arrest obviously struck a chord (See: Poker Indictments: Daniel Tzvetkoff May Have Given Up The Online Poker Industry To The Feds). After a “secret meeting” with his case’s prosecutors, charges were put aside in exchange for his in depth knowledge of online poker payment processing, bank account locations, and individuals responsible for collecting payments from USA customers. He also knew how to trace transactions to the offshore poker companies, making him a valuable asset to taking down targets larger than himself.
The only non-poker related indictee was a Utah banker who took a bribe in exchange for processing payments from USA players. Utah doesn’t allow any form of gambling, and he must of thought this would have kept his operation under the radar. Unfortunately, FBI research, combined with Tzvetkoff’s testimony, unearthed his scheme, ultimately adding him to the indictment as an accessory to illegal offshore gambling, money laundering, bribery, and fraud.
The government seeks billions in restitution, and at this point it’s questionable whether or not individual poker players will be able to safely withdraw funds from their accounts. It will be interesting to see whether or not prosecutors give precedence to recovering all the laundered cash, or let players cash-out first and then take what’s leftover.
The bottomline: after considering Tzvetkoff’s selfish actions, it’s clear there is STILL no honor among thieves. Recent events have turned the offshore gambling world upside-down, prompting Bonne Chance, the parent company of many Rival Gaming casinos, to no longer accept USA players. Most importantly, there’s no telling if more indictments are on the way.
While the USA has never been closer to legalized and regulated online gambling – the result of bills proposed at both the federal and state levels – it seems the government is still hell bent on getting rid of offshore gaming, in what might be considered an overture to eventual legal USA online gambling. Keep your ear to the rail: this story is far from finished.
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