A young man wearing a dark gray hoodie knelt down beside me in church. I couldn’t help overhearing his prayer:
Mea culpa, mea culpa, mea maxima culpa. I’m a self-made multimillionaire. I take calculated, aggressive risks with my own money. I prefer online gambling to betting around an antiquated poker table. Yes, I am socially inept, I live in sweatpants and I don’t remember the last time I dated an attractive girl. But, I do make piles of money and I can create jobs for media professionals, advertisers, web developers and bankers. Forgive my personal success, my New York penthouse and my killer sports car. Forgive my social awkwardness. If I recklessly bet away my wealth, I alone will suffer. Let me play online poker.
I felt sorry for this young gamer who was bemoaning “Black Friday:” On April 15, 2011, the Department of Justice and the FBI clamped down on the online gaming industry that does business in the United States. The DOJ charged the founders of the three largest internet companies, Absolute Poker, PokerStars and Full Tilt Poker, plus eight other defendants, with illegal gambling offenses, money laundering and bank fraud.
No individual player was charged with criminal activity, however, the DOJ seized five key internet domain names and put restraining orders on over 75 defendant company bank accounts that process payments, effectively freezing online poker in the U.S.
I realize that the DOJ must uphold U.S. law. Except for laws still on the books it doesn’t care for, like Clinton’s DOMA. But, this case sets a frightening precedent for the DOJ to essentially destroy a $6 billion industry and dampen entrepreneurship overnight.
The DOJ cites the Unlawful Internet Gambling Enforcement Act (UIGEA) in this prosecution. The integrity of UIGEA is suspect because dirty politics played a key role in passing it. On Oct. 13, 2006, presidential hopeful and then-Senate Majority Leader Bill Frist slipped UIGEA through Congress by attaching it to a high priority port security bill, in an obvious attempt to win political favor.
The New York Times notes that the law is also vague and fails to clearly articulate that online poker is criminal activity. Additionally, portions of this prosecution cite state gambling laws while the three defendant companies operate overseas where federal law governs international commerce. So, it’s not entirely surprising that foreign-based poker companies persisted in servicing the U.S. market.