FBI Action is Game Changer for US Market
Posted on 18th April 2011 in Gaming
The online gaming fraternity will long remember April 15, 2011, as ‘Black Friday’, the rather predictable christening name for the day when the FBI shut down the biggest international poker sites in the US market. The indictment charges eleven people associated with PokerStars, Full Tilt Poker and Absolute Poker with bank fraud, illegal gambling offences under UIGEA and money laundering.
The ‘seizure’ of the domain names has blocked all US consumers from access to the sites; for example, PokerStars players were met with the message “We are sorry but, due to government regulations, playing real money ring games is not allowed in your area”. However, each site’s operations outside of the US appear to be operating as normal; which questions the accuracy of the term ‘seizure’ in the wording of the indictment.
Reaction to the FBI’s action has been widespread. One UK City analyst told iGaming Business that, “This caps what has been a dramatic few weeks for the online gaming industry. Clearly, this will have a significant impact on liquidity and confidence in the respective sites. I would expect this could have a knock-on effect on their European operations. It also raises the question of what might happen to their European licenses. If the authorities remove these then this could create a seismic shift in the market.”
Hilary Stewart-Jones, Partner at Berwin Leighton Paisner LLP, also spoke to iGaming Business, stating, “Conspiracy theorists had long claimed that the seeming indifference of the DOJ was only to allow those few high profile operators still deriving benefit from the US to amass such fortunes that the windfall for the DOJ would be immense when the swoop happened,” she said.
“However, before the virtuous non-US operators crow too much, one can’t escape the fact that UIGEA is badly drafted and, effectively, did not change existing federal and state laws. A test case is long overdue.”
David Fried, a California-based lawyer, also weighed in to the debate. “This indictment may be a game changer internationally in a world that PokerStars and Full Tilt have dominated since 2006,” he said.
“It sets up a long overdue legal showdown: is Internet poker illegal in the US? The UIGEA does not answer that question. So the government will have to rely on the 1961 Wire Act, which was aimed at sportsbetting, and an assortment of state laws. Regardless, the fall out is immense.”
He continued, “In the US, PokerStars and Full Tilt’s march to Nevada alliances and legitimacy at a time when individual states are considering allowing ring-fenced games, has been broken. They may not be on the starting line for new regulated markets, including California. What about European regulated markets? Will the details that spill out affect licensing in other jurisdictions?”
We can only wait to see.
Source : http://www.igamingbusiness.com (http://www NULL.igamingbusiness NULL.com/)