This may not be a popular opinion in these parts, but the more I think about it the more I support the government’s actions.  Let me clarify.  I am against criminalizing online poker, am against arresting players, and am against shuttering the sites.  But I’m also against people that flaunt the laws of the U.S. by engaging in subterfuge and deceit.  People that bribe bank officials and lie to regulators.  People that break the law not to prove some moral principle but to make money.  And that’s what the poker sites did (according to the government at least).  They wanted to make as much money as possible despite laws designed to stop their activities.  Rather than just lobby to change the laws, they covered up their activities by lying to banks (who are on the hook financially and legally for accepting banned payments) and, failing that, bribed some of them to ignore the law.  I sympathize with the underlying cause — online poker — but cannot support anyone that openly breaks U.S. laws.  As an American I cannot.  Our legal system is just too important to the stability and prosperity of our society.  It is a value I will not sacrifice, even if it means sacrificing poker played from the comfort of my couch, in boxer shorts.

Owners of three of the largest online poker sites — Full Tilt Poker, Pokerstars, and Absolute Poker — were charged with violating the UIGEA by defrauding banks into believing that the shell companies to which online poker money was funneled were legitimate entities.  This obviously is a massive development.  It signals the U.S.’s intent to crack down on online gambling (including poker), its willingness to enforce the UIGEA, and the banks’ opposition to gaming (rather than pushing to repeal the UIGEA).  It also could be a foreshadowing of the closing of the major sites and the federal government’s willingness to oppose intrastate online sites (and certainly the District of Columbia’s recent efforts, since it is subject to federal law).  We all need more time to digest this.  I will be posting more thoughts in the near future.  Stay tuned. 

(Oh, one final thought.  The department of justice does not rush indictments.  This was a case that it had been developing for some time but keeping quiet.  Wonder why they chose now to release the hounds.  The D.C. law?  Bank pressure?  Random coincidence?)

Party Gaming co-founder, Anurag Dikshit, pled guilty in NY federal court to a 2-year old charge of violating the 1961 Wire Act.  Rather than risk two years in prison he took one year probation and agreed to pay a $300 million fine.  The poker industry’s reactions are mixed:  everything from merriment (because PartyPoker may return to the U.S. eventually) to disgust (because Dikshit’s plea gives legitimacy to a bogus law).  Even the district judge on the matter expressed concern that the law is not being enforced equally because U.S.-based companies, such as FullTiltPoker, are not being prosecuted.  (The half-glass full people read this as the law should not be enforced at all; the glass half-empty people read this as a federal judge suggesting the Department of Justice should prosecute FullTilt and other sites.)  Whatever it is, I am sure Dikshit is happy.  Two years in prison, even a white collar Hilton, is not fun.  He now gets to move on with his life and spend the boatloads of money he has left.  From his perspective, can’t argue with that logic.  Sometimes folding on the turn is the best option.

As you may recall, Kentucky recently sued PartyGaming under an apparently antiquated law seeking to recover gambling losses.  In the first major step of its legal defense, PartyGaming filed a motion to dismissthe lawsuit.  Its primary line of attack is jurisdictional, meaning procedural (yet still very important) technical reasons why the state cannot sue PartyGaming.  These include that the state lacks standing to sue and PartyGaming was not provided the complaint in accordance with the required laws.  PartyGaming’s secondary line of attack contains the more substantive arguments, such as that the state cannot identify any “losers” and the law was not intended to apply to online gambling. 

Motions to dismiss are common in litigation.  Sometimes they even are granted.  Clearly, PartyGaming has a significant interest in the outcome.  But beyond the direct litigants, poker experts are looking keenly at the decision as even a ruling against PartyGaming could provide direction for how to handle future litigations.  Stay tuned.

Hot on the heels of PokerStars’ withdrawal from Washington after the state’s Supreme Court confirmed its ban on online poker, Full Tilt has announced that it too is considering prohibiting Washington residents from playing on its site.  If FTP withdraws it will be yet another body blow to Washington residents and visitors, and online poker generally.  Perhaps I should not say if, but when.  Withdrawing is the prudent move for Full Tilt, and, frankly, one that could potentially safeguard the site at large for players from other locations.

PokerStars, the world’s largest online poker site, has banned all real money play from residents of and visitors to the State of Washington.  PokerStar’s complete statement and a little more color is included in Cardplayer.com’s description of this major development.  The gist of PokerStars’ reasoning is that in light of the recent Washington Supreme Court ruling, it is clear that the state criminalizes online poker and, more to the point, that the questionable legality of the issue no longer is in doubt.  At least to the level that PokerStars feels comfortable taking the risk.  (Another factor in the site’s thinking likely is the potential that the U.S. will legalize online poker in the next few years, and the rumor that sites that operated illegally prior to that time will be banned.) 

Clearly, I disagree with the decision by Washington.  However, I do not disagree with PokerStar’s decision.  While tragic for Washington residents and anyone considering a move to Seattle to rekindle grunge, it’s pretty much a no-brainer for a mega company like PokerStars.  The revenue from Washington, I assume, is a drop in the bucket of its overall U.S. revenues.  To risk significant civil — and criminal — penalties to earn that revenue (which may decrease anyway as a result of the effect of the law on the average player) would be foolish from a business standpoint.  Have no doubt, PokerStars is a company concerned primarily with its bottom line; it has no grander moral agenda. 

If you’re sitting at home in Olympia waking up and reading this for the first time, sorry.  But at least take solace in the knowledge that your money is safe (you still can withdraw funds) and if you ever decide to move from your parents’ home to another state you’ll be free to continue playing (just need to prove a change of residence to that new state). 

And if you have a friend who lives in Washington, do not pm him for a heads-up game on Stars.  That’s just cruel.

Many a young poker player (and some not so old at this point), cut their teeth on PartyPoker.  The golden days if you will.  These same players were devastated when PartyPoker decided to pull out of the U.S. market in the wake of the passage of the UIGEA.  In came FullTilt and PokerStars, primarily.  The games were not he same, but still a nice alternative.  FTP and PS made a reputed windfall at PartyPoker’s expense.  They won the short-term.  But the recent legislative push in the U.S. appears to be moving toward prohibiting licensing sites that violated the UIGEA.  Read: FTP and PS will be prohibited from operating while PokerStars (and other sites not currently operating in the U.S.) could be licensed.  Assuming this path is the one that ultimately is approved by Congress, PartyPoker (primed with its recent merger with Bwin) is on the precipice of another fortune.  Basically, a monopoly in the U.S. until other sites catch up (or FTP and PS reorganize under other names).  As any good poker player knows, you should view poker as one long session.  All that matters is good decisions and winning in the end.  PartyPoker is teaching this to poker players on a mega scale.  PartyPoker made what could be the best decision of them all (a strategic withdrawal from the U.S. for many years) to secure the long-term win (getting licensed and profiting indefinitely, and legally).  Poker players take note.  “Instant” gratification is fleeting.

Who says you can’t go home again?  PartyGaming has announced that they are ready to re-enterthe U.S. poker market, assuming the U.S. adjusts its regulations of course.  This is kind of like admitting you remember where you were when JFK was shot, or even when the Challenger blew up, but I remember playing on PokerStars.  Ah, the good ole days on online poker.  Could they actually be returning?  Let’s hope.

Denmark and PartyGaming have made an agreement that will see Party working with Denmark’s state gambling provider, Danske Spil.  PartyGaming will be the exclusive provider of Internet poker and casino platforms for five years.  This agreement is expected to be put into effect in 2011.  More agreements between online gaming companies and government run gambling institutions are expected as Europe continues to regulate its online betting markets.