US Online Poker Rooms Lose Domains in Seizure

April 15th, 2011 by | No Comments

The federal government today unsealed an indictment against the founders of two of the world’s largest online poker companies.

Federal prosecutors officially announced the indictment of Isai Scheinberg, founder of PokerStars and Raymond Bitar, founder of Full Tilt Poker, as well as nine other people.

The U.S. Attorney in Manhattan also announced Friday that the government had seized five internet domain names used by the three main companies operating in the U.S. and that a federal judge has issued a restraining order against 76 bank accounts in 14 countries that are used by those online poker companies.

The government also announced it is bringing a $3 billion civil lawsuit against all individuals; the government alleges that the poker companies laundered money by disguising money they’ve received from U.S. poker players. The suit contends that the companies disguised the payments by making them look like payments to online merchants selling golf balls and jewelry.

The 51-page indictment filed in federal court in Manhattan argues that Full Tilt, PokerStars and Absolute Poker, “used fraudulent methods to avoid restrictions and to receive billions of dollars from United States residents who gambled.”

All the online poker companies in question operate offshore; PokerStars is operated from the Isle of Man, while Full Tilt is run from Ireland. Although the U.S. government officially argues that online poker is illegal in the U.S., many online poker companies have argued that because poker is a game of skill and not chance, it doesn’t violate any federal law.

The online poker rooms recently go the help of a powerful ally in the form of Steve Wynn, owner of Wynn Resorts, who announced last month a strategic partnership with PokerStars; Wynn hopes to help get online poker legalized in the United States. He said at the time that while “the justice department has an opinion, but several states have ruled and courts have agreed that poker is a game of skill; it’s not gambling. PokerStars rests their argument on that.”

Making that argument just got decidedly harder, however. PokerStarsWynn is now a question mark and it is currenlty not known how this will effect the relationship.

Poker Stars has announced they will continue operating for players outside the us at the web address: pokerstars.eu.