4 gaming operators are facing various criminal charges from the USA for unlawful internet gambling enforcement act 2006, violating the illegal gambling business act, bank wire fraud and money laundering.  The US Justice Department has focussed on PokerStars, Full Tilt, Absolute Poker and Ultimate Bet with the intention of cutting them out of the market to stop online gaming by US citizens.

Impact On The Players

• US players will not stop gambling, they will move to less reputable organisations based in locations that are not regulated
• In these locations players will not have the protection of fair games and are unlikely to be playing with socially responsible operators.
• US poker players with funds on deposit are unlikely to get that money out.
• Professional poker player sponsorship deals are drying up and the tournaments they play in and TV shows are being cancelled.
• Professional players will leave online and go land-based while they work out what to do next.

Impact On The Operators

• There is likely to be a boom in operators based in unregulated locations.

• European operators will benefit as the American marketing funds dry up and they will now be able to compete on a level playing field.
• The IOM and Alderney have operators licensed there whether or not the dirt will stick it’s too early to tell.
• If the major operators are victorious Congress will have to listen to and  regulate resulting in a flood of new operators

The key points of the case against the operators

• The justice department did not allege a violation of wire tapping act 1961
• The Illegal gambling business act requires breaking of State Law in order to trigger violation of federal law – this could be a pivotal issue.
• The bank wire act charge is tricky – it will be very interesting to see how justice department can bring allegations to the banks which were “tricked into making millions of dollars.”
• They are asking to confiscate $3bn from 75 bank accounts as proceeds of illegal activity.
• Gambling allegations require the prosecutor to show that the operator violates New York State gambling law, and that states that for a criminal charge to take place chance has to predominate over skill.  Meaning that a skill game is not gambling. Therefore, the prosecutor has to prove operators violated New York State statue – which maybe very difficult.

What does this all mean?

The criminal charges are forcing a massive change in the industry, there is a risk that the Justice Department will not only fail in their endeavours to make online gaming illegal but push players to unregulated jurisdictions filled with questionable operators potentially resulting in less of a paper trail and more chance for fraud and money laundering.