On Friday, April 15, 2011, the federal Department of Justice (“DoJ”) disclosed its grand jury indictments of the founders of the three largest poker operators then taking money bets from U.S. players, as well some payment processors and a Utah bank official.[1] The DoJ also released a civil complaint[2] and a press release.[3] Then, on May 23^rd, the U.S. Attorney for Maryland announced his own grand jury indictments of two more Internet gaming companies and three individuals.  Although the Maryland charges are serious – illegal gambling[4] and money laundering[5] – and involve one fairly well know name, Doylesroom.com, they appear to be based on sting operations and have not had much impact on the world of online poker; at least, not compared with the uproar and fear engendered by Black Friday.

In the April 15^th legal actions, the federal government sought a minimum of $3 billion in forfeitures and civil money laundering penalties.  The local U.S. Attorney obtained an order from the District Court for the Southern District of New York, “restraining approximately 76 bank accounts in 14 countries containing the proceeds of the charged offenses.”  The federal government was able to instantly arrest three of the named defendants, found in the United States.  A fourth was arrested in Guatemala a week later and was detained in Miami, apparently having not fought extradition.

The most dramatic, immediate action by the prosecutors was to secure a warrant for arrest in rem from the Court, allowing the DoJ to seize the domain names of five of the largest Internet poker sites.  The warrant was served on the central registrar.  This had the immediate impact of preventing not only Americans but everyone in the world from using those sites to play poker for money, including countries where it was 100% legal.  It is not even clear that online poker is illegal in every state and territory of the U.S.  Yet, the DoJ also effectively froze the money deposited by hundreds of thousands of American players, who had done nothing wrong.

The impact on the online gaming world was immediate and dramatic.  Many players were panicked.  “Headlines in the poker media say it all: ‘The Shit Hits the Fan,’ ‘Poker Panic ’11, ‘Thunderstruck: The Day It All Changed for Online Poker.’”[6] Eerily reminiscent of attempts by major industrialists to stave off the Great Stock Market Crash of 1929, some professional poker players attempted to prevent a run on the bank by saying they would “guarantee” the money that regular players had in two of the poker sites.[7] Of course, their offer of a few million dollars could have actually made the situation worse, since players knew that hundreds of millions of dollars had been frozen.

The situation became more surreal when stories like this appeared: “Poker accused follows bail hearing with marriage to former Playboy playmate.”[8]

The 52-page Superseding Indictment contained nine counts: violation of the Unlawful Internet Gambling Enforcement Act (“UIGEA”),[9] conspiracy,[10] illegal gambling business (“IGB”),[11] bank and wire fraud,[12] and money laundering.[13] The criminal charges were carefully structured for maximum legal and public relations impacts.

Prosecutors always like to charge conspiracy.  It’s a crime that is easy to prove, requiring only that jurors believe there is an agreement to commit another crime, and a step taken in furtherance of the conspiracy.  Conspiracy also allows ways around barriers to convictions, like the hearsay rule and the number of juror challenges allowed each side.  Testimony by a cooperating witness, “He told me he was going to take sports bets from the U.S.,” would normally not be allowed in as evidence.  But, “He asked me if I wanted to help him set up a site to take sports bets from the U.S., and I agreed” comes in under the conspiracy exception to the hearsay rule, to prove there was an agreement.

Note the federal government’s legal papers and press release prominently repeat the word “fraud.”  With Internet gambling, prosecutors have tried to find ways to include fraud whenever possible.  For example, among the 22 counts in the criminal complaint filed against BetOnSports was a charge of mail fraud, for falsely advertising that sports betting was legal from the U.S.  The DoJ’s actions on Black Friday help create the impression among common players that online sites cannot be trusted.

It is significant that the indictment leads off with the UIGEA.  This appears to be the first major case involving that terribly flawed statute.  In fact, it is one of the very first times that any prosecutor has charged any defendant under the act.  This very public indictment reinforces the false impression that the UIGEA made a substantive change in the law; i.e., that Congress made Internet gambling illegal by its passage.  Actually, the UIGEA is merely an enforcement statute that does not change substantive law.  If an operator is already violating some other federal or state anti-gambling law, then it can be charged with an additional felony for receiving money from players for restricted transactions.

Money laundering is a commonly used count in gambling prosecutions, because the penalties are based on the volume of money that was transferred, not on the gaming operations’ actual profit and lose.  Prosecutors can obtain plea bargains, including pleas of guilty to illegal gambling charges that would otherwise be dismissed, by threatening defendants with many decades of imprisonment and forfeiture of their entire assets, if they are convicted of money laundering.

Most of the bank fraud counts involve defendants lying to banks to disguise the fact that online poker was involved.  Phoney companies were allegedly created and transactions labeled as sales of jewelry and golf balls.  It will be interesting to see if a jury can be convinced that bank fraud exists when the supposed victims, the banks, are tricked into making millions of dollars, without ever being charged themselves with a crime or even faced with civil penalties.

The indictment sets forth facts that would seem to call for a count of bribery, if true.  Some of the defendants paid a small Utah bank $10 million to buy 30% of the bank, so that the bank would agree to transact online poker payments that the bank was reluctant to do.  According to the indictment, the bank was so small that the officer and part-owner who allegedly arranged the deal, asked for, and received, only $20,000 himself.  The indictment is careful to call this payoff a “bonus” rather than a bribe.  The banker was charged with conspiracy and being part of the other activities constituting crimes.  This avoids the question of who exactly was the victim, since it was the banker who solicited the payment.  It also gets around the problem of whether a briber and bribee can also be charged with being coconspirators.

Almost all of the DoJ’s legal action depend on the underlying activity, online poker, being illegal.  The problem for prosecutors is that the main federal anti-gambling statue, the Wire Act,[14] has been held in a published federal Court of Appeal decision, to be limited to bets on sports events and races.[15] Since the Wire Act won’t work, prosecutors used the IGB.  That statute makes it a federal felony if five or more people do more than $2,000 in business a day in violation of state gambling laws.  The indictment relies on “New York Penal Law 225 and 225.05 and the laws of other states.”

There are obvious problems with both the indictment and complaint.  The federal government of the United States seized the dot-com names of poker sites that were licensed by foreign jurisdictions, including the Isle of Man, Costa Rica and the Kahnawake Mohawks in Québec, Canada.  This raises not only due process issues, but both national and international concerns.  Assuming the operators were violating New York state’s anti-gambling laws, does this mean that players in other states could not participate?  More importantly, there are other countries, including the United Kingdom, where there is no doubt that neither the players nor operators were violating any law.  Besides the international outrage created by these seizures, the DoJ created a dangerous precedent.  There are many Islamic countries which outlaw not only the sale of alcohol beverages, but its advertisements.  Do they now have the right to seize the worldwide domain names of every retailer and restaurant that advertises beer or wine?

The freezing of players’ funds around the world was also a public relations disaster.  Even in the U.S., there is no federal law against merely playing poker on the Internet, even with an illegal operator.  Approximately half the states do have laws, usually ancient, on the books that might make it a crime to merely make a bet, but these are never used in practice against players.  In the other states, including in New York, anti-gambling laws simply do not apply to mere players.

Even in the states where making poker bets online might be illegal, there are again questions of due process.  The money frozen was not all wagers.  It was a mix of money deposited for both wagers and purchases from the sites’ stores, and winnings and other credits paid to players.  The UIGEA only applies to payments going from players to operators for illegal online gambling, not the other way around.  Do all the bank accounts that were seized only contain money being sent by players in New York to the poker sites?  Was none of it money won by players?

The bank accounts seized were in 13 foreign countries.  No attempt was made to show how the money in an account, in, say, Panama, was related to illegal gambling that had to take place in New York to violate New York’s anti-gambling laws.

Black Friday saw widespread panic among players, and the threat of a worldwide bank run on online gaming operators.  By Wednesday, the DoJ appeared to realize it had way overstepped its power, and that it was losing the public relations war.

On April 20, Preet Bharara, the U.S. Attorney in Manhattan who had seized the domain names, announced that an agreement had been reached with PokerStars and Full Tilt Poker.  Technically, the dot-com names remain seized.  But the DoJ would now permit the companies to operate money games outside of the U.S., which they always had the legal right to do anyway.  American players can also go to the dot-com sites and get their deposits back.

Bharara issued the following statement:

No individual player accounts were ever frozen or restrained, and each implicated poker company has at all times been free to reimburse any player's deposited funds.  In fact, this office expects the companies to return the money that U.S. players entrusted to them, and we will work with the poker companies to facilitate the return of funds to players, as today's agreements with PokerStars and Full Tilt Poker demonstrate.[16]

Technically true, but misleading.  There was no easy way for players to get their money, since there was no way to get around the FBI warnings on each site to log on.  There is no evidence that Bharara told the operators they could refund players' deposits, nor how they were suppose to do that.

The first announced agreements were only with PokerStars and Full-Tilt.  Those companies have licenses and approvals by foreign jurisdictions, including France, Italy and Alderney, which they want to protect.  They also would like to someday return to the U.S., once the laws are changed.  Absolute is licensed by the Kahnawake tribe in Canada and has always taken the position that it does not have to be overly concerned with the laws of Canada, the U.S., or any other jurisdiction.  So it is standing tough.  In fact, it is still accepting money players from the U.S.

PokerStars was able to refund 100% of players’ deposits, while, as of this writing, Full Tilt and the others have not.  Full Tilt, faces additional legal problems:  Its Alderney license was revoked and lawsuits were filed against it by disgruntled players and at least one of its professional poker player partners.  And now the DoJ has called it a Ponzi scheme, which, along with its failure to return deposits, has real-world consequences that far outweigh all the rest.  After all, the companies were not charged with any crimes themselves.  But any company that loses the trust of the online poker community, say, by not paying back players’ money that was supposed to be in secure escrow accounts, will soon be out of business.

As for the DoJ, its public relations problems will be compounded enormously if any of the counts are dismissed.  Prosecutions in the U.S. require that there be a valid statute on the books that make the activity illegal and a defendant who is physically present in the courtroom.  The DoJ lacks both of these prerequisites, when it comes to the operators of online poker.

The only anti-gambling statutes included in the legal papers are New York’s misdemeanor prohibitions.  There are obvious problems with using a state misdemeanor statute to charge federal felonies against foreign corporations licensed by foreign countries.

The DoJ also included a “thank you” to the Washington State Gambling Commission in its press release, indicating that it might try to use that state’s 2006 law outlawing all Internet gambling,[17] as well, as the predicate crime.  The statute was upheld by the State Supreme Court,[18] and it does make Internet gambling a felony.

Still, there are problems.  State laws are presumed not to reach beyond their borders, unless they expressly say they do.  Nevada has such a statute.[19] Senate Bill 318, signed into law in 1997, explicitly makes it a crime in Nevada for anyone, anywhere in the world, to take a bet online from someone who is physically present in Nevada.  But specifically basing this attack on Internet poker on Nevada law would look like it was motivated by the landbased casinos.  After all, who are the big winners here?

Even if there were a solid federal anti-gambling law that covered international online poker, the operators will never stand trial, unless they voluntarily return to the U.S. or make some other mistake.  The only U.S. extradition treaty I have found that covers illegal gambling is with Hong Kong.[20] Calling it bank fraud won’t work, since the defendants can show their local courts that it is based on gambling.  The DoJ has been trying to extradite the founders of the World Sports Exchange for decades.  One of the founders and co-owners, Jay Cohen, voluntarily returned to stand trial.  But Antigua has refused to turn over his partners, who are apparently still operating and taking sports bets from the U.S., even after the DoJ added charges of money laundering and organized crime.

Extradition also requires dual criminality.  The activity must be illegal in both countries.  No nation will extradite an individual to be tried for the very activity that that nation licensed.

The U.S. may have a chance with Absolute Poker.  That operator is not licensed by a state or country, but by a tribe in Canada.  Both the federal government of Canada and the province of Québec have publicly stated that they do not believe the Kahnawake Mohawks have the power to issue licenses.  Canada also has a Mutual Legal Assistance Treaty with the U.S. which, unlike an extradition treaty, does not require dual criminality.[21]

The criminal indictment against the principals of PokerStars, Full Tilt and Absolute was unsealed by the U.S. Attorney for New York on April 15, 2011.  Why then?  In a blog,[22] I wrote that the timing was suspicious.  The grand jury had been meeting for more than a year.

Maybe this just happened to be when the cases came together, when investigators had verified all the information about bank accounts they got almost exactly a year before.  The source was apparently Daniel Tzvetkoff, arrested in April 2010, apparently turned in by these very same websites for embezzling tens of millions of dollars while doing their payment processing.  In fact, the Superseding Indictment of Black Friday is the Tzvetkoff indictment; only his name no longer appears as a defendant.  It is safe to assume that he cut a deal, turning over information leading to these bigger fish, and will swim away free.

So, maybe it was merely a coincidence that developments in Spring before Black Friday had given Internet poker an air of respectability, a feeling that legalization was inevitable.  Nevada regulators had approved Caesars Entertainment’s partnership with 888, a company that used to take bets from the U.S.  Steve Wynn had upped the stakes by announcing a joint venture with PokerStars, which was still accepting American poker players.  The Nevada Assembly Judiciary Committee had approved a bill to regulate online poker.  And the District of Columbia had actually made it legal.

The DoJ has been waging a war of intimidation against Internet gambling for years, successfully scaring players, operators, payment processors and affiliates into abandoning the American market.

What is the federal government accomplishing with these legal actions?  Certainly the prosecutors are scaring a lot of people and making it difficult for average citizens to even get their money to a foreign site, let alone place and collect a bet.

But prohibition is not regulation.  When people want something, businesses arise to fill the demand.  How much more so when the activity, online poker, is not even clearly illegal?

If the commercial goods or services are not legal, then by definition, the organizations will be criminal.  Prohibition created modern organized crime, by outlawing alcoholic beverages.

Every action by the federal government makes it more difficult for it to go after the next operator.  The UIGEA, rammed through by the failed politician Bill Frist (R.-TN), scared all of the publicly traded gaming companies out of the U.S. market.  It thus became harder to know who the real owners were, or where they were located.

Then prosecutors went after payment processors, making it more difficult for players to find legitimate ways to send their money to betting sites.  The vacuum was filled by foreign operatives, not subject to controls by the U.S.

Now the feds have seized dot-com domain names and charged operators with bank fraud.  So, gaming sites are switching to dot-eu, dot-uk, etc., and cutting off all physical contact with the U.S.  Even the present American operators can’t be extradited, so what hope is there for the DoJ to bring future foreign operators here to stand trial?

Scaring away well-known poker names means that newcomers, some of whom will undoubtedly be undesireables, will take their places.  If the multi-billion-dollar U.S. online poker market becomes too risky for licensed companies, operators without any licenses, who won’t even reveal what country they are in, will be glad to run the games.

The DoJ has decided to escalate its war of intimidation against Internet poker.  In a development that is fairly startling, the DoJ has now turned to propaganda.  That's a nice way of saying, "Lies."  In September, 2011, Bharara issued a new statement: “Full Tilt was not a legitimate poker company, but a global Ponzi scheme.”[23]

You would think that saying that the owners of Full Tilt committed fraud would be enough.  That is, after all, all that the latest charges, brought in an amendment to the civil suit, actually allege.[24] But saying that something is a Ponzi scheme is guaranteed to get worldwide attention, since that phrase has been so much in the news in recent years.

Even if the allegations are true, Full Tilt was not a Ponzi scheme:  “A form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.”[25] According to the DoJ, Full Tilt apparently tried to get around the UIGEA by using money from players in other countries to pay off U.S. winners.  This has nothing to do with a pyramid scheme.  However the payments were handled, there really were poker games.  Winners were only credited for what they won; losers debited for what they lost.  The company made its profits by raking the pots.

It does appear that Full Tilt’s insiders were greedy and stupid.  While the company was losing players, they continued to pay themselves tens of millions of dollars, including, allegedly, funds they had promised players would not be used for operating expenses.  Insiders, including poker-pros Howard “The Professor” Lederer and Christopher “Jesus” Ferguson, allegedly took out $443 million in the last 4 years – $42 million to Lederer alone.  The company now has about $60 million in banks, and owes players $390 million.

Full Tilt’s plan to use foreign players’ funds to pay Americans could not possibly work.  The laws of conspiracy and aiding and abetting easily see through accounting tricks.  Ironically, it was also unnecessary.  The UIGEA does not care where winning players’ money comes from.  The only crime created by the UIGEA is receiving payments from American players; it is not a crime, under the UIGEA, to send payments to the U.S.

The crisis was created in part by the DoJ’s own questionable activities.  Prosecutors seized Full Tilt’s dot.com name around the world.  This not only prevented it from earning money in countries where its activities are 100% legal, it scared away foreign customers who had the absolute right to play poker online.

So who are the winners and losers?

Traffic on the seized sites seems to be down, in some cases precipitously.  Absolute and the other sites that can’t or won’t return player deposits obviously have trouble attracting new players, let alone reloads.  But Americans must have quickly discovered that they can sign up to PokerStars through its dot-eu site.  And other sites that pulled out of the U.S. have sometimes made up for the loss in their customer base by increasing player incentives.

Many sites are afraid.  Even the industry-leading BoDog is pulling out of the American market.  They understand that even though they might have been violating U.S. laws up to the time they take their last U.S. wager, the DoJ will have no interest in them, once they have been scared away.

Media outlets which depend on poker ads were also hit hard.  There is no reason to spend money on PokerStars.net commercials if players can't be converted onto PokerStars.com.  That is probably the real reason for ESPN cancelling so many poker TV shows.

Traffic on rival sites that continue to take bets from the U.S. have increased, but not spectacularly.  Players do have their favorites, and don't necessarily trust the other sites.  Plus, much of their money is still tied up.

Purely European companies, like Playtech, and the not-quite Internet poker sites are also doing well.  PurePlay.com, a subscription poker site with free alternative means of entry, based in San Francisco, received $2.8 million in new funding after Black Friday.  And Atlantis Internet Group Corporation, which is setting up legal closed-circuit computer linked poker on Indian land, saw its stock rise 400% in a few days.

Brick and mortar card clubs and casino cardrooms have seen modest increases in the number of poker players.  But even after PokerStars returned players’ funds, there was not much increase for casinos in trouble.  The crackdown on its competitor, Internet poker, was not enough to save Atlantic City.

In the long run it will probably be the largest landbased operators, like Caesars, and online sites which had already pulled out of the U.S., led by Bwin-Party and 888, that will be the biggest winners.  The indictments reinforce proponents' arguments that the states should legalize intra-state poker, so that the operators and their computers and payments processors will be physically here to be taxed and regulated.

This helped spur mergers and acquisitions.  Landbased operators need expertise in online gaming.  So, International Game Technology, one of the largest manufacturers of slot machines, paid about $115 million for Entraction Holding AB of Stockholm, Sweden.  And Globes reported that Caesars paid an astonishing $40 million, or more, for 51% of Playtika, a one-year-old startup with cashflow of only $1.2 million a year and no profits.[26]

Black Friday also removed, again, the biggest operators and potential competitors.  Proponents had previously predicted that California could make $1.5 billion in fees and taxes in the next ten years if it legalized intra-state online poker.  After Black Friday, they increased their estimate to $2.5 billion.

The major obstacle is politics.  The same political and economic forces that allow us to even talk about legalizing Internet poker also stand in its way.  There is so much legal gambling in the U.S., that allowing one more form is no big deal.  But that also means there are well-established local operators who will fight to prevent outsiders from coming in to create new competition.

Each state will create its own formula for extracting as much money as possible without alienating existing local operators.  Atlantic City casinos companies have enough money that there is no reason to open New Jersey online gambling to foreign bidders.  In California there will have to be at least three licenses: one for a consortium of the state's card clubs, another for its gaming tribes, and at least one for an outside operator who can bring $100 million cash up front to the table.

Nevada casinos want a federal law to prevent them having to compete against politically powerful local operators in 50 different states – 51 counting the District of Columbia.  And politicians like Congressman Joe Barton (R.-TX) are jumping on the bandwagon.

Barton is one of the most conservative members of the House of Representatives.[27] He was one of the first to join the Tea Party Caucus.[28] Although he says he is for limited government, he is a Big Brother type:  He wants government in the wedding chapel, bedroom and doctor's office, particularly if you are female.

Yet, this extreme social conservative introduced a bill this year to legalize internet poker.[29] Why?

Barton is an avid card player, who admits to having played poker online.  But he was opposed to Internet gaming, until he saw the fundraising possibilities.  In a summary of his positions, the only gambling issue listed is: “Voted YES on banning Internet gambling by credit card. (Jun 2003).”[30] He also voted in favor of the UIGEA.  And he not only voted in favor of the Internet Gambling Prohibition and Enforcement Act in 2006,[31] he gave up the right to use his committee to even modify this anti-Internet gambling bill.[32]

On September 27, I, like probably everyone else registered for the Global Gaming Expo, received an email from Nicole Sarouphim.  She invited me to attend "a Reception in Honor of" Barton, at the Palazzo the afternoon before G2E started – for a suggested contribution of $1,000.  Checks to be made payable to "Congressman Joe Barton Committee."

I don't know Sarouphim from Adam.  But I can put the pieces together.  Her email is This e-mail address is being protected from spambots. You need JavaScript enabled to view it .  A quick search of the Internet shows that Sarouphim also goes by the name Nicole Porter Sarouphim.  Her father is Jon C. Porter, former three-term Congressman from Nevada and presently Chairman of the Western Republican Leadership Conference.

After being defeated in the Democratic landslides of 2008, Jon Porter became a lobbyist, developing a specialty of great interest to readers of Casino Enterprise Management.  According to opensecrets.org, here are the "Groups That Have Retained Porter Group" and the amounts they contributed so far this year:  Poker Players Alliance, $60,000; Progeny Systems (Internet supplier), $15,000; Reno-Tahoe Airport Authority,   $12,000; Ysleta del Sur Pueblo (Texas gaming tribe), $ 6,500.  This doesn't indicate there is anything shady going on.  But the money connection does explain why someone who is as socially conservative as Joe Barton is suddenly all excited about legalizing Internet poker.  Or, at least writing bills and appearing to be in favor of legalization.

The great worry is whether donors are simply being taken for a ride.  It is wishful thinking to expect any action out of this Congress.  The Republicans were rewarded in the 2010 elections for becoming the “Party of No,” and have openly and repeatedly stated that their number one priority is to defeat Barack Obama.  Congress has literally passed no new laws, other than naming some post offices and court houses, since the Republicans took control of the House of Representatives.[33] There is thus no chance that this Congress would approve legalizing Internet gambling as its only new substantive law.  So, the states are where the action is, and is going to be, until well after the 2012 election.

The DoJ has done what it could to make this indictment as frightening as possible. Bank fraud carries a maximum sentence of 30 years and a $1,000,000 fine. Money laundering also can lead to hefty penalties.  A defendant faced with 50 years in prison can be persuaded to plead guilty to illegal gambling charges that would otherwise be dismissed.

But we will probably never know just how strong the government’s case actually is.  The payment processing defendants who are now in the U.S. will fight for a while, but will eventually have to agree to plea bargains.

The others, especially the big fish, also won’t stand trial.  They would like to settle, even paying hundreds of millions of dollars and admitting they violated the law, but only if they won’t serve long prison sentences and risk losing their licenses in other countries.  The operators have one major bargaining chip:  If the DoJ won’t make a deal they can live with, they will simply stay away from countries where they might be extradited.

As a great irony, after devastating licensed overseas-based operators, the UIGEA has spurred the growth of many forms of Internet gaming.  It is so poorly written that its exceptions have been treated as if they were declarations of legalization.  This was aided by the adoption of final regulations, which went into effect on June 1, 2010.  Although the UIGEA was the product of an opponent of Internet gambling, an “anti,” the regulations make it clear that many forms of Internet gaming are, in fact, legal.

The main beneficiaries at first were games of skill, games with free alternative means of entry, interstate wagering on horse races and dog races, multi-state lotteries, fantasy sports leagues and linked progressive slot machines.  But the clear statement in the UIGEA that intra-state online wagers are exempt has led virtually everyone to believe that Internet gambling is now legal, if a state says so, and players are limited to individuals who are physically within that state.

New laws on Internet gaming are still being considered.  But the political forces in favor of prohibition, which had been triumphant, are now in retreat.  The lingering effects of the Great Recession are forcing elected legislators and governors to look for ways to increase revenues for the states.

The Great Recession tore enormous holes in state budgets, and legal gambling is often seen as a painless tax.  States have been looking at authorizing, and taxing, Internet gaming for years.  But they were always afraid of running afoul of federal anti-gambling laws.  Although the exemption for pure intra-state gaming in the UIGEA technically should only apply to the UIGEA itself, even the federal DoJ has informally told proponents that it will no longer try to argue that federal anti-gambling statutes like the Wire Act apply to gambling which is conducted entirely within a single state.  The exemptions in the UIGEA are taken as a declaration of policy by Congress that gambling is, once again, a matter left to the individual states.

Meanwhile, the DoJ has convinced the FBI to join its war of intimidation.  The FBI’s website,[34] states the following:

"If you've ever thought about visiting a cyber casino, here's something you should know:  it's illegal to gamble online in the United States...

That means: …No placing cyber bets on sporting events or in virtual card games; …No transferring money electronically for gambling; and …No wagers in offshore Internet casinos even if you live in the U.S."

The page is called “Online Gambling: Don't Roll the Dice.”  And it's completely untrue.  The FBI links on this page connect with statutes like the Wire Act, which, on their face, apply only go gambling businesses, not players.

The ultimate irony is that it was the UIGEA, written by a conservative Republican “anti” to outlaw Internet gambling that allowed the states to move forward.  For the UIGEA has an express exemption for purely intra-state online gaming.  Although other federal laws, like the Wire Act, could conceivably still stand in the way, virtually everyone, including federal agencies and the states, take the UIGEA as a clear expression of Congressional intent:  States are free, once again, to decide what they want their public policies to be about gambling within their own borders.

It is important to remember that not only did Prohibition create modern organized crime, it did not stop people from drinking.

I. NELSON ROSE

Professor I. Nelson Rose is a Distinguished Senior Professor at Whittier Law School and a Visiting Professor at the University of Macau, an internationally known scholar, author and public speaker, and is recognized as one of the world's leading experts on gaming law.

Prof. Rose is best known for his internationally syndicated column and 1986 landmark book, "Gambling and the Law®."  He is the co-author of Internet Gaming Law (1^st and 2^nd editions), Blackjack and the Law, and the first casebook on the subject, Gaming Law: Cases and Materials (LexisNexis).  Prof. Rose is co-editor-in-chief of the Gaming Law Review & Economics.

Harvard Law School educated, Prof. Rose is a consultant to governments and industry.  He has testified as an expert witness in administrative, civil and criminal cases throughout the United States, in Australia and New Zealand, including the first NAFTA tribunal on gaming issues.  Prof. Rose has acted as a consultant to major law firms, international corporations, licensed casinos, tribes and local, state and national governments, including the provinces of Ontario and Québec, the District of Columbia, the states of Arizona, California, Delaware, Florida, Illinois, Michigan, New Jersey, Texas, and the federal governments of Canada, Mexico and the United States.

With the rising interest in gambling throughout the world, Prof. Rose has addressed such diverse groups as the National Conference of State Legislatures, Congress of State Lotteries of Europe and the National Academy of Sciences.  He has taught classes on gaming law to the F.B.I.; at universities in Spain, France, Slovenia and China; and as a Visiting Scholar for the University of Nevada-Reno's Institute for the Study of Gambling and Commercial Gaming.  Prof. Rose has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, Canada, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

Prof. Rose can be reached through his website: www.GamblingAndTheLaw.com.

^[1] United States v. Scheinberg, et al. Copy available at  http://www.scribd.com/doc/53107543/Indictment-DOJ-vs-Scheinberg-Bitar-Tom-et-al.

^[2] United States v. PokerStars, et al. Copy available at http://www.scribd.com/doc /53170382/3bb-Civil-Complaint-DOJ-vs-PokerStars-Full-Tilt-UB-AP-et-al.

^[3] Copy available at http://www.justice.gov/usao/nys/pressreleases/April11/scheinbergetalindictmentpr.

^[4] 18 U.S.C. §1955.

^[5] 18 U.S.C. §§1956 and 1957.

^[6] “The Black Friday of Online Poker,” http://www.pokerblackfriday.com/page/2/ (April 16, 2011).

^[7] Brett Collson, “Tom Dwan, Phil Galfond Guarantee Payouts from PokerStars and Full,” Tilthttp://www.pokernewsdaily.com/tom-dwan-phil-galfond-guarantee-payouts-from-pokerstars-and-full-tilt-18836/ (April 19, 2011).

^[8] http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/8459881 /Poker-accused-follows-bail-hearing-with-marriage-to-former-Playboy-playmate.html.

^[9] Specifically 18 U.S.C. §§1563 and 1566.

^[10] 18 U.S.C. §371.

^[11] 18 U.S.C. §1955 [also known as the Organized Crime Control Act].

^[12] 18 U.S.C. §1349.

^[13] 18 U.S.C. §§1956 and 1957.

^[14] 18 U.S.C. §1084.

^[15] In Re MasterCard International Inc., 313 F.3d 257 (5th Cir. 2002), affirming 132 F.Supp.2d 468 (E.D.LA. 2001).  See also, Jubelirer v. MasterCard International, Inc., 68 F.Supp.2d 1049 (W.D.Wis. 1999).

^[16] Susanna Kim, “Two Shutdown Poker Sites to Return Poker Players' Money,” ABC News,http://abcnews.go.com/Business/shutdown-poker-sites-return-poker-players-money/story?id=13412260 (April 20, 2011).

^[17] RCW 9.46.240.

^[18] Rousso v. Washington, 170 Wash.2d ----, 239 P.3d 1084 (2010).

^[19] N.R.S. 465.091 to .094.

^[20] Article 2 (1) xxvii.http://www.expatintelligence.com/extradition-treaty-hong-kong.shtml (signed December 20, 1996).

^[21] Canada Treaty Service 1990/19 http://www.lexum.com/ca_us/en/cts.1990.19.en.html.

^[22] "Federal Poker Indictments: Revisiting Prohibition," http://www.gamblingandthelaw. com/blog/299-federal-poker-indictments-revisiting-prohibition.html.

^[23] http://www.nytimes.com/2011/09/21/business/poker-site-misused-players-money-us-says.html.

^[24] Copy available at http://online.wsj.com/public/resources/documents/FullTiltAmendSuit_Sept20_2011.pdf.

^[25] Google Dictionary.

^[26] Tali Tsipori, “Playtika's young founders win big on casino acquisition: The online gaming company's investors include former 888 CEO Gigi Levy and real estate developer Igal Ahouvi.”  http://www.globes.co.il/serveen/globes/docview.asp?did=1000646702&fid=1725 (May 18, 2011).

^[27] For a discussion of his stand on every issue, see http://www.ontheissues.org/tx/joe_linus_barton.htm.

^[28] http://dailycaller.com/2010/10/17/joe-barton-i-was-the-tea-party-before-tea-party-was-cool/.

^[29] H.R. 2366 Online Poker Act of 2011.

^[30] http://www.ontheissues.org/tx/joe_linus_barton.htm.

^[31] H.R. 4411 on 7/1/2006.

^[32] http://thomas.loc.gov/cgi-bin/query/F?r109:1:./temp/~r109LzRwpE:e169963:.

^[33] For a list of every law that Congress has passed in 2011, see http://www.congress-summary.com/B-112th-Congress/Laws_Passed_112th_Congress_Seq.html.

^[34] "Online Gambling: Don't Roll the Dice," http://www.fbi.gov/news/stories/2007/june/gambling_060607.