An online poker player thought he hit it big on the Sunday before Memorial Day. David, a 41-year-old from Virginia who wanted only his first name to be used, won a USD 10,000 entry to the World Series of Poker Main Event.
David was playing at PokerStars.com when he won the tournament entry. He was sent a check from the online poker room and was told to cash it, so that he can buy into the WSOP Main Event for USD 10,000.
He took the check from the check processing company ‘Account Services’ and attempted to cash it on Wednesday, but the check bounced. What he initially thought was a mistake turned out to be an unprecedented move by the US Government to crack down on online poker. That move has so far affected around 27,000 people.
Late last week, the federal government ordered five banks to freeze a payments worth USD 30 million owed to players from companies that process payments from two offshore gambling sites, according to the Poker Players Alliance, a group that represents the interests of the companies and players.
"It's not like the government went after the money the site made, instead they seized money that belonged to me," David said. "There is no law that restricts citizens from recovering money."
According to the alliance, US federal prosecutors working out of New York's Southern District ordered Citibank, Wells Fargo and three smaller banks to freeze funds in accounts belonging to Allied Systems and Account Services, companies which process funds for the poker sites.
Some affected players who gamble at the sites FullTiltPoker.com and PokerStars.com first realized that they could not access funds in their accounts over the weekend, when checks issued from the companies bounced.
Online poker, a USD 9 billion to USD 12 billion a year industry, is legally in a grey area, experts say. Washington is the only state with a law that bans residents from playing on the Internet. The sites themselves, however, are not allowed to operate in the United States and are all registered overseas.
"There is no legal precedent for what the government is doing," said John Pappas, executive director of the alliance. "We contend playing online poker is not unlawful. The government is going after the players' money, not that of the sites. The fact is, there is no federal law banning online poker," he said.
Though the government maintains that online gambling is illegal, the US attorney's office in New York would not comment on the case or confirm that an investigation was under way.
According to federal documents obtained by AP, a judge in the Southern District of New York issued a seizure warrant last week for an account at a Wells Fargo bank in San Francisco. The AP reported that the documents also showed that a federal prosecutor told a bank in Arizona to freeze an account.
In a letter dated Friday and faxed to Alliance Bank of Arizona, Arlo Devlin-Brown, the assistant US attorney for the Southern District of New York said that accounts held by payment processor Allied Systems Inc. are subject to seizure and forfeiture "as they constitute property involved in money laundering transactions and illegal gambling offenses," according to AP.
In another letter, Devlin-Brown asked the bank to treat the funds "as legally seized" by the FBI, saying that the government has probable proof that gambling payments made by US residents had been directed to offshore illegal Internet gambling businesses, the AP reported.
A source at Citgroup familiar with the government request, however, confirmed the "bank has been contacted and is cooperating" with the authorities. According to the alliance, the laws cited by prosecutors "appear to allege violations of the Wire Act and the Illegal Gambling Business Act" and not to a more recent piece of legislation on online gaming called the Unlawful Internet Gambling Enforcement Act.
Another player, Sam Friedman, a 24-year-old accountant from New York City who plays every night in tournaments on FullTiltPoker.com, said he realized the company had last week removed an option to deposit winnings directly into his Citibank account.
"There are lots of ways to deposit and withdraw money and payment options are always disappearing, but something didn't seem right," Friedman said. "I can't believe the government is reaching into people's bank accounts like this," he said. "For a lot of serious players this is their lifeblood. This is how they make ends meet."
Both FullTiltPoker.com and PokerStars.com have reimbursed players who tried to cash out and were unable to. “In the light of recent events involving the freezing of certain accounts, Full Tilt Poker would like to assure all players that their funds remain safe and secure," spokeswoman Michelle Clayborn said in a statement.
"All players who were affected by the current situation have had their funds returned to their accounts," the statement said. David, the World Series hopeful, said he had been reimbursed by PokerStars and given an additional 10 percent credit.
He used his own savings to buy into the World Series and will use the winnings from his championship game online to pay himself back as soon as he gets them, he said.
David was playing at PokerStars.com when he won the tournament entry. He was sent a check from the online poker room and was told to cash it, so that he can buy into the WSOP Main Event for USD 10,000.
He took the check from the check processing company ‘Account Services’ and attempted to cash it on Wednesday, but the check bounced. What he initially thought was a mistake turned out to be an unprecedented move by the US Government to crack down on online poker. That move has so far affected around 27,000 people.
Late last week, the federal government ordered five banks to freeze a payments worth USD 30 million owed to players from companies that process payments from two offshore gambling sites, according to the Poker Players Alliance, a group that represents the interests of the companies and players.
"It's not like the government went after the money the site made, instead they seized money that belonged to me," David said. "There is no law that restricts citizens from recovering money."
According to the alliance, US federal prosecutors working out of New York's Southern District ordered Citibank, Wells Fargo and three smaller banks to freeze funds in accounts belonging to Allied Systems and Account Services, companies which process funds for the poker sites.
Some affected players who gamble at the sites FullTiltPoker.com and PokerStars.com first realized that they could not access funds in their accounts over the weekend, when checks issued from the companies bounced.
Online poker, a USD 9 billion to USD 12 billion a year industry, is legally in a grey area, experts say. Washington is the only state with a law that bans residents from playing on the Internet. The sites themselves, however, are not allowed to operate in the United States and are all registered overseas.
"There is no legal precedent for what the government is doing," said John Pappas, executive director of the alliance. "We contend playing online poker is not unlawful. The government is going after the players' money, not that of the sites. The fact is, there is no federal law banning online poker," he said.
Though the government maintains that online gambling is illegal, the US attorney's office in New York would not comment on the case or confirm that an investigation was under way.
According to federal documents obtained by AP, a judge in the Southern District of New York issued a seizure warrant last week for an account at a Wells Fargo bank in San Francisco. The AP reported that the documents also showed that a federal prosecutor told a bank in Arizona to freeze an account.
In a letter dated Friday and faxed to Alliance Bank of Arizona, Arlo Devlin-Brown, the assistant US attorney for the Southern District of New York said that accounts held by payment processor Allied Systems Inc. are subject to seizure and forfeiture "as they constitute property involved in money laundering transactions and illegal gambling offenses," according to AP.
In another letter, Devlin-Brown asked the bank to treat the funds "as legally seized" by the FBI, saying that the government has probable proof that gambling payments made by US residents had been directed to offshore illegal Internet gambling businesses, the AP reported.
A source at Citgroup familiar with the government request, however, confirmed the "bank has been contacted and is cooperating" with the authorities. According to the alliance, the laws cited by prosecutors "appear to allege violations of the Wire Act and the Illegal Gambling Business Act" and not to a more recent piece of legislation on online gaming called the Unlawful Internet Gambling Enforcement Act.
Another player, Sam Friedman, a 24-year-old accountant from New York City who plays every night in tournaments on FullTiltPoker.com, said he realized the company had last week removed an option to deposit winnings directly into his Citibank account.
"There are lots of ways to deposit and withdraw money and payment options are always disappearing, but something didn't seem right," Friedman said. "I can't believe the government is reaching into people's bank accounts like this," he said. "For a lot of serious players this is their lifeblood. This is how they make ends meet."
Both FullTiltPoker.com and PokerStars.com have reimbursed players who tried to cash out and were unable to. “In the light of recent events involving the freezing of certain accounts, Full Tilt Poker would like to assure all players that their funds remain safe and secure," spokeswoman Michelle Clayborn said in a statement.
"All players who were affected by the current situation have had their funds returned to their accounts," the statement said. David, the World Series hopeful, said he had been reimbursed by PokerStars and given an additional 10 percent credit.
He used his own savings to buy into the World Series and will use the winnings from his championship game online to pay himself back as soon as he gets them, he said.
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