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In a clarification, which has been described as a surprise Christmas present to the online gambling industry, the Department of Justice (DoJ) made its opinion known on two issues. The first was that henceforth the infamous Wire Act of 1961 would apply only to sports betting. The second was that states could license and regulate non-sports related intrastate online gambling. The legal opinion issued by the DoJ was in response to inquiries from New York and Illinois about online lottery sales and a letter written by Senate Majority Lead Harry Reid (D-Nev.) and Senator Jon Kyl, (R-Ariz.) asking for clarification on the legality of online gambling.

The letter from the DoJ was signed by Assistant Attorney General Ronald Weich. Weich acknowledged that the Department was altering its view on the Wire Act after its Office of Legal Counsel (OLC) reviewed the law. Earlier, the DoJ had maintained that the Wire Act covered all types of online gambling. Weich wrote, “Although the OLC conclusion differs from the Department’s previous interpretation of the Wire Act, it reflects the Department’s position in Congressional testimony at the time the Wire Act was passed in 1961.” It may be recalled that the DoJ had prosecuted PartyGaming founders under the Wire Act not long ago. Weich gave the green signal to New York and Illinois stating that online lottery sales would not violate the law.

However, Weich stopped short of stating that online poker is legal. He made it clear that if a state banned online poker then the DoJ would investigate and prosecute the offenders under the UIGEA and other sections of the criminal code. The other ominous warning was, “If Congress wishes to give the federal government greater enforcement authority over non-sports related Internet gambling, it could do so by amending the Wire Act.”

The online poker advocates responded quickly and favorably. John Pappas, executive director of the Poker Players Alliance said, “This is a much needed clarification of an antiquated and often confusing law. This will provide policy makers at both the state and federal level with the legal confidence to move forward with licensing and regulation of online poker and other non-sporting activity within their respective jurisdictions.” With this clarification Nevada is in position to become the first state to offer intrastate online gaming to its residents. Pappas called upon the federal policy makers to seize the moment and enact federal licensing and regulation laws.

Full Tilt Poker has been a beleaguered entity since Black Friday. Its operations have stopped, its license has been revoked by the Alderney Gambling Control Commission and no one has been willing to touch it even with a barge pole. But now there have been reports that a settlement has been brokered. And this has not been done by Phil Ivey, or by the bigwigs at Full Tilt Poker, but by the Department of Justice (DoJ).

In the first step Full Tilt Poker will have to forfeit all its assets to the DoJ. The current owners will have to reach a settlement in the civil lawsuit filed by the DoJ. There will be no action taken by the DoJ against current Full Tilt owners who have not yet been named in the indictments. However the cases against those named will be pursued. The DoJ will then sell the assets of Full Tilt Poker to Groupe Bernard Tapie (GBT), a French firm, for $80 million. GBT will have the responsibility for paying back the Full Tilt players outside the U.S., while the DoJ will have the responsibility of paying back the American players.

The American players, who reportedly have claims of $150 million, will have to apply to the DOJ for compensation. The legalese involved in the draft agreement uses the term “make whole”, which in simple terms means that if the balances of the players includes any winnings then those would be deducted while making the settlement. GBT has indicated that it would pay back customers outside the United States by giving them a stake in the reincarnated company.

The U.S. Attorney’s Office for the Southern District of New York refused to comment on the report. However, attorney for Full Tilt Poker Jeff Ifrah did speak to a poker news service. He said that at present the agreement exists between the DoJ and GBT and specifies the terms for the sale of the Full Tilt assets. But the DoJ does not have the assets yet, so will need to obtain them. It is not clear what has to happen for the DoJ to obtain those assets. As matters currently stand Full Tilt Poker has denied the civil suit’s allegations. So the wait for the Full Tilt players is far from over.

Sufficient time has elapsed since the events of Black Friday and the online poker world has settled down to a new steady state. The latest report from the online poker tracking site Poker Scout gives a clear picture of who is where.

Before Black Friday it was Full Tilt Poker and PokerStars on top with Absolute Poker following some way behind in third place. All these three were the target of Black Friday. Now Full Tilt Poker and Absolute Poker are out of the picture but PokerStars reigns supreme. According to the Poker Scout statistics the latest seven day average traffic at PokerStars was 23,800. This excludes the traffic of 2,050 at the PokerStars Italian domain and 1,740 at its French domain. This is six times the traffic at the number two player and roughly equal to the traffic at the next nine sites or networks.

Next among the stand alone sites are PartyPoker with traffic of 4,050 and 888 Poker with traffic of 2,100. PartyPoker left the United States online poker market in 2006 and cleared its slate with the Department of Justice last year. It is now waiting for legalization of online poker in America to happen. The only other stand alone online poker site in the Poker Scout top ten is the French domain Winamax.

In online poker networks are fairly common. These service a number of online poker rooms and increase player liquidity. The largest online poker network and number two on the Scout Poker list is the iPoker network with traffic of 4,150. iPoker is the network of the leading software provider Playtech. iPoker Italy is listed separately and draws traffic of 1,200. The next online poker network is Ongame, which without its Italian and French networks has traffic of 1,980. Microgaming again without Italian and French networks is number nine on the combined list with traffic of 1,380.

It does not come as any surprise today that in the top 25 players in the Scout Poker list only three still offer services to American online poker players. At number 12 is Merge network with traffic of 1,100; at number 13 is the stand alone Bodog poker site and at number 18 is the Cake Poker network.

Before the April Black Friday indictments, Full Tilt Poker and PokerStars were by far the leading online poker rooms globally. They were drawing fantastic traffic, they had the best poker professionals on board and they had just tied up with leading land casinos. What happened after the Department of Justice indictments was completely different for PokerStars and Full Tilt Poker.

PokerStars has paid back its American players, is operating the online poker room outside the United States and is all set to kick off its annual WCOOP event. Full Tilt Poker does not have the funds to pay back its American players and is unable to operate anywhere in the world. It is still struggling to take a step forward. Full Tilt Poker issued a statement last week that expressed its complete helplessness in the matter. Even before Black Friday happened the government had seized $115 million of player funds located in U.S. banks. A key payment processor had stolen $42 million. The statement also referred to “unprecedented issues with some of its third-party processors that greatly contributed to its financial problems.” And the swift and drastic action from the Department of Justice was never anticipated. Despite this, Full Tilt Poker has held discussions with several groups of outside investors, six of whom have visited Dublin to inspect the operations. One of these was backed by Phil Ivey who was a luminary at the online poker room when it was up and running. Nothing has materialized. Full Tilt Poker has now engaged an additional financial advisor through an investment banking group “to assist us in our search for an infusion of cash as well as a new management team to restore the site and repay players.”

From the way the PokerStars has been able to stabilize its operations and Full Tilt Poker has not, there are rumors of things not being in shape at Full Tilt Poker even before Black Friday. A payment processor, Bradley Franzen, has informed the U.S. government that Full Tilt Poker was dealing with a $60 million shortfall earlier in 2011 and this could be just the proverbial tip of the iceberg.

While the poker world is preoccupied with the Main Event at WSOP 2011, the online poker room PokerStars is chugging away. The tribulations of the recent months following Black Friday have slowed down the progress on the Road to 100 Billion, but have not deterred it from the path.

The next mega milestone on the road to 100 billion is 65 million. The payouts will begin from the 64.7 billionth hand. Thereafter every millionth hand milestone will award prizes to the participants in that hand with the 65 millionth hand awarding mega prizes. Players dealt into a milestone hand win a cash prize of $50 for every VIP Player Point they earned in the previous 50 hands played on that table in addition to a base prize of $50. The winner of the milestone hand will get the prize doubled. There will be 300 regular milestone hands before the 65th billion mega milestone hand. In the mega milestone hand, all players dealt in will be rewarded $500 for every VPP earned in the previous 50 hands plus a base prize of $500. The winner of the mega milestone will have his prize money doubled, and will also receive a bonus of $65,000.

The first milestone hand is expected to be dealt on Monday, July 18. The mega milestone hand has been forecast to be dealt around Tuesday, July 25. This promises a bonanza week for PokerStars players. The 60 billionth mega milestone hand was dealt on March 22 and was won by “Pogo650” from the Isle of Man. He took home $102,090 at a $5/$10 Limit Hold’em table. The other players dealt in the hand each collected between $11,040 and $21,045 depending on their VPPs, and close to $200,000 was awarded in total.

Like other indicted online poker rooms, PokerStars has had subdued representation at the WSOP 2011 Main Event. Its most high profile representative Daniel Negreanu finished 211th position with a cash prize of $47,107. PokerStars has come out of its crisis in an admirable manner. It has paid back players in full. Its licensor in the Isle of Man has assured all customers that their funds are safe and that it fully supports PokerStars.