Poker Blog & Poker Forum

It has now been three weeks since Black Friday, but the ripples continue to be felt practically on a daily basis. The contribution of American online poker to the global industry is immense and the closure of the three biggest American poker sites is bound to have an impact.

PokerStars had announced the schedule and prizes for its SCOOP mega tournament before Black Friday. The tournament will go ahead on May 8 as planned, but the prize pool has been cut to almost 50%. The absence of American players will reduce the collections that PokerStars would make through buy-ins and the online poker room has thus been forced to cut down on what it will give away. The total prize pool over all events has been reduced from $45 million to $25 million. The flagship event of the tournament is the high buy-in No Limit Hold’em Main Event. The prize pool of this event has been reduced from $5 million to $2.5 million.

Absolute Poker seems to be the worst hit of the trio of American online poker sites. It has failed to come to an agreement with the Department of Justice for securing the release of its domain name in order to refund the balances of its American players. This delay is fuelling rumors that Absolute Poker and its sister online poker room UB.com could file for bankruptcy. Bianca Gaming, which is a subsidiary of these American poker sites, has shut shop and issued the statement that it is currently unable to make any payments toward its debt obligations and that it has no cash on hand and no prospects for any cash flow for the foreseeable future. Absolute Poker has refuted these rumors. There are other problems being faced by Absolute Poker. The downsizing of operations in Costa Rica has left employees in a disgruntled mood and they are threatening to leak information to the Department of Justice.

Chad Elie was one of persons arrested by the Federal authorities following Black Friday. He had recently married Playboy Magazine’s Miss January 2005, Destiny Davis. The Feds have moved to seize the Las Vegas mansion that Destiny was living in, because it had been purchased by Elie for a sum of $1.5 million.

Life is an amazing phenomenon. While some life gets extinguished somewhere, new life comes into existence somewhere else. This very phenomenon occurred in the world of online poker. On April 15 the Department of Justice seized the domain names of three US poker sites and on the same day Hustler launched its online poker room. The brick and mortar version of Hustler Casino opened in 2000 in Gardena in California. It is owned by Larry Flynt, the publisher of the adult magazine “Hustler” (in picture).

The Hustler online poker room can be accessed at http://www.hustlercasinola.com. But do not expect a plethora of naked girls or even scantily clad ones at the web site. However, the brazenness is evident. The most visible statement on the poker room web site is “Has your online poker site been seized by the FBI? Try ours today!” The statement goes on to add that the Hustler online poker room is completely legal, totally free and ready now.

That the new online poker room will leverage the brand of Hustler Casino is both expected and valid. A prominent display is the announcement of the A Night of Poker tournament that will be hosted by the recently engaged Annie Duke at the Hustler Casino. The event will take place on May 7 from 5.00 PM. The buy in is $225 and the first prize is a $10,000 Seat at the 2011 World Series of Poker Main Event. All players will receive an official tournament t-shirt and hat. And even though it is not an endorsement of the online poker room by Annie Duke, it makes great marketing sense to have her name there.

The Hustler online poker room apparently does not as yet offer cash games. But it has announced daily, weekly and monthly online tournaments for cash prizes and packages like holiday getaways. There even prizes with for players with the best records at the online poker room.

Larry Flint is a self styled poker aficionado who has been entering events in every WSOP. It matters little to him that he has been spectacularly unsuccessful at the tables. The only time that he has been in the cash was in 2000. Flint finished in eighth in a limit seven card stud event and won $10,100.

Black Friday has become the accepted term for the April 15 indictments against US poker sites Poker Stars, Full Tilt Poker and Absolute Poker. Law makers like Barney Frank and lobbyists like the Poker Players Alliance have condemned the indictments with righteous indignation. However, poker professionals have by and large been quiet on the issue and those who have spoken out have been quite circumspect.

The reason is that most of the well known poker professionals are brand ambassadors of one of the indicted US poker sites. The legal complications that could arise out of one wrong statement are too huge to fathom. Therefore they are all playing it by the ear. Daniel Negreanu, who represents Poker Stars, acknowledged this in his blog. “I’ve been advised to not discuss the matter at this point, which makes perfect sense to me…” He commiserated with those who have been financially hit by the closure of the three domains, especially the “professional poker-playing grinders who are supporting a family”. While the interim can be bad, Negreanu was hopeful about the future because poker is loved all over the world and cannot be made to disappear.

Annie Duke recently left Absolute Poker and she does not now represent any online poker site. But her brother Howard Lederer has a big stake in Full Tilt Poker. Like Negreanu, Annie expressed concern for those who had lost a means of livelihood and was also worried about her brother.

One can always trust Doyle Brunson to against the grain. Despite him running an online poker site, he could not resist making a dig at online players. Doyle Tweeted, “Now maybe we will see if these online “superstars” can play real poker. Ante up suckers!” This comment was not taken kindly to by the common online poker playing fraternity and much of the response he received contained explicit unprintable abuse. Doyle did retract saying that, “I guess when u have almost 400,000 followers, u had better be careful what u tweet. Does anyone in their right mind think I don’t feel bad?”

On the actual developments in the case, Poker Stars and Full Tilt Poker have entered into an agreement with the US Attorney for the Southern District of New York by which their domains are being released for the specific purpose of returning balances to players. Absolute Poker is discussing the terms of the agreement with the authorities and will take a call very soon.

The US online poker world was shocked last Friday when action initiated by the Department of Justice (DoJ) led to virtual shut down of the three biggest US poker sites. An indictment unsealed in the Southern District of New York charged the founders of Poker Stars, Full Tilt Poker and Absolute Poker with serious financial offences. Since most of these individuals are currently outside the United States, the authorities have enlisted assistance from international agencies for their arrest. The DoJ has also seized all the US domains of these online poker sites and American players are no longer able to access Poker Stars, Full Tilt Poker and Absolute Poker. The DoJ is also seeking a penalty of $3 billion from these three US poker sites.

The charges faced by the indicted persons go far beyond operating illegal online gambling sites. The legal opinion seems to be that the DoJ would not be able to make the illegal online gambling charges stick. However, according to the indictment the major charges are bank fraud and money laundering under the UIGEA. It has been alleged that the three US poker sites showed the funds received from US online poker players as payments made to fake online merchants for merchandise such as jewelry and golf balls. In fact three persons involved with the processing of payments have been arrested. Chad Elie and Bradley Franzen are payment processors and John Campos is from Sun First bank in Utah, which actually processed the payments.

As of now Poker Stars, Full Tilt Poker and Absolute Poker can be accessed by players from jurisdictions outside the United States. Poker Stars has even indicated that it is willing to pay the amounts in balance to those American players who can demonstrate a having a bona fide second address outside America. But for how long this will continue is anybody’s guess.

Reactions from the online poker industry have been trickling in. Black Friday is the common name being given to this fateful day. Online poker columnist Aaron Todd has given April 15, 2011 a more sentimental name – “the day that online poker died”.

Anurag Dikshit is one of the three founders of PartyGaming and the software architect of the online gambling operator. Prior to the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in late 2006, PartyGaming and its three founders were prosecuted by the United States federal authorities under the Wire Act, which forbids accepting online wagers. This forced PartyGaming to exit the American online gaming market and the three founders to leave the country. PartyGaming now operates from the United Kingdom and is quoted on the London Stock Exchange. PartyPoker is its online poker portal.

In 2008, Dikshit arrived at a settlement with the federal prosecutors. He filed a guilty plea and agreed to forfeit $300 million. However, at that time it was reported that Dikshit could face up to two years in jail when the case came up for hearing. The case was heard last week in a New York court and no prison sentence was awarded to Dikshit. The judge sentenced him only to one year’s probation. This was because the prosecutors did not seek any jail time for Dikshit. Dikshit has made a clean break from PartyGaming. In 2009 he sold two thirds of his 28% stake in the company for an estimated £188 million. Earlier this year he sold his remaining shares. It has been reported that currently Dikshit is engaged in charity work in South Asia. Dikshit had been criticized by none other than Doyle Brunson for folding up like an accordion and pleading guilty to breaking some kind of mystery law.

The other two founders of PartyGaming, Ruth Parasol DeLeon and Russell DeLeon, are living in Gibraltar and have refused to settle with the American authorities. Judge Jed Rakoff, who presided over the hearing, pulled up the prosecutors for not charging the DeLeons who are US citizens. Dikshit on the other hand has kept his Indian citizenship despite living in America for many years. The company PartyGaming has also settled with the American federal authorities for its activities in America before the UIGEA was enacted. In April 2009 PartyGaming agreed to pay $105 million to clean its slate. This was a prerequisite for its merger with Bwin and also essential if it wanted to return to the American market as and when online gambling was legalized there.