US Signs $731 Million Settlement Deal with Poker Companies
As per the terms of a settlement agreement signed between the US government and two online poker rooms, the US government will receive a sum of $731 million, part of which will be spent in refunding poker players who were cheated of their money by one of these poker rooms.
The US Department of Justice (DoJ) recently announced that the deal has been finalized. It will allow PokerStars, the world’s largest online poker room, to acquire Full Tilt Poker, its one-time rival, which was based in Ireland. PokerStars has revealed its plan to re-launch Full Tilt Poker in the European market within 90 days.
The terms of this settlement deal got the approval of federal judges who were handling the Black Friday cases of money laundering, bank fraud, and illegal gambling filed against the two poker rooms by the US government.
The US federal government had accused Full Tilt Poker of being a massive Ponzi Scheme that had cheated its players worldwide of nearly $440 million while simultaneously putting money in the pockets of its chief executive officers and board of directors. Owing to this, Full Tilt Poker was unable to repay its players after the US government cracked down on it, as it had not managed player funds well.
The US government had also accused Absolute Poker and Full Tilt Poker of bank fraud, illegal gambling, and money laundering.
According to the terms of the recently finalized deal, Full Tilt Poker will give all its assets to the US government. PokerStars will give a sum of $547 million to the US government, which will use part of these funds to repay ex US players of Full Tilt Poker. The beleaguered online poker room’s US poker players, who claim that the company owes them money, can now claim it directly from the US DoJ.
Preet Bharara, US attorney, said, “We are pleased to announce these settlements by Full Tilt Poker and PokerStars, which allow us to quickly get significant compensation into the victim players’ hands. Today’s settlements demonstrate that if you engage in conduct that violates the laws of the United States, as we alleged in this case, then even if you are doing so from across the ocean, you will have to answer for that conduct and turn over your ill-gotten gains.”
Online gambling is not exactly illegal in the US, but the Unlawful Internet Gambling Enforcement Act of 2006 makes it illegal for banks and financial institutions to process gambling related funds. Despite this Act, PokerStars, Full Tilt Poker, and Absolute Poker continued operating in the US and devised ways and means to dodge the law and fool banks into processing gambling related funds. On April 15, 2011, the US DoJ finally cracked down on these companies, seized their domain names, and indicted key people associated with these companies on multiple counts of illegal gambling, bank fraud, and money laundering. Cases against 11 individuals are still pending as the recently finalized deal has nothing to do with the criminal cases booked against these individuals.
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