Feds Seize Poker Websites; Founders Indicted

from the guilty-until-proven-innocent dept

It appears that the federal government has really fallen in love with its new found ability to simply seize whatever websites they don’t like. The latest is that the FBI (not DHS this time) has seized the three largest online poker websites, PokerStars, Full Tilt Poker and Absolute Poker, and indicted the founders of those sites. Some have already been arrested with warrants out for the others. Because, you know, poker is destroying society or something. While at least this time it actually commenced legal actions in association with the seizures, the more the government does this, the more it’s going to make sure this new favorite tool (domain seizures) gets shot down by the courts.

First of all, whether or not those sites are illegal is something of an open question. Back in 2006, as part of a bill to protect our ports and harbors (I’m not kidding), Congress passed a “ban” on online gambling. But it’s been a pretty open question as to whether or not poker sites really applied. There are questions as to whether or not poker is a game of skill or chance, with at least one court saying that it was the former, and thus not necessarily “gambling.”

On top of that, some in Congress have been working hard for a while to clarify that online poker is legal.

Even if you accept the idea that these sites are breaking the law — which is a big open question — is it really okay to simply seize the domains prior to an adversarial hearing? File charges, bring it to court, and have the government ask for an injunction, allowing the site operators to state the basics of their case. Seizing the domains seems like a massive government overreach (yet again).

Of course, the interesting thing to me is that this may get a lot more people interested in the federal government’s new love of seizing domain names prior to any real due process. Perhaps not that many people are all that concerned when the issue was the “boring” question of copyright, but an awful lot of people play online poker, and they are unlikely to appreciate the seizures…

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Companies: absolute poker, full tilt poker, pokerstars

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Comments on “Feds Seize Poker Websites; Founders Indicted”

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94 Comments
umccullough (profile) says:

DNS caching?

It’s interesting – some of my coworkers, upon reading this news, immediately logged into their FullTilt and Pokerstars clients – and found that their money was still in there.

If the client programs are even using the domains to access the sites, they will continue to work as long as DNS caches are intact.

At this point, since I work in a shop full of software developers, they’re probably just gonna add pokerstars.com to their hosts file and continue on their merry way… which is pretty amusing. I guess they’ll be stuck playing with other smart people, maybe online poker will become more challenging 😉

inc says:

Re: DNS caching?

You should setup a hosts file with the IPs and your DNS will continue to function for you.

Windows
Windowssystem32driversetchosts

Mac OS X
/private/etc/hosts

Linux
/etc/hosts

The format of each entry is:
[internet address] [domain name]
127.0.0.1 http://www.domain.com
internet address – a standard IP address, i.e. 127.0.0.1
domain name – A Fully Qualified Domain Name, FQDN, i.e. http://www.domain.com

Anonymous Coward says:

Absolute Poker is the only domain that looks to be seized for me in Australia. Full Tilt and Pokerstars seem to still work. Maybe it is just some latency in the DNS system.

Funny how poker is more transparent than those CDOs and other instruments they let the banks gamble on. Also, I don’t remember poker bringing down the world economy. Obviously someone isn’t paying enough to the right people.

Anonymous Coward says:

“There are questions as to whether or not poker is a game of skill or chance, with at least one court saying that it was the former, and thus not necessarily “gambling.”

To gamble is to wager money in a game of skill or chance. Either way, you are putting up money for something that is not guaranteed. So, poker is gambling. Ask a casino manager or old timey cowboy if he agrees with some no-practical-application-theory-only law professor who feels poker is not gambling based on some pseudo-intellectual argument. I think you already know the answer you’ll receive, and it’s the right one.

“Even if you accept the idea that these sites are breaking the law — which is a big open question — is it really okay to simply seize the domains prior to an adversarial hearing?”

Absolutely not.

Chosen Reject (profile) says:

Re: Re: Re: Re:

It might help. Oh look, here is an article that points out the difference. Before you go shouting down the link just because of the domain name, realize it was written by a professor of psychology and the he gets into the legal definition of gambling (which would be necessary since we are talking about the legality of it here).

It turns out the answer was yes, and now the answer moving towards no. Can you gamble in the game of the stock market? Absolutely. Can you gamble in the game of poker? Absolutely. Are all people playing either of those games gambling? Absolutely not.

Niall (profile) says:

Re: Re: Re: Re:

Ok, we Europeans really don’t understand how you Americans can have a country with guns everywhere, where violence is such an ingrained part of culture, and yet you act (en masse) as if a little gambling is the end of the world and will lead to mass killing of kittens, children and Republican grannies. Is it some massively Calvinist hold-over from the Pilgrim Fathers?

Maybe it’s like with online porn vs sex attacks. Maybe if you could all legitimately (and sanely) gamble (which by the way can be very profitable for the economy and government) there would be less mad gambling with the world economy.

Micheal Whitetail says:

Re: Re: Re:2 Re:

There is no outcry agaisnt the supposedly morally bankrupt and ultimate evils of online gambling… at least amoung the majority of the American public.

It is, quite simply, the entrenched gambling industry attempting to legistlate the competition out of business instead of competing/innovating with them.

Anonymous Coward says:

Re: Re: Re:2 Re:

Gambling is legal in America, in places like Las Vegas and elsewhere. We do have a lottery.

While I’m generally against gambling, one must realize the true purpose of disallowing anyone to open up a gambling arena. The purpose is for the government to grant government sanctioned arenas monopoly power over the market. The same thing applies to liquor/alcohol licenses. While I generally don’t think people should drink (though some alcoholic drinks might actually be good for you in moderation and that might be OK), the government of many states grants liquor licenses and those things are expensive as heck. They artificially limit how many people can open up bars and whatnot. Why? Because it effectively gives very specific interests far less competition to compete with. and while I agree the effects maybe good in this case (ie: reducing gambling and drinking), which I actually do think is a good thing, I think the true motives are nefarious. The true motives are the same motives behind why the government grants taxi cab monopolies and all the other many monopolies that the government grants.

btr1701 (profile) says:

Re: Re: Re:2 Re:

> you Americans act (en masse) as if a little gambling is the end
> of the world and will lead to mass killing of kittens

No, we Americans don’t act that way at all. The big casinos are acting like that, and buying off congressmen to make anything that threatens their cash flow illegal.

The average American couldn’t give a tin shit about online poker. But the Las Vegas and Atlantic City Casino Associations do. And since they have the money to buy votes, the average American gets yet another freedom taken away from them in the name of protecting a legacy business model threatened by the internet.

It’s just another flavor of the MPAA/RIAA lunacy.

Chris in Utah (profile) says:

Re: Re: Re:3 Re:

I marked this as insightful even though on hindsight it’s full of holes and I will tell you why.

If they really wanted to protect there legacy model they needed to stop them from buying brick and mortar event seats to resell in the form of a tournament seat. And furthermore satellites for that seat. Now if you say is true and there attempting to protect a legacy business model then the logical conclusion they needed to do this back in the 90’s.

Did they? NO. They adapted. 10,000 players laying 10k down for a shot at glory; enough said.

So how does this exactly put holes in your theory? Oh yeah, they adapted before and its Uncle Sam with that finger of his giving us a prophylactic while we are under anesthesia because I’m dam sure if anybody was awake to the issues there sure as hell is a fallout.

I’ll say this again for those in the nose bleed section. Learn the trickle effect. Turn on the faucet of oppression and there’s and obvious reaction. Drip the shit and people build a bigger/better bucket.

BigBroccoli says:

Re: Re: Re: Re:

I would appreciate it, as I don’t think there is much of a difference. It has always terrified me that the backbone of our economy is simply betting whether or not stocks will go up or down. More and more too, this isn’t based on a companies actual production but just sentiment. Please elucidate the difference.

btr1701 (profile) says:

Re: Re: Re: Re:

> Is it really worth my time to point out the difference between
> an American pastime game (poker) and the backbone of an
> economy (stock market)?

You needn’t point that out at all. The difference is obvious. When people fuck around gambling on the stock market, entire nations can collapse. When people fuck around gambling with poker, nothing happens.

Which is more harmful?

Ron Rezendes (profile) says:

Re: Re:

Poker, chess, pinball – all have been proven in US Courts to NOT be games of chance, thereby allowing wagering between players so long as there is no cut of the pot involved (i.e. the house can’t take a % or fixed amount from the pot).

I play professional tournaments for money in all three and have some first hand knowledge of how and why this is allowed.

The crux in poker is that players can win even if they don’t hold the best hand, bluffing is a skill and can be done regardless of the cards you are dealt allowing you to still win through the use of skill.

Roger Sharpe proved pinball was also a game of skill to the NY City Council and single handedly helped overturn the ban on pinball in several states.

The San Diego Chess Club, of which I have been president of for 15+ years now, has had the local authorities visit because someone wasn’t comfortable with players playing chess for money (anywhere from a quarter a game to five bucks a game playing blitz chess – 5 minutes on the clock for each player). When the police showed up they asked a couple of questions, essentially was all the money strictly between the players involved, and when told that it was they informed the complainant that there was nothing illegal going on even though it was in a city park (Balboa Park).

nasch (profile) says:

Re: Re: Re:

Poker, chess, pinball – all have been proven in US Courts to NOT be games of chance, thereby allowing wagering between players so long as there is no cut of the pot involved (i.e. the house can’t take a % or fixed amount from the pot).

Except if “the house” is a casino that’s paid some kind of license fee to the government (or exists outside the US’s jurisdiction)? Because casinos take a cut of each pot, right?

Anonymous Coward says:

It’s not about if it’s legal or not. They are accused of fraud and money laundering.

Again, Mike spins this his way. Read the article, seriously.

And if they wouldn’t have shut the sites down, MORE people would have lost MORE money.

But you’re right, since no one knows if it’s legal or not, let’s allow them to keep stealing our money. It’s a great plan Mike.

Anonymous Coward says:

Re: Re: Re:

No, it’s only a story here because Mike hasn’t read the article, again. Indictment means there were official accusation against them. Mike, again, in only a way that Mike does, put a spin on the story, to, again, make them look like bad guys. This was completely legal, called for, and according to procedure.

And all of the above is according to US laws. I’m aware the WTO deemed the bans illegal, but that doesn’t make actually make it illegal in the US. Read up on it. Hence, all this was legal.

If they didn’t supposedly fraud, there wouldn’t have had a seizure, therefore there wouldn’t have been a story. But that’s not how TD/Mike operate.

Josef Anvil (profile) says:

Re: Spin spin spin

Yes there are accusations of fraud and money laundering. And yes those are illegal activities.

You have to ask yourself why they resorted to fraud and money laundering. They were working around the system. The issue of whether or not poker is gambling forced them to work around a law that banned online gambling.

The real question to be asked is why we put up with a Congress that hides an online gambling ban in a bill that is designed to protect our harbors and ports. Yell “the TERRORISTS are coming!!” and you have a bill to protect ports that is not going to have much opposition, then add in whatever legislation may have had some opposition and job done.

So yes, they did commit crimes, because the TERRORISTS could use online gambling to get us.

Anonymous Coward says:

“It’s not about if it’s legal or not. They are accused of fraud and money laundering.

Again, Mike spins this his way. Read the article, seriously.

And if they wouldn’t have shut the sites down, MORE people would have lost MORE money.

But you’re right, since no one knows if it’s legal or not, let’s allow them to keep stealing our money. It’s a great plan Mike.”

Yeah, it does look like they are probably guilty of laundering, but who do you think was stealing and who were they stealing from? They did what they could come up with to get the players money to them. Unfortunately they weren’t able to find a legal way to do that, but there was no theft involved.

G Thompson (profile) says:

Re: Re:

Yes of course they are accused of it, though they have NOT been convicted of it.

Oh and It forgets to mention that Pokerstars.com is fully owned, serviced, and operated out of the Isle of Man.
ie: IT IS NOT IN ANY WAY SHAPE OR FORM A USA COMPANY so the USA has absolutely no jurisdiction at all.

Also good luck prosecuting an entity on the IOM. No, nada, nyet extradition ability with them. Well maybe rendition which I would not put past the USG at this time.

Maybe they should try coming after some of the Australian Poker sites too.. Though be prepared for the USG Agents who do to spend a lot of time in federal gaol.

nasch (profile) says:

Re: Re: Re:

Also good luck prosecuting an entity on the IOM. No, nada, nyet extradition ability with them.

I believe you’re mistaken about that.

“The Treaty on Extradition between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland…. shall apply in relation to the United Kingdom: to Great Britain and Northern Ireland, the Channel Islands, the Isle of Man…”

http://www.expatintelligence.com/extradition-treaty-isle-of-man.shtml

Anonymous Coward says:

More whack-a-mole that compromises the integrity of .com & .net

Their websites are hosted offshore and are still running. The FBI seems to have only seized their Verisign managed domain names. DNS caching will prevent some people from seeing the seizure notice immediately. You can read the seizure notice here:

http://50.17.223.71/

Watch this space to see a list of all of the domain names they’ve seized:

http://www.dailychanges.com/cirfu.net/#tab=in

Wulfman (profile) says:

Lottery

Gambling is only illegal if the governments cant find an easy way to tax the shit out of it. Lottery’s were illegal until the government decided they were a great way to make money.
They allow Indian casinos to have poker and slots and tax them. It all boils down to TAXES. Which the government does so poorly to spend so they want more and More and MORE.

Trerro says:

Stocks vs Poker

The stock market is a game of betting skill. You bet on your business analysis and mathematical skill, hoping your knowledge will allow you to make a winning investment before the other players beat you to the purchase, and hoping unexpected bad luck doesn’t screw over your investment. You decide when to call, raise, or fold your bet as you see the business progress from day to day.

Poker is a game of betting skill. You bet on your personal analysis and mathematical skill, hoping your knowledge will allow you to make winning investments in hands, trying to beat your opponents to the pot, and hoping unexpected bad luck doesn’t screw your investment over. You decide when to call, raise, or fold your investment in a given hand as it progresses from play to play.

Can someone explain to me how these are at ALL different, other than than the fact that game of stocks has far more simultaneous players and the game is played over a longer time scale?

Oh right, one has a powerful lobby behind it, the other doesn’t.

Bruce Hayden says:

Re: Stocks vs Poker

For your information, betting on the stock market is no longer a skill. Insider trading goes on EVERY day by the same people who crashed our economy. Martha Stewart was made an example of only because it was so rampant and they had to prosecute somebody to take some heat off the bigger players.
Your comparison between the stock market and poker is sadly lacking in substance. Poker is fair and truly a game of skill.

Chris in Utah (profile) says:

Well

I was wondering if this was going to happen since they started talking about mooo & craigs when they were still start-ups and the supposed online gambling restrictions.

I am to make a happy living playing online poker and the one I play at updated and poof still online. Makes one wonder if the trickle effect comes into play here.

Turn on the faucet of oppressive actions and ya get an obvious reaction. Ya drip water in the bucket and people build a bigger bucket.

Can you imagine if they locked the accounts? Capture of Trillions of legal (as the definition stands) assets. I’m pretty sure the entirety of The Mouth’s Rage will be the least of there issues.

Marcus says:

How can this be justified, when almost every state has some sort of lottery system. Our government is greedey as hell and thinks that they deserve a cut of any and all revenue. The only reason why these state lotteries are accepted is because the government can tax it. If gambling is considered illegal then remove all of the different gambling channels out there. Not just the ones that you can’t tax, bottom line is if online poker was taxed it would be more than okay. what a shame.

mnight says:

thank god, I hate thinking for myself

Thank god online poker has finally been “dealt” with by the nanny state. I’m so thankful that the powers of “they” are able to determine what is good for me. Lord forbid that I think for myself. Poker is evil, and online poker even moreso.

By the way, what’s that powerball up to now? Think i’ll pick up some tickets on my way to the bingo hall right after I hit the horse track and place some wagers…

Niall (profile) says:

Re: online poker

The only ‘fact’ is that you buy into every idiot right-wing talking head’s vituperative spiel and ridiculous tea-bagger rants.

Your government wouldn’t know socialism if it voted in every so-called left-wing politican in the country. Obama is no more power-hungry than any other politician, and seems a lot better than the Cheneys, Rumsfelds, etc. that graced the last administration. Last I heard, Hawaii counted as part of the US, or are you going to explain how every other Hawaiian person also isn’t American? I have yet to see a Muslim alive who would swear on the Bible rather than the Koran, and who would attend a Christian church. I have also yet to see Muslims ‘take over’ any Western (and historically Christian) country.

So… you were spouting?

Glen Pearson (user link) says:

land of the free?

Poker is not gambling.If poker is gambling then so is online stock trading or trading in general.Why do the same people keep ending up at final tables,time and time again?What are they the luckiest people in the world?NO!In the game of poker you measure the equity involved in any given situation based on all of the available information you have at your disposal and act accordingly.Just as investments in the stock market do not always yield the returns expected or not at all in many cases, poker to has this trait.Now, you may say, what about the people who do not know how to play and are blowing their money gambling.Well to you I say, ANYONE who invest in anything in life without calculating the risk to reward ratio properly and accounting for all the variables at their disposal is GAMBLING.In that sense poker is gambling and so is everything else you do.What about children who dream of becoming pro football players?Should we tell them that they are not aloud to gamble with their physical well being or for that matter what about the cost of playing football that is spent and more times then not wasted because of an injury down the line or lack of discipline and fading interest.Adults should be able to measure risk by themselves and they do not need the help of the government.Now if you are talking about slot machines then yes I agree get rid of them as they are BUILT to make the player lose or how about state lotteries?Poker is a game of 100% skill.If you invest in the correct situation you WILL make money playing against weaker opponents.This is no different than any other sport!I did not see any of you stepping in to save Buster Douglas from Mike Tyson when the odds were 50 to 1.NO!You didn’t because you believed it was the mans right to wager his body against the will of another man.I hope this has opened the eyes of some.Thank you for taking the time to read this, regardless of what your opinion is.Remember it is your duty to protect the freedoms of others as one day your number may be called and will I be there to stand for you if you will not for me?

Anonymous Coward says:

Goodbye America

I am not an American, but play on Pokerstars. So to the faceless goons of the American government, how do I get my money back?

I’m quite happy America will soon be relegated to ‘has been’ status – the fact that you are the biggest debtor nation in the world and is now only a world power because of its military – goodbye America – your government has turned you into a big pile of shit.

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