UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

June 16, 2009

FEDS FAIL TO REGULATE HEDGE FUND GAMBLING BUT ZAPS ONLINE POKER PLAYERS

Poker News Today - Late last week, the federal government ordered five banks to freeze a total of $30 million in payments owed to the 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. . .

According to the alliance, 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 that process funds for the poker sites. Some affected players who gamble at the popular sites FullTiltPoker.com and PokerStars.com first realized they could not access funds in their accounts over the weekend when checks issued from the companies bounced.

Online poker, a $9 billion to $12 billion a year industry, is legally a gray area, experts say. Washington is the only state with a law on its books 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 the sites'. The fact is, there is no federal law against playing online poker," he said. Though the government maintains that online gambling is illegal, the U.S. attorney's office in New York would not comment on the case or confirm an investigation was under way. . .

Both FullTiltPoker.com and PokerStars.com have reimbursed players who tried to cash out and were unable to.

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