Gamblers held up by feds

Justin Barney wants his $600 back, but it’s disappeared down a cyberhole.

He’s a long-time online poker player who keeps an account on one of the web’s largest poker sites, FullTilt.com. Recently he turned on his computer to play a little Texas Hold ’em, only to find that the FBI and the U.S. Department of Justice had shut down the site, leaving his money in limbo. He was, shall we say, taken aback.

“I was both angered and surprised, because I didn’t think the government had the power to shut the site down,” Barney said this week during in an interview at Angie’s Poker Club on Park Avenue in Chico.

In place of Full Tilt’s regular home page, Barney was greeted by the official seals of the FBI and DOJ along with a message saying, “This site has been seized by the Federal Bureau of Investigation …” and that the site was working to restore players’ funds. A similar fate befell the other two poker giants, Absolute Poker and Poker Stars, sending millions of U.S. online-poker enthusiasts, including many here in Chico, into a tizzy.

The seizure took place on Friday, April 15, on what has become known by online poker players as “Black Friday.” The government shut down of the three biggest U.S. poker websites, along with two affiliated sites.

The crackdown goes back to a federal law passed in 2006 called the Unlawful Internet Gambling Enforcement Act, which prohibits the handling of transactions for online gambling. Without access to U.S. banks and clients, the sites moved their operations offshore. The recent federal indictments accuse the companies’ executives of “tricking” banks into processing their transactions. In all, 11 people, including the founders of the three previously mentioned sites, were indicted by the U.S. Attorney’s Office for the Southern District of New York on charges of bank fraud, wire fraud and money laundering.

The federal government has long held that online gambling is illegal, at first citing the Federal Wire Act, which prohibits the transfer of funds over state or international lines for the purpose of making bets. But there has been much debate over what types of betting fall under that law—and some argue that skill-related games like poker do not apply. The 2006 law aimed to put an end to online gambling by cutting off the middlemen—banks—but this is the first action taken against betting sites.

Poker companies and players such as Angie’s regular Brian Beitman have long maintained that poker is not gambling, since it is based largely on strategy and the ability to “read” opponents. “The biggest gambling game in the world is the lottery, and it also has the worst odds,” he said.

The shutdown has caused Chico web gamblers to flock to other venues, such as Angie’s. One of the club’s managers, Joe Rankin, acknowledged the crackdown has been good for business; he’s seen four or five new players daily since it happened.

“The first thing out of their mouths is how much of their money they can’t get back,” Rankin said. “Lots of them used online gambling as their livelihood and want to talk about the crackdown.”

Beitman didn’t rely on online gaming to live, but his winnings did buoy his income.

“I do it for extra money three or four days a week,” he said. “It puts clothes on my back and shoes on my feet.”

He considers himself lucky to have only $100 frozen, and he has since resumed playing poker on an unaffected site.

A press release from the DOJ claims the agency has not frozen players’ funds or prevented the sites from issuing refunds. It further states that the agency is working with those sites to facilitate refunds and has allowed Poker Stars and Full Tilt Poker to resume gaming, but not with real funds. The third site, Absolute Poker, was not functioning as of press time.

Even gambling with “play money” has its value, said Dave Nagel, who also plays at Angie’s. He played online this way for two years. “It was a vital introduction to live gambling for me, since lots of play-money gamers are very serious, too,” he said.

He thinks the government should not infringe on his right to gamble privately. Instead, he believes online gambling should be taxed to increase government revenues.

Like numerous Chico online players interviewed, Barney concurs. Then again, he also admitted that players like him had been participating in a realm that operated within a gray area, legally.

“Most of us knew this might be coming, because the 2006 law seemed to make it illegal,” he said.