One was the immediate reaction I had felt upon learning that a federal grand jury in Maryland had returned indictments against two gambling businesses (ThrillX Systems and K23 Group Financial Services) and three individuals charging them with illegal gambling and money laundering. The indictments, dated April 26, 2011, were unsealed yesterday, and also involved the seizure of 10 different domains, including at least a couple (TruePoker.com and DoylesRoom.com) that hosted online poker.
Was hard not to feel “blue” -- i.e., sad, even a little down -- about the news, especially when considered as an indicator of what appears to be an increasingly dim future for online poker here in the U.S.
Additionally, for some of us, “Blue Monday” also evokes that early ’80s synth pop hit by New Order, the one that begins with the self-pitying line “How does it feel to treat me like you do?” Again, as an American online poker player, it was hard not to respond in a similar vein -- like we’re getting treated badly here. And perhaps to think how we’re looking at the aggressive establishment of “new order” for our game.
My mood became a little less “blue,” however, as I learned more about yesterday’s indictments.
A press release appeared yesterday afternoon explaining the charges as well as the “impressive undercover work” performed by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) that led to the indictments.
Agents set up a fake payment processor, called Linwood Payment Solutions, in order to learn more about how the businesses operated. A Maryland resident was then given $500 to set up an account (on BetEd.com), won some cabbage and used the fake processor to move winnings back to gambler’s bank account. That was back in November 2009. Subsequently, the fake processor went on to facilitate over 300,000 transactions for the two targeted businesses and involving the 10 sites, moving more than $33 million back and forth all over the globe.
In other words, there appear to be some significant differences here from what happened on April 15th when the founders of PokerStars, Full Tilt Poker, and Absolute Poker/UB were charged along with those other folks involved with payment processing.
For one, yesterday’s indictments only refer to money being moved around to faciltate sports betting -- not poker. Or any other forms of gambling, for that matter.
With regard to TruePoker.com and DoylesRoom.com, the domains were seized, but the founders/operators of those sites were not targeted. I believe this resulted from the fact that Bookmaker.com -- a hugely popular sportsbook and one of the other 10 seized domains named in the indictment -- was part of the Yatahay network, a network to which both poker sites belonged, too. DoylesRoom moved there (from Cake) in late January. And speaking of recent moves, Doyle himself announced he was stepping away from DoylesRoom just last week, a move some are thinking might’ve been more than just another example of good timing by the “Godfather of Poker.”
In other words, for those of us in America who are variously invested in online poker (emotionally, financially, etc.), I don’t think yesterday’s indictments are necessarily to be regarded as a specific blow against online poker. Unless, I suppose, you were one of the few for whom TruePoker or DoylesRoom was a site of preference.
Still, yesterday gave us plenty to be concerned about.
The involvement of various governmental agencies here -- including ICE-HSI and the Internal Revenue Service -- suggests all forms of online gambling, including poker, are receiving a lot of scrutiny at present. As does a more-than-two-year-long sting operation set up to nab these two businesses.
Also of note from yesterday was the news that one of those named in the “Black Friday” indictments -- Bradley Franzen -- pleaded guilty in a New York court hearing to conspiracy to commit bank fraud, to accepting funds in connection with unlawful Internet gambling and conspiracy to commit money laundering. Unsurprisingly, the plea is reportedly part of a deal to try to lessen Franzen’s punishment in exchange for his providing “substantial assistance” to prosecutors in their continuing efforts to take down the other individuals and sites targeted in the April 15 indictments.
All of which suggests things are especially tenuous at the moment, both for those few online poker sites still serving American customers -- all of whom (one has to think) must be at least contemplating leaving the U.S. market, if not worrying about becoming the next to be targeted by the feds -- as well as for the so-called Big Three, two of which (PokerStars and Full Tilt Poker) still remain the largest in the world.
So I think I’ll stick with “Blue Monday” as a shorthand way to refer to what happened on May 23rd. I mean, perhaps we aren’t necessarily feeling “blue,” but it does seem like we’re getting knocked around pretty good. As Poker Scout wittily put it yesterday, “Only makes sense to pair black and blue in this context.”
(That image up top comes from an exhibit at the Amherst Museum in New York collecting various laundry-related artifacts, titled “Blue Monday: Washday and Women.”)