Poker News Daily

PPA Director Reacts to U.S. Government Seizing Online Poker Funds

The month of June has been a roller coaster ride for the Poker Players Alliance (PPA), the poker industry’s primary lobbying group in the United States. Last week featured a seizure of over $30 million in online poker payment processor funds by the U.S. Attorney’s Office in the Southern District of New York.

The move marked one of the first shots fired at the online poker world, as past enforcement has focused squarely on sports betting. PPA Executive Director John Pappas told Poker News Daily, “We were confused by it and also believe the Government is on shaky legal ground in terms of being able to justify doing this under any act that has to do with gambling.” According to the PPA, the Southern District claimed that the Wire Act of 1961 and Illegal Gambling Business Act were both violated. Now, over $30 million and at least 24,000 online poker players are affected.

The PPA told the Wall Street Journal that 10 million Americans play poker on the internet and wager $6 billion annually. Although no formal legal action has been filed, Pappas questioned whether the Federal Government’s Wire Act charge would hold up in court: “The highest court to rule has concluded that the Wire Act applies to internet sports betting. Not to mention, in the state of New York, statutes say it’s not unlawful for players to place a wager. There are a lot of hurdles they have to face.”

Assistant U.S. Attorney for the Southern District Arlo Devlin-Brown has emerged as the driving force behind the seizures. The PPA sent a letter to Devlin-Brown questioning whether due process was violated in the seizure of funds from Citibank, Goldwater Bank, Alliance Bank of Arizona, and Wells Fargo. In addition, poker players have been speaking up in droves, firing off letters and e-mails to their Congressmen from the PPA’s website. Pappas revealed several key talking points: “Please cite the authority and precedent for the Southern District of New York to go after poker players’ winnings. Please cite the authority and precedent that playing poker on the internet is an unlawful activity. The appropriate response to all of this is to make policy to license and regulate the industry, not force poker players to be criminals and have their money seized.”

Jeff Ifrah, attorney for the payment processors affected, speculated to Poker News Daily that the seizure may have been timed to coincide with the running of the 2009 World Series of Poker (WSOP), which began back on May 27th. In response to the adversity, online poker sites such as Full Tilt Poker and PokerStars have fully reimbursed players and in some cases offered a 10% bonus for the inconvenience of a bounced check. Many poker players have recently reported that their checks and echecks are once again clearing without setback. On the online poker sites compensating customers, Pappas lauded, “It bolsters our argument that we’re not dealing with a rogue industry that is cheating people out of their money. It’s an industry that cares about its customers.”

In the meantime, the PPA and attorneys for payment processors are engaged in dialogue with the Southern District. On the possibility of a lawsuit or court order, Pappas told Poker News Daily, “It’s not a situation where poker players are out of money. Should there be further seizure attempts going forward, then perhaps we’d be forced to jump into it with a legal injunction, but the facts of it right now leave us to believe that we can come to some sort of immediate solution through dialogue.”

Congressman Barney Frank (D-MA) has introduced the Internet Gambling Regulation, Consumer Protection, and Enforcement Act to establish a complete licensing and regulatory framework for the industry in the United States. The measure was unveiled to the world on May 6th and has since attracted 30 co-sponsors, including four new additions on Friday.

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