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Southern District of New York action against online poker players


The Southern District of New York (SDNY) Action Against Online Poker Players was a legal action taken by the Department of Justice in an effort to crack down on online poker. The action occurred around June 8, 2009, when the government ordered four banks to freeze over 34 million dollars in payments owed to about 27,000 poker players. According to the Poker Players Alliance, a grass-roots organization for poker players, federal prosecutors ordered Citibank, Wells Fargo and Goldwater Bank and Alliance Bank of Arizona to freeze the accounts of Allied Systems and Account Services. Allied Systems and Account Services are two of the account-management companies that Full Tilt Poker, Absolute Poker, Ultimate Bet and PokerStars use for the disbursement of funds.

The legality of online poker in the United States is uncertain. In 2006, the Security and Accountability For Every Port Act was passed in an effort to combat terrorism at United States' harbors. One of the provisions included in the act is known as the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). This provision prohibits the transfer of funds from a financial institution to an Internet gambling site, with the notable exceptions of fantasy sports, online lotteries, and horse/harness racing. The law makes exceptions for games of skill as opposed to games of luck; thus, opponents of the measure argue, it should not apply to poker. Numerous studies have shown that poker is, in fact, a game of skill. The very existence of thousands of players who were consistent winners proves that.

The law, opponents argue, does not address transfer of money to individuals nor does it make online gambling illegal. The only state that has a law explicitly banning online poker is Washington. The federal government holds that playing online is a violation of the Act. Arlo Devlin-Brown, the assistant U.S. attorney for the SDNY, says that the U.S. government can seize the funds "because they constitute property involved in money laundering transactions and illegal gambling offenses." In seizing the money, the federal government did not cite the UIGEA but rather the 1961 law "The Wire Act and Illegal Gambling Business Act." According to the Competitive Enterprise Institute, a think tank "dedicated to free enterprise and limited government", the Justice Department has taken the stance that online wagering is prohibited by the Act, "despite the fact that the courts have repeatedly smacked down any attempt to apply the federal Wire Act ... to non-sport related Internet gambling."


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