Four thoughts on Black Friday

One thing that has struck me since the federal indictments””and related DOJ actions””were made public in April is the volume of excellent analysis that’s out there. There is a remarkable amount of high-quality, free commentary that has been published in a variety of media, from the motivation and timing of the indictments to the impacts on egaming licensing bodies to the fallout for players and for land-based tournaments.

Here are some reflections on a few issues surrounding this case:

1.I continue to think that it’s too early to get much of a sense about how the criminal indictments will play out for the named defendants. Not much is known about what the key expectations of federal prosecutors will be, although public statements by the USAO suggest that paying back players will be important, among other things. Will the case against all defendants be delayed pending the extradition or surrender of the seven remaining defendants that are outside of the US? Will there be any sudden appearances by further defendants on US soil similar to what apparently happened to Ira Rubin in late April? Will the case keep moving forward with the aid of further co-operators, much in the way that it seems to have come forward to date? All of these are things are very much up in the air.

2.Much has been made about the exposure of currently US-facing poker (and other gaming and betting) operators; to the extent that they’re engaged in the same sorts of things alleged in the superseding indictment, their principals and businesses are running the same risk as certain of the named defendants. (The bank fraud charges are especially serious.) However, no-one should forget that there are still Illegal Gambling Business Act and UIGEA counts in play. Both statutes require a predicate state crime, and the law across the various states is varied and can be unclear, but sites taking US wagers continue to risk becoming federal targets based upon these and other statutes irrespective of, for example, the bank fraud counts.

3.The indictments have been said to vindicate the approach of those operators who left the US market upon the enactment of the UIGEA (although note they were in the US when the Illegal Gambling Business Act was in force). The charges may have a salutary effect to the extent that they continue to compel the industry to concentrate on new markets. However, we shouldn’t lose sight of the parallel gains being made by those operators that continue to do business in the US. It’s trite to say, but prohibition’s not working.

4.The impact on players is one area that has received a great deal of attention from many communities, and rightly so. Pokerstars’s erstwhile US players appear to be receiving refunds. In addition to directly impacting the criminal case, the faith of current players””and future ones””will doubtless be affected by how and when players get paid out by all of the parties involved.

Stuart Hoegner is a gaming attorney, accountant, and member of the International Masters of Gaming Law. He is based in Toronto, Canada. Follow him on Twitter @GamingCounsel.