The Wheels of Justice Move Slow But True
April 2, 2020
In 2006, the United States Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA). While this new law did not technically forbid online gambling, it had the effect of doing so by making it illegal for online gambling operators to accept any kind of wire transaction to receive funds from gamblers. By definition, wired funds meant bank wire transfers, third party wires (Western Union) and debit/credit cards.
The new law became the focus of one of the most famous days in online poker history. The day was April 15, 2011, a day deemed "Black Friday" after the owners and managers of three major online poker websites (PokerStars, Full Tilt Poker, and Absolute Poker) were indicted on charges of providing illegal gambling activities. The activities in question were activities that included taking wire transactions to settle customer accounts.
In all, there were 11 individuals cited in the indictment. While 10 of the cases had been resolved over the last nine years, there was one that remained open.
After the indictments came down, the founder of the PokerStars site, Isai Scheinberg fled the US in an attempt to avoid prosecution. For the better part of eight years, he was able to do just that. Meanwhile, all three poker sites were temporarily restricted to noncash games which effectively shut them down.
In June of 2019, Scheinberg agreed to not fight extradition and surrendered to US authorities after being arrested in Switzerland. Upon arriving in the US, he hired an attorney and decided to plead guilty to a single charge of operating an illegal online gambling business. While he awaits sentencing, he could get up to a maximum prison sentence of 5 years in a federal prison. The arrest and conviction of Scheinberg finally brings the Black Friday saga to an end.
In a recent interview, Geoffrey Berman, the US Attorney for the Southern District of New York had this to offer to reporters: “Ten years ago, this Office charged 11 defendants who operated, or provided fraudulent payment processing services to, three of the largest online poker companies then operating in the United States – PokerStars, Full Tilt Poker, and Absolute Poker – with operating illegal gambling businesses and other crimes.”
He later added: “As Isai Scheinberg’s guilty plea today shows, the passage of time will not undermine this Office’s commitment to holding accountable individuals who violate U.S. law.”
As of today, only PokerStars and Full Tilt Poker are still offering online poker services.