Online Poker Site Co-Founder Enters Guilty Plea

Online Poker Site Co-Founder Enters Guilty Plea
February 6, 2012

A cofounder of the Absolute Poker website entered a guilty plea to federal criminal charges in December. The online gambling site was one of three subjected to an April 2011 online-gambling crackdown by U.S. law enforcement officials. Jim Lakely, co-director of the Center on the Digital Economy at The Heartland Institute, which publishes InfoTech & Telecom News, says the arrests are the result of poorly written laws pertaining to online gambling.

Absolute Poker cofounder Brent Beckley and founders of PokerStars and Full Tilt Poker were charged in April with breaking an array of U.S. laws, including money laundering and illegal- gambling offenses. Those three Web sites were the largest poker sites operating in the United States at the time. Eleven people were charged in total.

Passed by Congress in October 2006, the Unlawful Internet Gambling Enforcement Act made it a crime for banks and other companies to knowingly accept electronic payments in connection with Internet gambling, which stripped such sites’ abilities to make payments to their customers. 

‘Leave No Confusion’
“The absurd Unlawful Internet Gambling Enforcement Act doesn't actually outlaw the act of playing poker online for money in the United States,” said Lakely. “It only made it illegal for a player's winnings to be processed in U.S. banks. So it's no surprise American entrepreneurs were going to try to skirt that loophole in the law.”

Lakely says while he’s opposed to the law in principle,  the law as written isn’t restrictive enough to provide clarity. “I'm no attorney or legal scholar, but if Congress wants to ban online gambling, shouldn't it just ban it? Leave no confusion, and let the Supreme Court determine if the ban exceeds Congressional authority. If that's the case, online gambling is legal. If not, shuffle up and deal,” he said.

“Instead, Congress decided to pass a statute which is the equivalent of telling Americans they can buy all the cupcakes they want, but if they eat them, the bakery will be shut down and the government will be coming for those cupcakes,” he added.

Lakely noted government doesn’t oppose the idea of adults entertaining themselves by playing poker; it just wants to make sure it gets a cut of the action, he says. “Technology now allows Americans to play poker without going to government-approved casinos. The only difference between legal and illegal poker is one's physical location, which the modern digital economy renders moot,” he said.

“Americans have many gambling options open to them,” Lakely said. “The state-run lotteries are but one, which makes the government crackdown on Internet poker hypocritical and, frankly, absurd. Government runs the biggest sucker casino of them all. At least a poker player can increase his chances of winning through skill and nerve. A lottery is pure luck, and with the worst odds imaginable.”

Alyssa Carducci (ad.carducci@gmail.com) writes from Tampa, Florida.