Government Intervention Yet Again: Online Poker Player Funds Frozen

Online gambling sites have been under fire in the last few years.  It has even gotten to the point to where 11 states have declared it illegal to gamble on these sites if you reside in one of those states.  The laws made it so that banks could not allow you to wire your funds out of your account for betting.  Now, it seems, the government is taking even more control.

On June 4th the government decided to freeze a total of $19 million dollars in the banks located in Scottsdale, Arizona and Los Angeles, California.  This money belonged to online poker players.  A warrant was issued in San Francisco at a Wells Fargo branch, and a prosecutor ordered an Arizona bank to immediately freeze the funds of an account holder.  In both situations, the banks obliged.   Since that time, 24,000 online poker players have been victimized by the government, with a total of over $30 million in frozen funds.

Representatives from the federal prosecutor’s office have been questioned and the Associated Press reported that the reason given for the federal seizures was that the people involved were either involved in illegal gambling or that there was evidence that money laundering activities were taking place.  The problem is that the funds that have been frozen belong to individual people that have not committed any crimes.  The general consensus is that if the government is suspecting online gambling websites of these illegal activities, their funds should be frozen and they should be punished – not the taxpayers who are doing nothing wrong.

The Poker Players Alliance (PPA) is a major lobbying group for the United States.  Their main purpose is to ensure that online poker playing citizen’s are not being victimized for acting within the confines of the law.  In an interview with Poker News Daily, a spokesperson from the PPA stated that the US government is claiming violations of the Wire Act of 1961 and the Illegal Gambling Business Act.

One of the biggest issues is that these actions from the federal prosecutor’s office in the Southern District of New York had no legal right to claim the allegations that were made, nor freeze the $30 million.  According to the PPA, the charges may not hold up in a federal court, if the formal charges are ever made, because the Wire Act was designed to deal with online sports betting.  Additionally, there are no laws in the State of New York against betting, let alone online poker betting.

An attorney for one of the payment processors for online gambling sites believes that these actions are in some way related to the World Series of Poker tournaments that started in late May.  It seems like a huge coincidence to many members of the online poker world, who are seriously reacting to this violation.  In any event, most of the online poker websites and their payment processors have reimbursed players who received bounced checks, and some are including bonus amounts to help repair the damage that has been caused.  As for the actions of the government, it seems that it is not happy with the levels of control that it has recently acquired of major companies like General Motors, so it appears to many people that this is just another way to make us all follow the same straight line.