The Changing Face of Online Poker in the US

Last Friday, April 15th, will go down in history as one of the worst days in online poker after US authorities announced that they would be charging eleven men – among them founders of three of the biggest sites in the industry – with fraud, bribery and money laundering. The Feds seized the domain names of Poker Stars, Full Tilt Poker and Absolute Poker in the United States and froze their bank accounts. Men such as Isai Scheinbeg, the 64 year old founder of Poker Stars, could face up to 30 years in prison if found guilty.

The couple of days following this dramatic announcement were very reminiscent of the days that followed the introduction of the Unlawful Internet Gambling Act in 2006. Nobody knew where the bomb dropped from. US poker players scrambled to try and withdraw their funds, only to be met with a statement on the websites that the domains had been seized and reminding them that gambling was “illegal”.  Poker Stars put out a press release, calling for calm among its members and reassuring them that their funds were safe and in a separate bank account.  However, the bottom line was that many players reported that they were unable to withdraw their funds – leading to even more panic.

Within a few hours of the announcement about the indictments, the after shocks were already being felt in the industry.  Wynn Resorts, which only a few weeks ago announced the signing of a strategic alliance with Poker Stars, publicly terminated that agreement, thereby distancing itself from Poker Stars in the hope that the bad luck following this site would not rub off on the Nevada based business.

European gambling operators scrambled to beat their rivals in a bid to see who could start attracting homeless US poker players first. The aim was – and is – to attract the ‘whales’ – those players who have huge bankrolls and who have traditionally played at Poker Stars and Full Tilt due to the competition among players with similar sized bankrolls and massive guaranteed tournaments.  Analysts agree across the board that the turn of events in the US are a blessing in disguise for European operators – in the short term at least.

Watch this space for more details as they unfold.