It was a second round of indictments for online gaming sites from a separate arm of the Justice Department. While some of the top remaining online poker sites were included, this time the indictments also focused on online sports betting operations as well. 

The United States Attorney for the District of Maryland in Baltimore sized 10 websites and were seeking the forfeiture of 11 bank accounts. The websites are owned by two companies and three individuals who were indicted in the documents.

The charges included money laundering and operating an illegal gambling business. It was unclear whether the gambling charge was limited to the sports betting operations or if it included the poker rooms as well.

On Black Friday, April 15, the New York office of the Justice Department shut down the nation’s three most popular poker rooms, PokerStars, Full Tilt and Absolute. The owners were charged with bank fraud and money laundering, but no gambling charges.

In last week’s indictments, U.S. attorneys cited ThrillX Systems Ltd and BMX Entertainment and owners, Darren Wright and David Parchomchuck of Canada and Ann Marie Puig of Costa Rica of violating federal law as well as Maryland criminal codes. They were also accused of developing software and payment processing procedures for online sports-betting services that accept U.S. bets.

“It is illegal for internet gambling enterprises to do business in Maryland, regardless of where the website operator is located,” said U.S. attorney Rod J. Rosenstein in a press release. “We cannot allow foreign website operators to flout the law simply because their headquarters are based outside the country.”

The seized sites include Bookmaker.com, 2Betsdi.com, Funtimebingo.com, Goldenarchcasino.com, Betmaker.com, Betgrandesports.com, Betehorse.com, and the most recognizable names of the bunch, Doylesroom.com, BetEd.com and TruePoker.com.

Immediately after taking down Bookmaker.com, the company simply shifted to the bmaker.com domain and continued to do business in the U.S.

One of the sites taken down was the popular Doyle’s Room online poker site, once promoted by poker legend Doyle Brunson. He cut ties with the poker site in early May after the Black Friday indictments were handed down on April 15.

At the time, Brunson released a statement stating, “Although they believe they have the right to market the name DoylesRoom and use my name and likeness for a period of time, I have asked them not to.”

The company rejected his request.

“Doyle Brunson was a sponsored pro of DoylesRoom and he has left his endorsement contract,” the company said in a statement. “We have purchased his image and likeness and are allowed to continue to use those.”

The site, like the nine other sites seized, today only display the seals of the Justice Department and Homeland Security, with the message that the sites have been breaking the law.

The snare the indictments, Homeland Security Investigations set up a payment processing company, Linwood Payment Solutions, to process funds received from U.S. players. The company reportedly processed over 300,000 transactions totaling more than $33 million.

Meanwhile, the pressure is ramping up to get an online gaming bill through Congress before it adjourns for the year. As with the Black Friday indictments, the industry took a position that such a bill would aid law enforcement in shutting down illegal gaming sites and protect innocent consumers.

AGA President and CEO Frank J. Fahrenkopf, Jr. praised the Maryland action, but said it only went halfway.

“Strong enforcement against illegal operators and unambiguous U.S. laws are vital,” Fahrenkopf said. “Unfortunately, these indictments are only a half measure. The full solution is law enforcement and federally sanctioned state licensing and regulation of online poker for gaming companies that currently abide by U.S. law.

Even with the federal action against the 10 websites, Fahrenkopf said there are many others acting in violation of U.S. law, with more than 1,000 U.S. facing websites that accept wagers from American players.

“Legislation is needed that removes the current ambiguity of UIGEA and provides a strong regulatory framework to preserve states’ rights to determine the online poker options available to their residents,” Fahrenkopf added.

In an interview with The Hill, a newspaper serving the political community in Washington, Fahrenkopf repeated the AGA and industry position.

“The AGA supports the licensing and regulation of online poker in the United States because we know U.S.-licensed gaming companies, following proven and rigorous gaming regulations, will provide safe, honest and responsible sites for the use of the men and women who want to play online poker," stated Fahrenkopf. "It will also protect Americans from unscrupulous operators and bring the jobs and revenues associated with this billion-dollar industry back to the U.S.”

The online poker advocates also joined forces to demand the legalization of the activity and the end to prosecution of companies serving U.S. players.

At a rally on Capitol Hill sponsored by the Poker Players Alliance, Rep. Joe Barton (R-Texas) confirmed that he would author and submit a bill to the House that would legalize online poker.

“We have it with the drafting people here in the Congress right now, so I would say sometime early-to-mid summer, and certainly before August,” Barton told GamblingCompliance at the rally.

Unlike the bill sponsored by California Republican John Campbell and Massachusetts Democrat Barney Frank, Barton’s bill would be confined to the legalization of online poker, not full online gaming.

And because Barton’s bill designates the U.S. Department of Commerce as the regulatory seat, the measure will be introduced in the House Committee on Energy and Commerce, where he is one of the ranking Republicans.

Barton says he is aware that the only way a bill will get passed is to cooperate with the Senate so that similar versions of the bill pass both houses. He hopes to collaborate with Senate Majority Leader Harry Reid and outgoing GOP Senator Jon Kyl of Arizona, a previous opponent to most gaming bills.

Michael Waxman, spokesman for the Safe and Secure Internet Gambling Initiative, said millions of Americans are frustrated by the hoops they have to jump through just to play the game they love.

"I would be shocked if the confluence of media attention and public appeals to regulate internet gambling doesn't serve as a sufficient catalyst and motivator for Congress to move on this issue," said Waxman. "As the federal indictments have illustrated, the freedom of the Internet has allowed millions of Americans to find a way to gamble online. With more than a thousand operators targeting the U.S. market, government attempts to shut them down one at a time is futile. The commonsense solution is for Congress to heed the increasing calls for legislation to control the activity and capture the significant economic benefits."

Former Senator Al D’Amato is now the chairman of the Poker Players Alliance. He believes now is the time to get a bill passed.

“I think that legislation that permits poker only has a good chance of passage because this is where the rubber meets the road,” D’Amato told GamblingCompliance. “We’ve gotten to the point now where people have been deprived of their right, that’s 10 million people, and it’s time for the Congress to stand up and be counted one way or the other.”

At the East Coast Gaming Congress (see Weekly Feature), a panel sponsored by Global Gaming Business magazine of experts in online gaming debated whether or not i-gaming should be legalized on a federal level or state-by-state.

Jan Jones, senior vice president of communications and government relations for Caesars Entertainment, argued for the federal option, holding that the online industry cannot grow with separate regulatory and taxation setups for each state.

Richard “Skip” Bronson, chairman of U.S. Digital Gaming, countered that a federal bill is never going to happen, and that state governments see online gaming as their own issue. “There’s a reason there are 43 state lotteries and no national lottery,” Bronson said, likening i-gaming to the spread of the lottery industry.

Meanwhile, one of the people indicted on April 15 pleaded guilty last week, and could be turning into a witness for the prosecution. Bradley Franzen is one of the 11 people charged. Franzen was involved in payment processing. He pled guilty last week to conspiracy to commit money laundering, conspiracy to commit bank fraud, and to accepting funds in connection with unlawful internet gambling. He faces up to 30 years in prison, but should get a break if he cooperates with prosecutors.

By Staff