Opinion: Stars US exit "validation" debatable
PokerStars, Full Tilt and Absolute Poker's domain seizure on 15 April last year was "validation" for those that exited the US in 2006 bwin.party's Alen Lang said at last week's G2E in Vegas but, argues Wiggin's Jason Chess, things might not be so clear cut.
eGaming Review reported last week from a panel at the G2E show in Las Vegas that bwin.party’s Alen Lang said the poker industry received “validation” when PokerStars (et al) had their domains seized on Black Friday.
This is, of course, an interesting point to lawyers because since charges were filed against PokerStars back in April of 2011 events have developed in a way which might instead be taken as validating the PokerStars’ view of the cosmos. The nub of this “ as readers will recall “ was that as far as US federal law was concerned, poker was a game of skill hence the Wire Wager Act of 1961 and UIGEA in 2006 did not apply to poker.
PokerStars consistently took this view as a consequence of receiving more than one heavyweight instalment of legal advice on the matter and hence saw no need to discontinue its US-facing operations in the wake of UIGEA. The operators of the company obviously trusted their legal advisors and saw no reason why an arm of the law should force them out of a market they believed they were lawfully accessing. Lawfulness or unlawfulness is, after all, a matter for the courts to decide and not the executive to dictate, and once upon a time we cut a King’s head off to prove that not inconsequential point.
Notwithstanding the divergence in legal opinion, former PartyGaming executive Anurag Dikshit pleaded guilty to infringements of the Wire Wager Act 1961, and as recently as 2007, then US Attorney Catherine Hanaway said in congressional testimony that the Wire Act applied to all internet gambling.
The US Department of Justice, however declared in December 2011 that the Wire Act was simply confined to sports wagering. Moreover in August 2012, US District Court Judge Jack B. Weinstein rendered a judgment on behalf of the Eastern District of New York to the effect that poker is a game of skill, and is therefore an activity not covered by the Illegal Gambling Business Act (IGBA), an Act which PartyGaming effectively admitted violating as part of the Non-Prosecution Agreement into which it entered with the DoJ in April 2009.
This represents an extraordinary reversal of course by the Federal Authorities and the effect is that the official Federal attitude to online poker now appears to be identical with the historical view of the legal status of online poker as taken by PokerStars, while PokerStars has of course admitted no offence under US laws. PokerStars has, despite this, paid a great deal of money to the US authorities but it has received in return explicit confirmation that there will be no blemish on its record for the purposes of entering any future regulated US poker market as well as gaining control over former rival Full Tilt’s brand, software and intellectual property.
“Validation” of Black Friday “ one way or t’other “ remains a very debatable matter.
Jason Chess is Head of the Betting & Gaming Practice at Wiggin LLP and a member of the International Masters of Gaming Law