The running battle between the Department of Justice and Internet poker companies appears to be coming to a head according to recent news reports.
For years since the UIGEA, the DOJ has contended that companies that help online poker for money are breaking U.S. law. For just as long, these companies have claimed that they abide by existing legislation.
The sparring between the two parties has till now taken place before the Congress and in the media, with the ammunition of choice being the quoting of obscure statutes and the presenting of inspired interpretations of the law. This contest has now moved to a court of law presided over by federal judge Lewis Kaplan.
Specifically, the case involves the motion put forth by John Campos and Chad Elie seeking the dismissal of the indictment brought against them by the federal government. In April, the two men along with nine others were indicted in a sweeping government action against the online poker industry in the U.S. More than just deciding the fate of Campos and Elie, the verdict in this case will define the very future of the online gambling industry in the U.S.
Although it’s too early to predict the final outcome, in the opening hours of the trial Judge Kaplan appeared to be highly sceptical of some of the arguments presented by Campos’ lawyer Fred Hafetz.
Campos was the vice-chairman and part-owner of SunFirst, a bank that processed online poker transactions. His lawyer is trying to argue that according to the 2006 Unlawful Internet Gambling Enforcement Act financial transaction providers are exempt from criminal liability and therefore his client had not broken the law. He sought to link an exemption for SunFirst with exemption for Campos. The judge firstly did not agree with the contention that financial institutions were exempt and also questioned the linking of SunFirst’s status with that of its ex vice-chairman.
Chad Elie’s lawyer Paul Clement on the other hand sought to remove his client from the ambit of the Illegal Gambling Business Act saying that PokerStars and Full Tilt Poker – companies with which Elie had dealings – were both registered offshore. He also argued that poker was not mentioned in IGBA’s list of gambling games. He also argued that his client had not committed bank fraud as alleged because the banks did receive the payments that they had been promised. His client had merely lied to the banks about the nature of the transactions, he said.
Assistant U.S. Attorney Arlo Devlin-Brown, who is spearheading the prosecution, countered these arguments saying that the two companies, PokerStars and Full Tilt Poker, were not off shore entities because they actively marketed their sites in the U.S. and they had quickly moved to block U.S. players from their sites in the aftermath of the April indictment.
The trial is scheduled for March and it is not sure if a jury will be called upon to decide on the status of poker with regard to gambling. It was revealed in the course of the proceedings that one of the eleven persons who were initially charged and arrested, Ira Levin, has struck a deal with the government and that he would not be tried.