Real Money Poker Giants Settle in Court
Last year, the United States Department of Justice seized control of the domains names of two elite online poker sites, PokerStars and Full Tilt Poker, officially charging the operators with numerous criminal activities that included player fraud, bank fraud and illegal online gambling. Nearly a year later now, a settlement has finally been reached.
Once the world’s largest online poker sites, PokerStars and Full Tilt Poker settled by agreeing to surrender $731 million. Of that money, a whopping $547 million will be used to reimburse former American members of Full Tilt Poker who have yet to have their frozen accounts returned to them.
Each company chose to settle in its own way. PokerStars chose to pay the bulk of the settlement in exchange for the right to continue independent operations and secure the option to operate a legal online gambling site within the United States in the future, once the proper structure for regulated, licensed internet poker is established in the US.
Full Tilt Poker, on the other hand, elected to cease all independent operations. Interestingly enough, neither company actually admitted to any wrong-doing in the settlement agreement.
One of the biggest factors working against Full Tilt Poker is that the company argued it was headquartered in the Channel Islands. While the main base of operations was in fact located here, a good majority of its owners resided on US soil. One notable director would be Chris “Jesus” Ferguson, five-time WSOP bracelet winner and champion of the 2000 World Series of Poker Main Event.
According to authorities, Chris Ferguson was not just a member of the site’s infamous Team Full Tilt Pros, he also owned 19% of the company. In fact, all of the poker site’s team players were offered a slice of the proverbial pie – part ownership in the company – when they signed their sponsorship contracts with Full Tilt.
Back in September of 2011, when the case was first filed, the DoJ alleged that Chris Ferguson, along with fellow Team Full Tilt Pros Howard Lederer and Rafe Furst, “lined their own pockets with funds picked from the pockets of their most loyal customers, while blithely lying to both players and the public alike about the safety and security of the money deposited.”
PokerStars and Full Tilt Poker were, at one time, the largest online poker sites in the entire world. Their stronghold was solidified in 2006 when the US government unleashed the Unlawful Internet Gambling Enforcement Act (UIGEA) late that year. The majority of online poker sites that allowed US players chose to pull out of the market. PokerStars and Full Tilt chose to instead continue allowing US residents to play real money poker at their websites; the exact reason they are in the position they are in now.
Americans who once played online poker at these sites, even after the UIGEA of 2006, were given complete indemnity by New York’s US Attorney, Preet Bharara. According to reports, Bharara defined American real money poker players as “victims” who deserve to be compensated for the player fraud committed against them. He told the New York Times that the settlement would “allow us to quickly get significant compensation into the victim players’ hands.”