Major online poker sites accused over money laundering

British gamblers may lose thousands of pounds as accounts are frozen by US investigators

Hundreds of British gamblers stand to lose tens of thousands of pounds after a crackdown on online gambling firms with links to Britain by the US authorities, a leading gambling expert warned. The US Justice Department froze gambling accounts linked to three of the biggest online poker sites after accusing those running them of money laundering and fraud.

Prosecutors claimed the operators of Pokerstars, Full Tilt Poker and Absolute Poker – three of the most popular online poker sites – tricked US banks into processing billions of dollars from customers. US banks are prohibited from accepting payments from illegal gambling websites.

The US authorities also seized the internet addresses, one of which is run from the Isle of Man, another from Dublin and the third from a Commonwealth Caribbean country, where online gambling is legal. The move, seen as a serious escalation in an struggle between the US authorities and the online gambling industry which generates billions, caused outrage among British and international gamblers. Last month, Pokerstars' flagship event attracted nearly 60,000 players competing for prize money of $11.8m (£7.2m).

Pokerstars' owner Isai Scheinberg and the company's director Paul Tate, both Isle of Man residents, were accused of "deceiving United States banks" according to a US Justice Department spokesman. In a statement, prosecutors claimed this was done by "among other things, arranging for the money received from gamblers to be disguised as payments for hundreds of non-existent online merchants and other non-gambling businesses".

A spokesman for the US Attorney's Office said yesterday it was working with "foreign law enforcement" in the hope of extraditing defendants located abroad and seizing their assets.

Legal experts said the case would test US gambling laws. Critics say the law prohibits sports' betting but opinions are divided on whether it covers online games such as poker and blackjack.

UK gambling expert Simon Holliday, director of H2 Gambling Capital, warned the online gambling industry could face a massive confidence crisis. He said: "These sites are like banks. Players put down a deposit to play, and they have to be able to trust these sites. What happened with Northern Rock could happen here, because these sites have had their balances frozen by the US authorities.

"You have to bear in mind that 20 per cent of the players on the sites are money-making – it's their main source of income, like a career. There are some big deposits in there. You'll get lots of small-time gamers who have about £100 stuck in there at the moment. But then there are the big players, who could have tens of thousands in there.

"When these site owners have to pay money back, or if they're fined hefty amounts, they'll see if they can pay out of corporate funds. They probably won't be able to, and they'll think nothing of using their players' funds, just like the banks did. So just like what happened with banks, the players will probably only get a proportion of what they're owed.

"I would speculate that 500 to 1,000 players in the UK could lose anywhere in the region of £2,000, all the way up to £30,000. There will be even larger, high-end losses than that. Worldwide I would estimate about 10,000 professional players could lose very significant amounts of money. It takes about 24 hours to cash in money, but people can't get their money off these sites now. Even if players miraculously do receive the last of their poker cheques in the post, the question is, will they be able to cash them in?"

Ishuez123, a player from London, wrote on an online poker website: "I have a feeling that the suicide rate in the poker world is about to climb. Well played FBI." Another, Rhinodash, from Birmingham, wrote: "This day could forever be known as Black Friday for online poker. If their funds are frozen, how the hell are they going to process all these cashouts?"

Life and Style
ebookNow available in paperback
ebooks
ebookA delicious collection of 50 meaty main courses
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Recruitment Genius: IT Support Engineer - 2nd & 3rd Line

    £25000 per annum: Recruitment Genius: The IT Support Engineer is needed to ass...

    Recruitment Genius: Junior / Mid Software Developer

    £22000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: IT Service Desk Manager

    £35000 - £40000 per annum: Recruitment Genius: A great opportunity to join a p...

    Recruitment Genius: Graphic and Motion Designer

    Negotiable: Recruitment Genius: Do you get a buzz from thinking up new ideas a...

    Day In a Page

    The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

    They fled war in Syria...

    ...only to get stuck and sidetracked in Hungary
    From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

    Title sequences: From The Prisoner to Mad Men

    Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
    Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

    Giorgio Armani Beauty's foundations

    Sumptuous fabrics meet luscious cosmetics for this elegant look
    From stowaways to Operation Stack: Life in a transcontinental lorry cab

    Life from the inside of a trucker's cab

    From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
    Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

    Kelis interview

    The singer and sauce-maker on cooking for Pharrell
    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea