Online poker firms, U.S. government agree on refund plan for players

Two of three firms targeted in a federal crackdown on online poker have reached agreements with prosecutors to "facilitate" the return of money from their accounts to U.S. players, a U.S. attorney announced Wednesday.

Former World Series of Poker champion, Greg "Fossilman" Raymer,has been vocal about the federal crackdown on online gambling.

Preet Bharara, U.S. attorney for the Southern District of New York, announced agreements with PokerStars and Full Tilt Poker.

The indictment last week, which seeks at least $3 billion in civil money laundering penalties and forfeitures, came with restraining orders against about 75 bank accounts used by the firms and their payment processors in 14 countries.

The announcement comes was timely for players contemplating withdrawing funds from their online accounts to participate in the 2011 World Series of Poker, a series of 58 tournaments that begins May 31 in Las Vegas. The Main Event at the WSOP, which last year drew 7,319 entrants at a buy-in of $10,000 each, is set to begin July 7.

Bharara said the firms had already been free to return money.

"No individual player accounts were ever frozen or restrained, and each implicated poker company has at all times been free to reimburse any player's deposited funds," Bharara said in a press release.

But the nature of the agreements announced Wednesday was to allow PokerStars and Full Tilt to use their pokerstars.com and fulltiltpoker.com domain names to facilitate the withdrawals.

Last week's restraining orders were also issued against the Internet domain names used by the firms. Wednesday's agreement stipulated that the Internet sites will not be allowed to use the domain names for "real money" online poker.

"In fact, this office expects the companies to return the money that U.S. players entrusted to them, and we will work with the poker companies to facilitate the return of funds to players," said Bharara.

No such agreement was announced with the third online company involved in the indictments, Absolute Poker.

Wednesday's announcement was welcomed by the Poker Players Alliance, a players' advocacy group based in Washington, D.C.

The group said that in recent days more than 65,000 emails, letters and phone calls had been addressed to the Department of Justice, Congress and the White House urging access to the players' money in online accounts.

"The poker players have spoken, and it seems the U.S. government has heard their cries," John Pappas, executive director of the alliance said in a press release.

"But players are still in pain. While today's action allows players on two of the three online poker sites to access their funds, this is just a small victory in the ongoing fight to protect Americans' rights to player poker online."

The indictment were made under the 2006 federal Unlawful Internet Gambling Enforcement Act.

The indictments named 11 individuals involved in the three firms. All were charged with conspiracy to violate and violation of the Unlawful Internet Gambling Enforcement Act, which prohibits firms from knowingly accepting U.S. payments in connection with unlawful Internet gambling.

Nine were charged with conspiracy to commit bank fraud and wire fraud. Ten were charged with money laundering conspiracy.

Each count of the indictments carries a maximum penalty of five years in prison and three years of supervised release, plus monetary penalties.

The Poker Players Alliance wants government to license and tax online poker.

"At a time of such economic weakness in the U.S., citizens expect their government to be wholly focused on improving their way of life through job and revenue creation, not attacking their personal activities," said Pappas.

"Congress needs to recognize the benefit of licensing and regulating online poker to protect players' rights while adding thousands of jobs and billions in revenue to the U.S. market."

Some of the fallout so far from the federal crackdown:

? Full Tilt has been a major sponsor in mixed martial arts. It was on the verge of returning to the Ultimate Fighting Championship. But Caren Bell, a spokeswoman for UFC's parent company Zuffa, confirmed in an email to USA TODAY the deal has been shelved.

? ESPN2, which was to begin taped coverage of the North American Poker Tour Monday night, said the shows will not air in light of PokerStars being the sponsor.

"Plans have not changed" for the WSOP, said spokesman Mike Soltys of ESPN, which aired WSOP shows from July 27 through Nov. 9 last year.

The World Series of Poker, operated by Caesars Entertainment, declined comment on possible effects on the World Series.

Entries took a hit after the 2006 enactment of the federal Unlawful Internet Gambling Enforcement Act, which prohibits gambling businesses from knowingly accepting U.S. payments in connection with unlawful Internet gambling.

There were a record 8,773 entries in the Main Event in 2006. The next year, after the WSOP prohibited third parties such as online gaming firms from directly paying the $10,000 entry feed for participants, entries fell to 6,358.

But despite the WSOP ban on third-party entries, online companies still offered tournaments in which winners could earn the equivalent of the Main Event entry fee. It was up to them whether they played.

Entries rebounded steadily in recent years. Last year's total (7,319) was second most ever.

But the recent indictments raised questions about whether they would result in diminished entries for this year's WSOP and Main Event. Those questions were tied to uncertainty about whether players would be able to access their online accounts to get money to play in the World Series.

Wednesday's announcement in New York addressed that.

But the indictments remain.

"The government shouldn't have anything to do with morality in general," says Greg Raymer, who won the $5 million top prize at the 2004 Main Event after winning his seat in a PokerStars tournament that cost $160 to enter.

"The government should be protecting us here. That's why they should be creating a law to license and regulate online poker, the same way they protect us from bad food. … These people (in online poker) are saying, 'Please, pass the law, give us a license and then we'll be happy to pay taxes.' "