Online poker companies will help return money to players

Two online poker companies whose founders face charges of money laundering and illegal gambling reached deals with the U.S. Justice Department that will assist in the return of money to players, the government said.

PokerStars and Full Tilt Poker entered into domain-name use agreements with the federal government, U.S. Attorney Preet Bharara in Manhattan said Wednesday in a statement. The agreements will restore the companies’ domain names so they can return money to U.S. players, and the deal permits them to continue to let players outside the United States gamble online.

A U.S. Attorney’s Office spokeswoman in Manhattan declined to comment on the amount of money both companies will have to return to U.S. players.

However, while they may be allowed to withdraw funds, players in the United States will not be able to play real-money poker on either site.

"No individual player accounts were ever frozen or restrained, and each implicated poker company has at all time been free to reimburse any player’s deposited funds," Bharara said in a two-page statement outlining the conditions of the agreements. "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 their return of the funds to players."

U.S. poker players lost access to their accounts when federal authorities on Friday seized five Internet domain names and froze 76 bank accounts in 14 counties that allegedly belong to online poker companies.

As of Wednesday, three of the websites seized — absolutepoker.com, ultimatebet.com and ub.com — continued to feature a warning that the "domain name has been seized by the FBI," as well as information on federal gambling and money-laundering laws.

Fulltiltpoker.com was a blank page, while pokerstars.com posted a statement saying the site "ceased providing real-money poker" to U.S. residents.

"All existing United States PokerStars customers are entitled to a full return of any funds held in their accounts, and PokerStars will work diligently to expedite those withdrawals," the company said. "All PokerStars player deposits are completely safe."

In an indictment unsealed on Friday, 11 people, including the founders of PokerStars, Full Tilt Poker and Absolute Poker, were charged with conspiracy to commit bank and wire fraud, money laundering and illegal gambling.

The federal government also filed a civil complaint against the companies seeking the forfeiture of about $3 billion.

Bharara said Absolute Poker has the option to agree to the same arrangement.

The Poker Players Alliance remained cautious despite the U.S. Attorney Office’s decision.

"The poker players have spoken, and it seems the U.S. Government has heard their cries," John Pappas, executive director of the Poker Players Alliance, said in a statement. "But players are still in pain. While (this) 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 play poker online."

The regulatory authorities that licensed Absolute Poker and PokerStars issued statements about the complaints filed against both companies by the U.S. Attorney’s Office.

The Kahnawake Gaming Commission said it is reviewing the indictments, one of which, Absolute Poker, holds its primary gaming license in Kahnawake.

"The KGC’s principal concern is that players are not adversely affected by the actions taken by U.S. authorities. The KGC is presently engaged in discussions with its licensee concerning the status of player accounts," the statement said.

The Mohawk Territory of Kahnawake is a sovereign jurisdiction located near Montreal.

"Upon completion of its review, the KGC will determine what steps may be required and will issue a further statement at that time."

Regulators with the Isle of Man Gambling Supervision Commission, which oversee PokerStars, said while they were discussing the matter with the online poker company, "we can confirm that PokerStars’ licensing status in the Isle of Man remains unchanged."

Contact reporter Chris Sieroty at csieroty @reviewjournal.com or 702-477-3893.