Feds Crack Down on Internet Poker

Washington,
D.C., June 10, 2009—Just when it seemed that those in power had begun to think
about Internet poker in a positive light, the Department of Justice throws us
back into the digital dark ages by seizing $34 million in funds rightfully
owned by around 27,000 online poker players. The government is alleging that
the funds are associated with illegal online gambling and money laundering.

In a
letter sent to Alliance Bank, the prosecutor said accounts held by payment
processor Allied Systems Inc. are subject to seizure and forfeiture “because
they constitute property involved in money laundering transactions and illegal
gambling offenses.” The letter was signed by Arlo Devlin-Brown, assistant U.S. attorney
for the Southern District of New York. 

This
shocking behavior is game-changing, but typical of the stance the Justice
Department has taken over the years. Throughout the rise of Internet gambling,
they have insisted that all online wagering was federally prohibited by the 1961
Wire Act and sought to prosecute and prohibit such activities. All this despite
the fact that the courts have repeatedly smacked down any attempt to apply the
federal Wire Act (the law that would make Internet gambling federally
prohibited if it applied) to non-sport related Internet gambling. 

“Just
when it seemed that regulators had finally begun to think about internet
gambling as a legitimate activity that citizens have the right to engage in,
the Department of Justice tries to throw us back into the regulatory dark ages
where gamblers are forced to play in dank cellars and burned at the stake” says
Competitive Enterprise Institute Policy Analyst Michelle Minton. 

This move
comes just as Internet gambling legislation sponsored by Rep. Barney Frank
(D-MA) seems likely to pass and states known for anti-gambling positions, such
as Utah, have
begun to come around to the idea of legal, regulated, Internet gambling. 

“The
seizure is outrageous and potentially unlawful itself,” continued Minton. “The actions
of those involved should be condemned, and the law enforcement officials
themselves punished if probable cause was not definitively established. The Department
of Justice should be defending Americans from real crimes not committing
injustices against them.” 

CEI is a non-profit, non-partisan
public policy group dedicated to the principles of free enterprise and limited
government.  For more information about
CEI, please visit our website at www.cei.org.