Silver Linings in Black Friday

Published on: May 28, 2011 

On April 15 2011 a new term got added to the online gambling lexicon. This was ‘Black Friday’. On Friday April 15 the US Department of Justice (DoJ) seized the domain names of the three largest American online poker rooms, Full Tilt, Poker Stars and Absolute Poker. While over the next month the ramifications of Black Friday were playing out, the DoJ hit the online gambling industry with ‘Blue Monday’. On Monday May 23 ten online gambling sites faced indictments. Though none of these were as high profile as the Black Friday sites, there were some ominous signs. The ten sites were not only online poker rooms, but included online casinos, bingo halls and sports books. The second set of seizures involved the federal authorities setting up a front payment processing company, which lured the online gambling sites to engage with it.

While much has been written about the harm that Black Friday and Blue Monday have caused to online poker in particular and online gambling in general, silver linings are beginning to appear. It is becoming increasingly clear that the DoJ does not intend to target individual players in its drive against online gambling. US Attorney Rod Rosenstein, the prosecutor in charge of the Blue Monday indictments, said as much in an interview with Maryland’s news, talk and sports station 1090AM WBAL. “These indictments target, not the users but the businesses that are in violation of US law by providing these services.” Rosenstein however clarified that those online poker and casino players residing in states that specifically outlawed online gambling could be at personal risk.

Even before this statement the DoJ had demonstrated willingness to walk the extra mile in order to help out the players of the three big poker sites. They came to terms with the poker sites and agreed to release the online domains for the specific purpose of returning the players’ balances. PokerStars was the first to act. It has returned more than $100 million to its players. A news report appearing on May 27 stated that about one-fourth of the accounts of Full Tilt have been set free by the DoJ. However, it is not yet clear when the online poker room will start making the refunds.

On a macro level, Black Friday and Blue Monday seem to have united the gambling industry and there appears to be greater urgency in pushing the legislators towards a legalized and regulated online gambling regime. The American Gaming Association (AGA) is the representative body of land casinos in the United States. Over a year back it was against legalization of online gambling, then for a while it was sitting on the fence. But after Black Friday its president and CEO, Frank J. Fahrenkopf, Jr. has repeatedly advocated a federally regulated online gambling regime.

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