Black Friday Overview - What is Black Friday?

Black Friday in the online poker industry occurred on April 15th, 2011 when the United States District Attorneys Office of Southern New York unsealed an indictment against major operators of US online poker sites.  The indictment which cited a number of charges ranging from operating an illegal gambling business to money laundering targeted principals at major sites including PokerStars.com, FullTiltPoker.com, UltimateBet.com and AbsolutePoker.com.  It also implicated a number of other individuals who were either directly or indirectly linked to the financial side of the businesses listed in the original indictment.  The April 15th indictment included the following company principals as well as payment processors with charges and international arrest warrants:

  • Isai Scheinberg (Founder of Pokerstars)
  • Raymond Bitar (Full Tilt Poker CEO)
  • Scott Tom
  • Brent Beckley
  • Nelson Burtnick
  • Paul Tate
  • Ryan Lang
  • Bradley Franzen
  • Ira Rubin
  • Chad Elie
  • John Campos (CEO Sun Trust Bank)

In conjunction with the unsealing of the indictments was the seizure of prominent poker domains associated with the operators and the PokerStars.com, FullTiltPoker.com, UB.com and AbsolutePoker.com domain names were seized on the same day following the release of the charges.  There were also dozens of international and local bank accounts frozen that contributed to most of the operating funds used by the sites to conduct withdrawals as well as finance daily operations.

This caused havoc amongst the online poker community as sites quickly scrambled to try and get operations back online since they were immediately disrupted when the domains were seized.  Since Black Friday the only sites successful in regaining control of their domains are PokerStars and Full Tilt.  Below we’ve provided an overview of the different sites and how they’ve reacted to the charges from Black Friday contained in the indictments.

PokerStars – Prior to Black Friday PokerStars was the largest online poker site in the world and when its domain was seized thousands of players anxiously waited for news on their funds and if they would be able to retrieve them.  PokerStars was quick to act and made a deal with the USDOJ to have their accounts unfrozen and began the process within a few weeks of returning funds to US players.  What’s interesting about this is that the USDOJ permitted to them to continue operating as long as they did not accept any players located in the United States.  Currently PokerStars is operating as normal outside the US but still faces the charges from the lawsuit and their owner and founder’s whereabouts unknown.

Full Tilt Poker – One of the most affected companies in the post Black Friday havoc was Full Tilt Poker and although it managed to get its domain back a short time after PokerStars US players have been unable to receive their funds.  After the indictment Full Tilt’s main accounts were frozen and it has also recently come to light that the company grossly mismanaged its finances crediting uncollectable deposits as well as loaning money to their sponsored pros.  Recently they also had their Alderney Gaming License suspended for non-payment of fees and are currently engaged in a legal proceeding whereby new investors could acquire the site and pay back US players if an agreement is reached.

UltimateBet & Absolute Poker – Both Ultimate Bet and Absolute Poker have made no moves to quickly return US player funds and have basically ceased operation for all intensive purposes firing most of their staff located in Costa Rica.  There have been reports that players are allowed to withdraw a maximum of $250 per week however in all likelihood this operation will fold up and take the funds they still have unfrozen.  Ultimate Bet and Absolute Poker were also involved in a cheating scandal whereby certain accounts could see their opponents hole cards and Black Friday has marked the beginning of the end for the tainted brand which has little chance of ever operating in the online poker space again.

Sportsbook.com & Players Only – Sportsbook.com and Players Only were another popular US poker brand that recently decided to exit the market due to the lawsuits and risks of operating in the US market. 

Why Did Black Friday Happen?

Black Friday was the culmination of regulatory changes brought about in 2006 through the UIGEA (Unlawful Internet Gambling Enforcement Act) which basically made it illegal for US banks to facilitate, accept or process financial transactions related to online gambling.  To skirt this legislation, poker sites used hundreds of third party payment processors to hide the nature of funds in order to provide deposit and withdrawal facilities to their players.  This was conducted via a number of methods including credit cards, eChecks as well as electronic funds transfers involving numerous shell companies and entities around the world and is the heart of the Black Friday Indictments.

In 2009, the US Department of Homeland Security setup an organization called Linwood Payment Solutions (www.PaymentProcessingSolutions.com) which was a front company created to gain an inside track on how the online poker sites conducting their financial transactions.  Over the course of 2 years, Linwood executives (really US agents) signed processing agreements with major players listed in the indictments which enabled them to gather evidence and build a case against the operators and intermediaries involved in processing the gambling transactions.  By 2011 when the indictment was released, Linwood had processed tens of millions of dollars for the operators and knew every detail of their processes enabling them to easily freeze suspect accounts and build an incredibly strong case against the poker operators.

Can I Still Play Online Poker From The USA?

Although many of the major online poker sites shutdown post Black Friday there are still a small number of quality US poker sites that are accepting deposits from US players.  Because of the volatility in the market right now only a small number of sites have the capabilities necessary to allow US signups so its best to check this site as often as possible for the latest information on which sites are and aren’t accepting players located in the United States.  Currently US players best deposit options include credit cards, Pre-Paid cards, Wire Transfer and Western Union or Moneygram, be sure to check directly with each US site to ensure that they offer a feasible deposit method to fund your player account. Some sites, like BetOnline are able to accept all poker players. This means that USA poker in New Jersey, Utah, Maryland and even Washington is still possible.

What’s The Future of US Poker Post Black Friday?

Although there is still a lot up in the air with the pending lawsuits, possible settlements and legal challenges against the legality of online poker most industry experts believe that Black Friday was the first step in creating a regulated and legal environment for US players to play poker online.  Prior to Black Friday PokerStars had entered into an agreement with Steve Wynn and his brand to form PokerStarsWynn.com which would serve as a vehicle to offer online poker to US citizens.  After the indictments came down this deal was quickly terminated but it’s widely believe that behind the scenes the framework is being setup to introduce a legal and regulated environment over the next few years.