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Online Poker Winnings Are Frozen - Government Freezes Accounts Of Payment Processors

ohbhave

WELL KNOWN MEMBER
updated 7:43 p.m. PT, Tues., June 9, 2009 WASHINGTON - An advocacy group for online poker said Tuesday that the federal government has frozen more than $30 million in the accounts of payment processors that handle the winnings of thousands of online poker players. The Justice Department long has maintained that Internet gambling is illegal, a view that the poker group challenges. The Poker Players Alliance told The Associated Press that the U.S. attorney for the Southern District of New York instructed three banks Citibank, Goldwater Bank and Alliance Bank of Arizona to freeze the accounts. Documents obtained by the AP show that a magistrate judge in the district issued a seizure warrant last week for an account at a Wells Fargo bank in San Francisco, and that a federal prosecutor told Alliance Bank to freeze accounts. In a letter dated Friday and faxed 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. In another letter faxed the same day, Devlin-Brown asks that the bank treat the funds as legally seized by the FBI, saying that the government has probable cause that the gambling payments of U.S. residents had been directed to offshore illegal Internet gambling businesses. The FBI has authority to seize proceeds of specified unlawful activity without a warrant under exigent circumstances, wrote Devlin-Brown a process criticized by the Poker Players Alliance. In addition, a grand jury subpoena issued last week to Allied Systems seeks communications, financial transactions and processing services between the company and Internet gambling operations. The subpoenas also seek corporate records and bank accounts. A spokeswoman at the Southern District declined to comment. John Pappas, executive director of the Poker Players Alliance, called the governments move an unprecedented action against online poker players. In a letter Monday night to Devlin-Brown, Pappas requested that his group be notified and given the opportunity to be heard regarding attempts to seize the frozen funds. He said that seizure of Allied Systems bank accounts would constitute a violation of due process because there are no exigent circumstances to justify deprivation of PPA members property without prior notice and a hearing. The PPA will pursue every legal course available to ensure that poker players funds are not seized and their right to play poker online is protected, Pappas wrote. In the interview, Pappas said 20,000 player accounts were affected, but that his group has received assurances from online poker sites that the players would be fully compensated. A 2006 law prohibits financial institutions from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers. The Justice Department viewed Internet gambling as illegal even before that. In a statement, the alliance chairman, former New York Republican Sen. Alfonse DAmato, said the frozen funds belonged to individual poker players, not poker Web sites. This money should be immediately released by the Southern District to ensure that player payouts are not further disrupted, he said. The alliance, which is funded by its poker player members and the Interactive Gaming Council, a Vancouver, British Columbia-based trade association for online casinos, plans to spend $3 million lobbying this congressional session. The group supports legislation by Rep. Barney Frank, a Massachusetts Democrat who chairs the House Financial Services Committee, that would regulate rather than ban Internet gambling. At least half the $16 billion Internet gambling industry, which is largely hosted on overseas sites, is estimated to be fueled by U.S. bettors.-- Edited by ohbhave on Wednesday 10th of June 2009 12:07:24 PM
 
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Mistye81

WELL KNOWN MEMBER
I am expecting a $800 check from PokerStars any day now. I have read other articles online, and others experiences, several people have complained about their checks bouncing. I am almost scared to try to cash it. After writing PokerStars I was assured that the check is in a seperate group, and I should have no problems cashing it. Heres to hoping that it goes through.
 

Felicie

WELL KNOWN MEMBER
Doesn't this appear to be in regards to New York state players only? Or am I missing something. Thank you.
 

Mistye81

WELL KNOWN MEMBER
I think its everybody, I have been keeping track of whats going on, everyday it seems the government is freezing more and more bank accounts. I really don't know what to think, but we all need to write our congress and government, they should have better things to focus their time and efforts on, than worrying about whether people are gambling online. I have a feeling this is just the beginning. Please take time to write and voice your opinions.
 
why have the us goverment got such a hatred for people to gamble there own money online, they are just a bunch of retards if you ask me, boy im glad i live in the uk, dictatorship hasnt reached us yet
 

ohbhave

WELL KNOWN MEMBER
OMG, out of the blue, my PokerStars account has been frozen.  Seriously.  The other ngiht I was playing but the next day I could not log in.  It gave me an error code for me to contact support with, which I did.  I have gotten no response for 2 days and I still cannot log in.  I even tried uninstalling/reinstalling the software but to no avail.  My bankroll was less than $100, but I used my bank account to fund it this time.  Jeez, I totally forgot about this article I posted here.  Oh, everyone please cross your fingers for me.  I am not going to press the issue with PokerStars.  I think its worth the $100 to just walk away and pray I fall through the cracks, so to speak.  I will keep you posted if anything arizes.
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Felicie

WELL KNOWN MEMBER
What are they going to do to you? If it was on the books as against the law in California I don't think we'd be able to even get to a site let alone play do you? If I am missing something here, please tell me cause I'm in no mood to go to prison this late in my life LOL. Our govt. is so outta control its really scary but I don't think financially speaking they are ready to totally deny themselves the revenue they could get by regulating online gambling instead of outlawing it. These stupid acts of freezing accounts and taking domains seems to be happening at state level by corrupt politicians who are getting paid well to sabotage online gambling as much as possible because the 2006 law is so far from clear, it has become a free-for-all. "
It's like a bad movie, a sequel to Serpico (no offense intended) "
I am arguing with my bank on a weekly bank about what I do in my own checking account. This is why people go postal . They can't take it anymore. I think we just all need to go postal on someone's ass. But don't quote me. "
Have a winning weekend people because who knows what or who will be next. "
 

ohbhave

WELL KNOWN MEMBER
Felicie wrote: What are they going to do to you? If it was on the books as against the law in California I don't think we'd be able to even get to a site let alone play do you? If I am missing something here, please tell me cause I'm in no mood to go to prison this late in my life LOL. Our govt. is so outta control its really scary but I don't think financially speaking they are ready to totally deny themselves the revenue they could get by regulating online gambling instead of outlawing it. These stupid acts of freezing accounts and taking domains seems to be happening at state level by corrupt politicians who are getting paid well to sabotage online gambling as much as possible because the 2006 law is so far from clear, it has become a free-for-all. It's like a bad movie, a sequel to Serpico (no offense intended) I am arguing with my bank on a weekly bank about what I do in my own checking account. This is why people go postal . They can't take it anymore. I think we just all need to go postal on someone's ass. But don't quote me. Have a winning weekend people because who knows what or who will be next.
WOW, girl.  You took the words right outta my mouth!  But, I do have some good news... my frozen account (make that - accounts) have nothing to do with the Feds.  Apparently, I broke PokerStars rules when I created a new user account last week. 
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I had a couple of problems with other players in the past and so I wanted a clean slate.  It wasn't until I funded my account with the same banking info as my origional user account, that they clued in to it.  Guess I shoulda read the rules first. Supposedly, both of my accounts are permanently retired now.  Now I just need to find a husband so that I can legally change my name... that's the only way I'll ever be able to play there again. lmao  Oh well, se la vi. 
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btw, they refunded my deposit, so its all good. 
 
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Felicie

WELL KNOWN MEMBER
Ok so let me get this straight; amidst all this big hulla-balloo turmoil, you the unbehaven managed to get your accounts frozen, all by your little ole self? I'm sorry but that is so funny and no disrespect intended.This day is startin to look up
 
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Felicie

WELL KNOWN MEMBER
Its all about flop & drop and poop & scoop - clear as mud and sharp as a marble - No answers and the sad thing is this; If this whole country doesn't change its spending habits, all the gambling revenues in the world will not put humpty-dumpty back together again. Gotta get off this box now so I can go get some fireworks. And Ohbehave maybe a rocket or 2 would thaw out those frozen accounts for ya. 
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sorryCalifornia Online Poker Legal?Is Playing Poker Online in California Legalby Chuck HumphreyUS Federal Gambling LawsState Gambling LawsState Charitable Gaming LawsState Law SummaryGambling Law ArticlesUseful SitesState Gambling AgenciesSearch-Site MapContact[NOTE: This article was written before a change in California law that now permits the so-called 'no flop, no drop' rule. See material in [RED] in text of article below. Therefore, the conclusion that playing online is technically illegal in California is no longer correct.]Professor I. Nelson Rose [1] wrote a short article entitled Is It A Crime to Play Online? His article is intended to look at this question only from the standpoint of the player, not from the standpoint of the operator of an online gambling website [2]. He says: All states make it a crime to conduct some forms of unauthorized gambling. But about half the states also make it a crime to make a bet under some circumstances, even though nobody is ever charged any more. (Emphasis supplied.)The author says: California, for example, makes it a crime to play 11 named games, including '21' and any 'banking or percentage game.' The California Penal Code also makes it a misdemeanor to make sports bets. But other wagers are not forbidden. It is not a crime to buy a lottery ticket, even in an illegal numbers games. Thus, his view is So, at least in California, it seems it is not a crime to play poker online for money. (Emphasis supplied.)I think the better, more legally supportable, conclusion is: playing poker for money in California at the popular online poker websites is illegal, but in today's tolerant atmosphere the risk of being charged with a criminal misdemeanor is far less than the chance of getting a speeding ticket, and the actual penalty to befall anyone who is charged will be not much more serious than the speeding ticket. Here is my analysis and reasoning to support that conclusion.California Penal Code Sec. 330. provides: Every person who plays... any banking or percentage game played with cards... for money, checks, credit, or other representative of value, and every person who plays or bets at or against any of those prohibited games, is guilty of a misdemeanor... (Emphasis supplied.) The conclusion Professor Rose reaches is correct for the situation where the player bets in an online poker game that is NOT also a percentage game. This is because playing poker for money in California is legal so long as the particular game being played does not run afoul of the other provisions of the law. Social home games are an example. As long as no one makes money, other than as a mere player, it is OK to play in a real money home poker game. In addition, playing in duly licensed California cardrooms does not run afoul of the prohibition because those cardrooms charge players in a manner that is not considered to be a percentage rake.However, the conclusion is incorrect where the player bets in an online poker game if that game is a percentage game. All of the major online websites that offer real-money betting on poker games charge a fee of some kind for the opportunity to play. Usually the fee takes the form of the website operator being entitled to a rake that is a percentage of the money in a given pot, limited to a maximum amount. In tournament play there is an entry fee that may be viewed as a percentage of the buy-in amount each player pays, the sum of which buy-ins make up the prize pool to be split among the winners, since the amount increases as the buy-in amount increases. I am not aware of any online real-money poker games that do not have a rake or entry fee for most real-money poker games and tournaments. I believe the existence of the rake or entry fee makes the poker game a percentage game, all of which are banned as a class by Section 330. In Sullivan v. Fox, 189 Cal.App.3d 673, 235 Cal.Rptr. 5 (Cal.App. 1 Dist., 1987) the interpretation of what constitutes a percentage game under California law was first stated. Three different methods of calculating the amounts to be paid to the house by players were considered: (1) a portion of each participants winnings, (2) a fixed portion of the amount of each bet, or (3) the time that each participant plays. The court held that if either of the first two methods is used, then the game will be a percentage game. Only the third method was determined to be a permissible form the house could use and still avoid having the game be declared a percentage game. I believe the rake in real-money online poker games and tournaments falls into either or both of the first two categories mentioned in Sullivan.In response to several court decisions in California in 1998 and 1999, California Penal Code Section 337j was adopted. It provides: No fee may be calculated as a fraction or percentage of wagers made or winnings earned. Fees charged for all wagers shall be determined prior to the start of play of any hand or round. The actual collection of the fee may occur before or after the start of play. Ample notice shall be provided to the patrons of gambling establishments relating to the assessment of fees. Flat fees on each wager may be assessed at different collection rates, but no more than three collection rates may be established per table. The first version of this law was passed in 1998. In 2001 the statute was amended to its present text, which allows fees to be collected before or after the start of play. The statute has always required that fees for wagers must be determined prior to the start of play. Collection fees cannot be based on a percentage or fraction of the pot. So a fee calculated as $1 on the first $20 in the pot, another $1 on the next $10 in the pot and a third $1 if the pot is more than $30 would not appear to be allowed for two reasons: first, it would constitute a percentage of the pot and second the amount of the actual collection fee to be charged would not have been determined prior to the start of play. An informal telephone discussion with a member of the California Department of Justice Gaming Division on December 15, 2004, confirmed that view as well as the fact that the Division has not issued regulations interpreting how to calculate collection fees.[Note: Sec. 337j has been amended to change the conclusions originally reached in this article. The following language has been added to the law: However, the gambling establishment may waive collection of the fee or portion of the fee in any hand or round of play after the hand or round has begun pursuant to the published rules of the game and the notice provided to the public. Thus, the 'no flop, no drop' rules discussed below is now permitted in California cardrooms.]The initial problem with the online cardrooms is that they follow the Las Vegas Style no flop, no drop rule. That is, if everyone folds to the big blind (or the dealer button in stud) then no rake is taken in Las Vegas, or in the online cardrooms. This alone would violate the quoted statute, which requires that if a flat fee is involved, the amount must be known in advance, the charge being taken either before or after the hand is completed. Under the Las Vegas style of rake, which the online cardrooms follow, after the flop the rake is calculated as 10% of the pot, up a maximum stated amount, usually $3 or $4 per hand. This, too, violates the statute and technically makes the playing of online poker illegal under Penal Code Section 330 for those who are in California when they play.Under the statute it is conceivable that different amounts of flat fees could be charged on different wagering rounds, but not on different amounts in the pot. In poker, as it is played in the bricks and mortar casinos in California, I am not aware of any that rake pots other than on the basis of $x per hand, regardless of the amount in the pot.The cited provision of Section 337j was adopted in response to several California court decisions in 1998 and 1999 that construed what was meant by a percentage game. The provision of the statute that was adopted approved a fee collection scheme that the court in Sutter's Place, Inc. v. Kennedy, 84 Cal.Rptr.2d 84, 71 Cal.App.4th 674 (Cal. App. 2 Dist., 1999) described as follows: There are two types of tables in the 'California Games' area. One type of table is what we will call the 'low minimum' table. At a 'low minimum' table, the minimum bet that can be placed in each square on the table is $10 and the maximum bet per square is $100. The other type of table is what we will call the 'high minimum' table. The 'high minimum' tables are located in what plaintiff calls the 'Gold Room.' The 'high minimum' tables have a $101 minimum bet and a $200 maximum bet per betting square. Plaintiff's card room collects revenue by charging the participants in 'California Games' a 'collection fee' for utilization of each betting square. At the 'low minimum tables,' the collection fee is $1 per betting square, while at the 'high minimum' tables the collection fee is $2 per betting square. The player-banker pays a collection fee of $2 or $3 at a 'low minimum' table and a collection fee of $5 at a 'high minimum' table.Note that the collection, or rake, does not go up based on the amount bet, but on the fact that a bet of some amount is being made. Any variation in charges during the play of a hand must be made on the basis of the fact of a wager being made, not the amount of the wager. So, an escalation in the rake based on how much is in the pot would appear to be prohibited. Thus, if you are in California and are playing and betting money on poker games at one of the popular online websites, you are likely violating the law.Professor Rose also said: ...about half the states also make it a crime to make a bet under some circumstances, even though nobody is ever charged any more. If that observation is accurate, and given my analysis above, I think the proper question should focus on the legal consequences and risk to the player of getting involved in illegal online betting. The principal inquiry being the likelihood of any law enforcement authority doing anything about the player's engaging in that activity.Professor Rose says that nobody is ever charged anymore. Criminal charges against mere players are few and far between, especially because most such charges would be very low-level misdemeanors, sometimes only resulting in fines. However, since Professor Rose wrote the article there have been a few state criminal charges brought involving online betting under state laws making the bet a misdemeanor. The charges are only misdemeanors, but those charges can have adverse effects that go beyond the mere criminal charges. In Florida a college quarterback, Adrian McPherson was tried on a misdemeanor charge brought against him for making sports bets through an offshore online bookie. The jury hung on the question of his guilt and he subsequently entered into a guilty plea agreement with the prosecutor on that and other pending matters. In North Dakota Jeffrey Trauman pleaded guilty to a misdemeanor charging him with making illegal online sports bets. Professor Rose has subsequently written a column about the Truaman matter appearing in Card Player Magazine (Vol 16, Mo. 21, Oct. 10, 2003.)Thus, in my view, the better, more legally supportable, conclusion is: playing poker for money in California at the popular online poker websites is illegal, but in today's tolerant atmosphere the risk of being charged with a criminal misdemeanor is far less than the chance of getting a speeding ticket, and the actual penalty to befall anyone who is charged will be not much more serious than the speeding ticket. Professor Rose concludes his Card Player article saying: Does this mean regular players are in danger of being arrested? Half the states do have ancient laws on the book making it illegal to make a bet. But, probably 20 million Americans make technically forbidden wagers each year. With odds like that, you are more likely to be elected governor of California than charged with illegal gambling. End notes:[1] A wealth of information can be found on his Gambling and the Law website, which says that Professor I. Nelson Rose is recognized as one of the world's leading authorities on gambling law. He is an internationally known scholar, with more than 500 published works, and public speaker, often the keynote speaker on gambling issues. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law. [2] The question of the legality of offering a real-money poker game over the Internet to players in California is a still undecided question under California law. Trying to figure out how a court may rule is a different and quite complicated matter. It involves determining where the game is being offered and played as well as the ability to assert legal jurisdiction over the owner-operator of the website offering the game. Under Section 337j of the California Penal Code it is a misdemeanor to deal, operate, carry on, conduct, maintain, or expose for play in [California] any controlled game unless all required federal, state and local licenses have been obtained. Many local jurisdictions in California require licenses to be obtained in order to operate a cardroom in that jurisdiction. No online real-money poker website has a license from any California gaming authority. A 'controlled game' means any game of chance, including any gambling device, played for currency, check, credit, or any other thing of value that is not prohibited and made unlawful by statute or local ordinance.... [But] does not include any of the following: (A) The game of bingo conducted pursuant to Section 326.5. (B) Parimutuel racing on horse races regulated by the California Horse Racing Board. (C) Any lottery game conducted by the California State Lottery. [or] (D) Games played with cards in private homes or residences, in which no person makes money for operating the game, except as a player. Poker games that are not percentage games, and assuming further that they are games of chance, are lawful under Section 330, so the offering of such games is subject to the requirement of Section 337j. Of course, if the online poker game is a percentage game, then the offering of it would be unlawful directly under Section 330. Chuck Humphrey is available to help answer questions and analyze and structure transactions.Copyright © 2003-9 Chuck Humphrey, gambling-law-us.com. All Rights Reserved worldwide.May not be copied, stored or redistributed without prior written permission.
 
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LIMODANE55

WELL KNOWN MEMBER
My son tried to cash out 500.00 three weeks ago from pokerstars. he is NOT getting any responce from them other than checking in to it. He counld not understand why he was not getting his $. Now we know...........
 

sls616

WELL KNOWN MEMBER
I saw this on one of the cable news channels awhile back. I'm sure glad I just stick to playing slots!!
 

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