Though the government wiped out the major American sites, a few remain, most notably Bovada and Merge Gaming Network.

The volume is much lower, and it's difficult to get paid. All sites have severe restrictions on how much and how often players can withdraw money from their accounts. Merge allows players to take out only up to $2,500 once every six to eight weeks. And many players find it difficult to add money to their accounts because credit card companies often reject the transactions.

After Black Friday, players such as Walter Wright began gambling on Merge just to salve nerves made raw by an empty wallet and a squealing baby. Wright had been an online-poker superstar, winning more than $100,000 a year at his peak. When Black Friday hit, he was stuck in North Carolina, out of a job, living with his in-laws, and with no way to provide for a family of four.

Maxwell Fritz made hundreds of thousands gambling online.
Will Rice for Eight One Seven Photography
Maxwell Fritz made hundreds of thousands gambling online.
Black Friday nearly finished Michael  Minkoff.
Bill Hughes
Black Friday nearly finished Michael Minkoff.

He and his wife went to Florida for a live World Poker Tour event, but he didn't play well. When they returned to North Carolina, they didn't even have enough money to get their dogs out of the kennel.

With their marriage stretched to its breaking point, Wright went to Costa Rica just before Thanksgiving. A friend agreed to front him a roll of cash, pay his airfare, and cover his rent for a few months.

Costa Rica has become a magnet for Americans. Wright lives in an apartment complex with other online players. The country's tourist-friendly economy makes it a logical landing spot for those like Wright. Since Black Friday, companies such as Poker Refugees have sprung up to help players obtain visas, bank accounts, and apartments in Costa Rica.

But a larger question remains: Why are the feds chasing honest, taxpaying citizens out of the country?

Congressman Frank denounced the crackdown as an "incredible waste of resources," wondering why the feds felt compelled to protect "the public from the scourge of inside straights."

After all, for most of the nation's estimated 2 million online players, poker is little more than leisure recreation. And those who made their living from it seemed to personify the American spirit, providing for families by creating livelihoods from their wits.

There's also the question of why conservatives such as Frist and Kyl would push a law so lush with the dreaded nanny-state overtones. Frist declined to comment about his motives. Kyl didn't respond to repeated interview requests.

Most players cynically dismiss the senators' move as a strong-arm play. The feds want their protection money — i.e., taxes — and won't let the ride continue until someone pays up. But because government moves in slow motion, it has left a multibillion-dollar industry to rot from atrophy. Any remedy will likely take years.

"It's really frustrating to me," LaTour says. "It just seems they weren't seeing any of that money that was going out there so they want to set it up so they can tax it. But the longer this takes, the more there will be people like me who just give up on it and move on with our lives to find another way of making a living. I've pretty much stopped waiting around."

A solution seems rather simple. Because everything is handled electronically, internet poker offers the possibility of instant taxation of winnings. And the feds could easily force sites operating in the U.S. to pay American taxes for the privilege of doing business here.

Yet the average poker enthusiast doesn't employ a battery of lobbyists on Capitol Hill. And even if he did, he'd still be confronted by the moralists who believe any form of gambling is a sin.

"We're a pretty small minority," Wright says. "We don't have a big voice. We need to be louder. But we're talking American politics. We know it's going to take longer than it should, they're going to find a way to screw people, and they're probably going to make the taxing situation really complicated."


Within a month of the federal crackdown, PokerStars returned $100 million to U.S. players and continued to operate abroad. Barros, like other PokerStars players, was given back the several hundred dollars that was frozen in her account on Black Friday.

Full Tilt players weren't so lucky. The company was cleared to offer returns but never did, because it doesn't have the money. Dozens of serious players in South Florida lost thousands in the Full Tilt crackdown, says Lou Stadler, president of the Miami Poker Society.

This past September, the feds accused owners Howard Lederer and Chris "Jesus" Ferguson of running a "global Ponzi scheme."

"Banks fail for not having sufficient revenue to cover customer deposits all the time," the company's lawyer, Jeff Ifrah, said at the time. "No one refers to such failures as Ponzi schemes. And there was no Ponzi scheme here." The court battle rages on.

This fall, a French company, Group Bernard Tapie, stepped in to buy Full Tilt for $80 million, promising to pay off the debts to international players. The feds are working to ensure that Full Tilt pays back American players. They've announced no timetable for repayment.

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13 comments
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Deman
Deman

Walter "Deadbeat Dad" Wright is a pussy!

online blackjack
online blackjack

Online Poker game has faces so many assault and that's why many people in trouble to join this great online gambling or not. This is the serious matter for the player.

7NT
7NT

Once the Wire Act was clarified ( and it seemed like the ruling was delayed?), maybe there was some culpability?

Dover Pro
Dover Pro

Online poker is a game of skill, as this article indicates, and it should be the right of anyone who chooses to play to do so. The PPA (http://theppa.org) is fighting to regulate and legalize US poker, check out their site for more information.

US Players have been continously victimized by shady operators, cheating scandals, poker action flops, faulty software, simple outright fraudulent sites, and payment processors being shut down.

It has been estimated that regulated legal online poker would produce up to 3 Billion Dollars in tax revenues VOLUNTARILY from players who would welcome protection. Legalized, trustworthy sites would automatically attract players from around the world creating a new American industry and thousands of USA jobs.

Sheryl J
Sheryl J

Thanks for this informative article about online poker and what the government did to it.  An entire industry was destroyed last year.  This is the first article that really illustrates the situation.  We need federal legislation that licenses and regulates online poker in the U.S. and brings back an industry.

Oh, and @rudedude, you're wrong.  Playing online poker is not, and has not been, explicitly illegal except in a couple of states.

Gary R. Reed
Gary R. Reed

Poker is a game of skill. For the Feds (or anyone else) who thinks it's just dumb luck like casino games or horse racing, sit down at a poker table with an accomplished player and play for a few hours. Let's see if you can get lucky. You won't. Oh you may win a hand or two. You might even come out ahead after an hour or two. Play long enough and skill will take all of your money. Bank it. That, if truth be known, is why the current administration hates the game. They want government to control you from the time you wake up until you go to sleep. To have something that they can't control, or even understand, is intolerable to them. 

FQS9000
FQS9000

Duh, the Fed are seizing assets.  They get to keep the cash.  That makes them look great to the other bureaucrats who promote them into better paying jobs.  The prosecutors are attacking because it is easy to get convictions, as these guys aren't hardened criminals.

Any time congress or ObammaBoy want to stop this they can, but it is in their narrow interests to continue.  So they will.

Term limits, guys.  Kick the pigs away from the trough.

Occultist1521
Occultist1521

It needs to be more massive than term limits like maybe just abandoning the current system in favor of another government with more democracy and less partisan bullsh*t. This current crap system shuttered everything not to keep the cash but to keep the cash out of your pocket. They collapsed the financial markets, and are now driving the dollar down by causing hyperinflation by printing money on top of money. No one you elect or reelect will change that. Wash. D.C. as the fed and state gov't. will NOT stop until everyone and I mean everyone (except themselves of course) has lost their home, job and is living on welfare. That way we become like Cuba dependant on Big Brothers hand outs so we can't and won't say anything against them for fear of losing our slice of bread.

rudedude
rudedude

Hello!  its ALWAYS been ILLEGAL! 

just because you got away with it for so long...

-not unlike internet taxes.  the day is coming... don't be shocked.

JustMe
JustMe

No it hasn't. If you had read the article you'd see even the DOJ is no longer making that claim.

Gail S.
Gail S.

Thank you for this article!  Great background and good information on what has led up to our current situation here in the US and where we are now.  It's way past time for the US to move forward with regulating the online poker industry. 

Sheryl J
Sheryl J

Thanks for this informative article about online #poker.  I hope other media will do the same.  We need federal licensing and regulation, like H.R.2366.

 
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