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Over $13 Million Settlement Reached Between U.S. Feds and Online Poker Payment Processor

19 August 2010 by Devon Chappell
Apparently the U.S. government wants to be "allied"

The US government wants to be allied

It’s getting to the point where I’m starting to find it difficult keeping up with all the money the U.S. federal government is seizing. Don’t get me wrong my fellow U.S. citizens and pro-online gamblers – I’m not saying the feds can just swoop in at any time and seize all of you online gambling funds. Okay, maybe they can. But the chances of it from happening are pretty slim. Besides, even if they were to commit such a rude act, you would still get your money back. That is, of course, if you were playing at a reputable site to begin with.

Anyhow, I preface this blog post with such an anecdote because – you guessed it – U.S. Federal officials have once again reached a big-money settlement for (lack of a better phrase) lost wages spent online gambling. Getting their greasy paws on some badly needed cash, the U.S. Attorney’s Office in Manhattan (who else), has successfully strong armed the payment processor, Allied Wallet and Allied Systems, into coughing up $13.3 million said to be deposited into a bank account between January and May of 2009.

More specifically, the funds were traced back to the “world’s largest online poker room”, Poker Stars, which everybody knows is open to doing business with U.S. online poker players. Said account was with Goldwater Bank in Scottsdale, Arizona, and was apparently tagged for receiving wire transfers from undisclosed offshore locations.

Poker Stars, which is legally regulated in the Isle of Man, has not been shy to broadcast they will continue doing business in the U.S. in accordance with legal counsel. In other words, Poker Stars maintains that no U.S. laws are being violated. Granted, they are on record stating, “PokerStars does not condone efforts by processors to conceal the nature or purpose of funds used to play online poker,” and that, “PokerStars has taken steps to ensure that processors properly disclose the nature of their business to their relevant financial institutions.”

Yes indeed, the guys who specialize in a game all about calling bluffs and checking opponents, know how to deal with the U.S. government. Interestingly enough, the feds haven’t directly gone after big operators the likes of Poker Stars, but have instead focused on where the money is – the payment processors. This was the case with the Neteller seizure, recently mirrored by the high profile settlement of $583 million with Canadian payment processor, Douglas Rennick (again, money traced to Poker Stars, as well as Full Tilt), and capped off with a sweet $13.3 million deal with Allied Wallet.

It’s been a pretty good run for U.S. authorities don’t you think? Of course, all this money is truly pocket change to the big players in the multi-billion dollar industry that online gambling is. While the likes of Neteller ran for the border and Allied will likely close up shop, it won’t be long before another payment processor opens an intricate web of accounts even better than Allied, and racks in billions before getting caught and forced to cough up a small dent compared to the real profit these companies are making. Of course, if the U.S. government opts to regulate, in which case they will be making exponential tax revenue compared to these little FBI raids, well, that’s another story.

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