Casino industry representatives and exhibitors watch an online poker game during industry's G2E conference, Tuesday, Oct. 4, 2011, in Las Vegas. The commercial casino industry wants Congress to drop proposals already on the table for regulating the estimated $6 billion online poker industry and pass new legislation that would let states decide whether to allow online gambling and require online casino companies to be licensed.
WASHINGTON -- The U.S. attorney for the Southern District of New York reached an agreement with two of the world's largest poker companies on Tuesday for them to forfeit more than half a billion dollars, some of which will be used to reimburse players who gambled online.
In pursuing the settlement, the Justice Department had two goals: protecting online gamblers and acting swiftly to punish foreign companies that allow Americans to place wagers. (It is legal under U.S. law for an American to place a bet regardless of whether the casino or bet taker is legally registered to operate.)
According to court documents released Tuesday, the companies had taken money from the accounts of the bettors and distributed it to the companies' owners despite telling the bettors that they could withdraw their money at any time. The documents did not say whether any bettors had been prevented from withdrawing their money.
As part of the agreement, one of the online companies, PokerStars, which is based in the Isle of Man, will forfeit $547 million to the U.S. government, and the company will acquire the other one, Full Tilt Poker, which is based in Dublin. Roughly $184 million from Full Tilt Poker will also be forfeited to the government. It is not clear how much of the forfeiture money will end up in the hands of gamblers.
The head of the FBI office in New York, Janice Fedarcyk, said in a statement that the settlement would allow "for serious compensation of victims" and that the case "should serve as a deterrent to others who look to actively circumvent United States law -- onshore or offshore."
"This is another shoe dropping in a longstanding effort by the federal government to try and freeze these companies out of the American market," said Daniel Richman, a professor of law at Columbia University and a former federal prosecutor. "As some state governments reconsider their gambling laws, we may see more of these cases against foreign gambling companies."