Impact of Black Friday in 2011 and Beyond

2011 will definitely be a year to remember for the online gambling world, but unfortunately more for negative reasons than positive ones. The US Department of Justice unleashed indictments and domain seizures on Friday, April 15 (aka Black Friday) for online sites including Full Tilt and PokerStars, with the reverberations still being felt in the online world.

PokerStars continued on largely unfazed (and is still the world’s largest online poker site by a wide margin) but Full Tilt would ultimately implode and shutter its online doors. The passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006 paved the way for Black Friday, with the UIGEA making it illegal for US banks to knowingly do business with online gambling sites. Some sites exited the US market and obeyed it but others stayed, suffering no real consequences until the Department of Justice made its move on Black Friday.

While it’s not illegal for US citizens to play poker or video poker online, the laws attempted to cut off the games at their funding source. Facing difficulties in processing deposits to their sites, Full Tilt and PokerStars resorted to a variety of creative methods to process transactions, including investing in US banks and coding credit card transactions as mainstream purchases of goods and services. Various executives and shareholders of Full Tilt are also being pursued in civil cases, with the US government publicly accusing them of running a Ponzi scheme.

The net result has been that poker fans ended up with far fewer choices of online sites to play at while Full Tilt customers are still waiting for refunds of the money they had on deposit, with an estimated $150 million in total owed to US players. Attendance at the 2011 World Series of Poker was strong despite the absence of online qualifiers from many sites but some analysts feel the real impact of Black Friday will be felt in 2012, with the poker economy suffering without the usual steady influx of money entering it as in years past.

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