Feds seize $34 million from online poker accounts

Jun 12, 2009 8:57 PM
Staff & Wire Reports | The U.S. government’s seizure of $34 million belonging to online poker players has outraged Internet advocacy groups, and provided more talking points for members of Congress who want to legalize online gambling.

The Poker Players Alliance, a poker lobbying group, said the seizure represented a violation of due process, and that the funds should be released immediately.

The $34 million in frozen funds reportedly belong to 27,000 online poker players in the U.S.

PPA estimated there are 10 million Americans who play online poker for money, spending about $6 billion a year.

The seizure was carried out by the U.S. attorney in the Southern District of New York. The U.S. attorney’s office declined to comment.

"It’s a big gamble by the Department of Justice," Prof. I. Nelson Rose, a senior professor at Whittier Law School and a leading expert on gambling law, told the Wall Street Journal, adding that the seizures could lead to a court ruling that actually supports Internet poker.

Previous efforts in Congress to legalize and regulate Internet gambling have failed because of opposition by conservative Republicans and others who worry it would encourage gambling, particularly among gambling addicts and minors.

Last month, Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, proposed legislation to legalize and regulate Internet gambling so revenues could be taxed and consumers would have some protections.

Frank and other legalization advocates argue that Internet gambling is a reality, and that consumers would be better off if there were some rules in place to require games to be run fairly and to require age verification of players.

"You’ve got an industry that already exists. You can’t shut it down," Jan Jones, vice president of government relations for Harrah’s Entertainment Inc., told the Wall Street Journal.

Harrah’s is one of several companies pushing Congress to legalize online gambling. Jones said the company would like to enter the business itself.