Is online poker a game of chance? Or is it a game of skill? The Australian Associated Press is reporting that the answer could determine whether 10 men, including the founders of online poker’s three largest companies – PokerStars, Full Tilt and Absolute Poker – beat charges brought by US government prosecutors following the arrest of suspected Australian whistleblower Daniel Tzvetkoff.
The 28-year-old one-time high-flyer on the Gold Coast, was arrested in Las Vegas in April last year for allegedly laundering more than $USD 500 million in internet gambling revenue and faced up to 75 years in a US federal prison.
But more than a year ago he vanished, raising speculation that he had turned informant for American authorities and was in an FBI witness protection program. In April, apparently following information supplied by Tzvetkoff, the FBI charged 11 men, including the founders of PokerStars, Isai Scheinberg and Paul Tate, Full Tilt Poker’s Ray Bitar and Nelson Burtnick, and Absolute Poker’s Scott Tom and Brent Beckley.
Two others caught in the law enforcement sweep – Utah banker John Campos and Las Vegas businessman Chad Elie – have asked a judge to dismiss the charges. In documents filed in the US District Court this week, Campos and Elie argued that The US’s Unlawful Internet Gambling Enforcement Act (UIGEA) was “unconstitutionally vague” and did not cover online poker, which is different to games of chance such as roulette and poker machines.
“Poker does not fall within the scope of the statute, as it is beyond dispute that poker is not a house-banked game, and it is similarly beyond dispute that poker involves a high degree of skill, and that the players have a high degree of control over the outcome of the game because they can induce their opponents to fold their hands by bluffing,” Elie’s lawyers argued in his motion to dismiss.
Elie, 31, charged with nine offences including conspiracy to violate the UIGEA and conspiring to commit bank fraud and money laundering, faces up to 85 years in prison if convicted.
Campos, a 57-year-old executive at Utah’s SunFirst Bank who allegedly agreed to process gambling transactions, is charged with six offences and faces 35 years’ jail. He argues that online poker is “qualitatively different” from other online games.
“First, online poker is not house-banked – the house does not participate at all, but instead merely collects a fee, or ‘rake’, for hosting the game,” Campos’ lawyers wrote in his motion to dismiss.
“Second, online poker is a game in which the outcome depends to at least some degree on the skill and decisions of the bettors. The players compete against each other on a level playing field, using an array of talents and skill, to prevail over their opponents.”
Prosecutors have picked up a guilty plea from one of the 11 men charged in April, with 41-year-old Bradley Franzen pleading guilty in May to bank fraud, money laundering and illegal gambling offences. Franzen operated a Costa Rica-based business that helped establish and maintain payment-processing channels with US banks for PokerStars, Full Tilt and Absolute Poker, authorities said.
Tzvetkoff, who was once estimated to be worth $AUD 82 million and paid $AUD 27 million for a home on the Gold Coast, spent four months in jails in Las Vegas and New York, but according to the US Federal Bureau of Prisons, he was released on August 23, 2010. The US Department of Justice has refused to comment on Tzvetkoff’s whereabouts.