PokerStars Shut Down 2012

In a shocking turn of events, PokerStars and several other gambling websites were seized by the government DOJ on Friday, April 15th, 2011. PokerStars was shut down by the FBI on charges of bank fraud, money laundering, and several other serious felonies that could potentially lead to the PokerStars website being unavailable forever. The staff at MyPokerBasics has been tracking these developments very closely over the past seventy-two hours; here’s what really happened-


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The PokerStars Name

Almost everyone knows of the PokerStars brand; we see it on television, on billboards, and even at live WSOP events. The company has dozens of professional sponsors on various tours throughout the world and it was thought to be one of the most powerful names in poker…until they crossed the line with the US Government.

To build a company image this large, the owners of pokerstars.net relied on the mass appeal of professional poker to lure new customers to their website. At first, that simply meant clever billboard articles throughout cyberspace and the website saw almost immediate growth among the US population. It grew so fast, in fact, that the domain owners decided to take their poker tables national. PokerStars was one of the first gambling websites to ever advertise on US televisions and inside US magazines…and the United States government did not like that a bit.

The Unlawful Internet Gaming Enforcement Act (UIGEA)

In 2006, Congress was is session trying to pass the Safe Port Act…which was the legislation that made it illegal for foreign companies to own shipping ports within the United States. There was a fierce vote about the legality of such a law since there was no evidence that foreign owners were not complying to US standards when it came to security, and at one point it appeared that the act would fail.

To give a quick lesson on politics within the Senate and Congress, just because the elected officials do not support a law does not mean that it can not be passed. Instead of editing the bill to include terms that would be more favorable to everyone, Congressmen find it easier to simply include bribes within the legislation that will make their co-workers happy. One of those perks in the Safe Port Act was the UIGEA.

The UIGEA was a small piece of legislation that blocked financial institutions from moving money back and forth from online casinos. The idea was to cripple foreign gaming establishments so that they could not easily receive money from US players, but PokerStars and other websites saw a dozen or more different ways around the act within days of it being passed. Of course, the US did not want to make online poker illegal…they just wanted to slow it down until they figured out how to tax it.

PokerStars Shut Down by FBI Over Banking

Here’s where PokerStars allegedly went wrong though; the FBI says that they got a little too greedy for their own good. Instead of simply relying on credit card transactions to process or waiting on money wires and checks, PokerStars allegedly decided to invest heavily in the US banking sector. So heavily, in fact, that the government has accused that they were laundering money into the United States through the poker website.

Now, in their defense, it is not illegal for a foreign investor to own a bank or any type of investment group inside the United States. Heck, since they were advertising so heavily in the United States anyway and paying dozens of professional players to wear their logos on national television, some could argue that this move was necessary in order to pay their staff without any types of delays. PokerStars did not violate the UIGEA when they started making these acquisitions, but it is questionable whether or not they made these moves to be able to transfer money back and forth between their foreign poker accounts.

PokerStars Seized by Government DOJ

Under the UIGEA, the US government has the right to seize any website that violates the banking restrictions set forth within the document. It is unclear at this time whether or not PokerStars intentionally violated the UIGEA to bypass US laws, but in essence it really does not matter if it was planned or not. As long as the FBI and the US Government can show a single banking transaction that moved money directly from the PokerStars website to a US bank, they violated the law within the United States.

Of course, PokerStars denies that any of these charges are true…and they quite possible might not be. Like we said earlier, it is relatively common for foreign investors to buy up US assets in order to make long-term gains and the banking industry is certainly no exception. Under the laws of this nation PokerStars is innocent until proven guilty in a court of law, so there is a chance that someday soon they may return to the Internet.

What Happens Next for PokerStars

For now, the DOJ has absolutely no intention of releasing PokerStars back to the domain owners. Since this is an international affair that spans across many continents, any charges that are handled inside a court room make take years to settle. PokerStars, meanwhile, is stating that the seizure of their website is completely illegal and that the UIGEA does not even apply to a foreign business…but these are all matters for a courthouse as well.

It is unclear when PokerStars will return to the net, if ever, so the actual players are suddenly faced with the task of finding a new poker room to call home. MyPokerBasics recommends Sportsbook Poker since they are in full compliance with the UIGEA, but you’ll find many others to choose from on our website as well.

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