The Department of Justice seems to have no complaint about the current status of U.S. online gaming law, as it has been accumulating quite the bankroll from companies targeted on the shaky ground upon which their efforts are based. The latest score for the DoJ came through a settlement reached with Firepay, an online payment processing company that agreed to pay $19.2 million for supposedly violating federal laws.
It was only in the spring of 2009 that the U.S. Department of Justice settled its case with PartyGaming, in which the online gaming company agreed to plea guilty to accepting customers from the United States and to pay $105 million for the violation of the law. Despite having left the U.S. market in 2006 upon passage of the UIGEA, PartyGaming was a solid contender in the online gaming market in the U.S., and the company was targeted by the DoJ for violating laws such as the Wire Act. When one of PartyGaming’s founders, Anurag Dikshit, pled guilty in December of 2008 to violating the laws of the U.S. and agreed to pay a $300m fine, PartyGaming followed suit and agreed to virtually the same plea.
The most recent development in the online gaming prosecution attempts by the DoJ involves FirePay, an Optimal Group company that was one of the most popular payment processing companies between 2004 and 2006 as the online poker boom hit the U.S. The case began in 2007 when the DoJ seized the company’s assets and pursued it for violating federal law. As the U.S. Attorney’s office noted, “Optimal, operating an electronic wallet called FirePay, processed more than $2 billion worth of illegal gambling transactions for United States customers.”
FirePay agreed to plead guilty to the violations, specifically processing payments for internet gambling websites with a majority of customers in the U.S., and pay the U.S. government $19,182,418 in exchange for immunity from prosecution. Incidentally, prior forfeitures of FirePay cash on deposit by the DoJ equaled approximately $19.2 million, and FirePay thereby agreed to let the U.S. government keep it as the settlement amount. And according to a statement from Optimal, the payment stood for a “disgorgement of property involved in and proceeds received from the payment processing services that were provided by the company’s subsidiaries to internet gambling merchants in relation to U.S. customers of such merchants.”
It was the U.S. Attorney for the Southern District of New York who brought the case, claiming that some residents in that part of New York used the service. FirePay was accused of violating the 1961 Federal Wire Act and the 1970 Illegal Gambling Business Act, the latter of which was part of the Organized Crime Control Act.