The United States Department of Justice (DoJ) responded to Chad Elie's and John Campos' pretrial motions by filing a 52-page response denying all of the defendant's arguments. The two Black Friday indictees – Elie, who was a payment processor for the major online poker companies, and Campos, a Utah banker, were both charged with fraud and money laundering on April 15th, 2011, along with the founders and owners of PokerStars, Full Tilt Poker, and Absolute Poker online poker sites.
In October, 2011, Elie and Campos stepped up with counterarguments stating that online poker is not a gambling activity and that all of the charges against them should be dismissed. However, the DoJ was not willing to be pushed around and therefore filled a response to Elie's and Campos' arguments, stating there is more skill in sports betting than poker and “that the Court should deny the defendant’s motions to dismiss in their entirety.”
The response was filled by the U.S. Attorney Preet Bharara, through assistant U.S. Attorney Arlo Devlin-Brown stating that:
“Elie alone also contends that IGBA [Illegal Gambling Business Act] is unconstitutionally vague as applied here because it is charged with reference to New York law and because 'reasonable minds can differ' as to 'whether poker constitutes gambling' under the provisions of the New York Penal Law referred to in each of the IGBA counts charged in the Indictment. Elie IGBA Brf. at 27-30. Reasonable minds cannot.”
The document went on to state.
“First, defendants claim that in each of the listed games, the bettor has 'no role in, or control over, the outcome' and that the game is instead subject only to chance. That is not true with respect to bookmaking, at the very least. Betting on the outcome of sporting events involves 'substantial (not ‘slight’) skill,' including 'the exercise of [a] bettor’s judgment in trying to . . . figure [out] the point spreads.' Office of the Attorney General of the State of New York, Formal Opinion No. 84-F1, N.Y. Op. Atty. Gen 11 (1984). Sports bettors have every opportunity to employ superior knowledge of the games, teams and the players involved in order to exploit odds that do not reflect the true likelihoods of the possible outcomes. Indeed, academics who have argued that poker should not be treated as a form of illegal gambling on the grounds that it is a 'game of skill' make the same argument with respect to sports betting.”
Here are some more interesting points from Bharara's response to Elie's and Campos' arguments, stating that the defendants' appeal is false and that their motions should be rejected.
- ”The fact that there is, indisputably, some skill in poker is irrelevant given UIGEA’s application to any game ‘subject to chance.’”
- ”There can be no serious dispute that poker is both “subject to chance” and contrary to numerous state laws and, therefore, the defendants’ as applied challenge should again fail.”
- ”Contrary to the defendants’ arguments, there is nothing in UIGEA that reflects Congressional intent to exclude agents or employees of virtually any participant in financial networks who knowingly and intentionally facilitate illegal gambling transactions that violate UIGEA.”
- ”In light of the plain language of the statute, supported by its structure, defendants face a heavy burden in demonstrating that Congress intended UIGEA to specifically exclude poker from its ambit, particularly given that IGBA (which like UIGEA incorporates by reference state gambling law) had been consistently applied to poker gambling at the time the UIGEA was enacted.”
- ”The evidence will show that, despite losing millions on the SunFirst Processing, Full Tilt Poker and PokerStars encouraged Elie to make similar arrangements with similar kinds of banks. Full Tilt Poker, in fact, was growing desperate: given its illegal operation and desire for “transparent processing” it was left with virtually no access to the U.S. financial system at all.”
The Department of Justice's response attempts to discredit Elie's and Campos’ arguments and their effort to defend themselves by trying to prove that poker is in some respect a “game subject to chance” and therefore applicable to the Unlawful Internet Gambling Enforcement Act. The DoJ's response is also based on precedents which, according to the Department, should prove them right in Court. Although stating that sports betting requires more skill than poker may come as a shock to the poker community, the DoJ appears to be rather confident with their arguments. However, the outcome of the case is up to the Court which should decide which side's arguments are those of the 'reasonable minds.'