What was the biggest government operation against the online poker operators is now moving towards the first actual trial between the two sides. Although the issue of whether internet poker is in fact an illegal gambling business has been a big topic ever since the introduction of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, but it has never reached the courts. So when the US Department of Justice (DoJ) took action against the biggest online poker companies in April 2011 and indicted 11 online poker operators and payment processors, the chances of finally going to court highly increased.
The first government versus online poker trial should take off on March 12, 2012, and feature the two April 15 indictees Chad Elie and John Campos against the DoJ. Elie, a former payment processor, and Campos, a vice chairman of SunFirst Bank which processed online poker transactions for internet poker providers, were both indicted for money laundering via online poker sites and bank fraud and will now become the first ones to face the court for these actions.
Although back in October Elie and Campos filed motions of their own demanding all the charges be dismissed, U.S. District Judge Lewis Kaplan who presided over the case was skeptical about the defendants' arguments. “I think it's extraordinarily unlikely the entire indictment will be dismissed,” he said to Forbes after the hearing which took place on Thursday, December 1st.
Elie's and Campos' attorneys argued that the laws prohibiting the businesses of making money transfers for internet gambling companies do not apply in this case as poker is a game of skill and not of chance and therefore cannot be considered a gambling activity. However, the judge was not convinced and told the attorneys to expect a trial on March 12.
Not only was Judge Kaplan not impressed with the indictees' attorneys, he also did not hesitate to disagree with many of their arguments sending a clear message to the defendants – they will need to do their best and even more if they want to win this case.
Among those to defend Elie and Campos in Thursday's hearing was the former US Solicitor General Paul Clement. He spoke on behalf of Elie claiming that the online poker companies did not violate the Illegal Gambling Business Act (IGBA) of which the DoJ accused the indictees. He stated that the law did not apply to PokerStars and Full Tilt Poker as both were offshore companies and the law only concerned US-based businesses. “You really do need some clear intent from Congress to apply extraterritorially,” he argued. To this Kaplan replied that old laws evolve in ways Congress never originally intended. “Happens all the time,” he said.
On the other hand Judge Kaplan did not really challenge the Assistant US Attorney Arlo Devlin-Brown, representing the government in the hearing. The judge had even interrupted Assistant US Attorney’s explanation of the UIGEA charge declaring that “the whole point of the statute was to wipe out Internet gambling in the U.S.” Devlin-Brown rejected the argument that the online poker companies should be treated as offshore businesses as they had very clear interests in the United States which was also their main market and source of income. He also denied statements that IBGA does not apply to poker just because it is not on a “non-exhaustive list.”
Campos' and Elie's trial should take place on March 12, 2012, and become the first case where online poker faces the United States government in court. Of course, the fraud and money laundering charges do not make the task of those defending Elie and Campos any easier.