Obama: Worse Than Bush on Bullshit Gambling Moralizing, Too

Friday, April 15th, 2011

The Obama Justice Department has indicted executives from the three largest online poker sites—Full Tilt, Absolute Poker, and PokerStars—on charges of money laundering and bank fraud.

This is the by far the most serious federal attack on online poker to date. I just checked my Full Tilt account. The site still appears to be up, but it isn’t accepting payments. Or at least it didn’t accept mine. The L.A. Times article linked above says Full Tilt’s website was down with an FBI seizure notice put up in its place. But as of this writing, it appears to be back up.

Good to know where the DOJ’s priorities lie. In this case, it’s preventing millions of people from consensually wagering money in online card games, an exchange that causes no harm to anyone else.

I predict this is going to prove to be a politically foolish move. Poker players are young, wealthy, and tend to be progressive on social issues. Reaction from the Poker Players Alliance here.

Reason on online gambling here.

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57 Responses to “Obama: Worse Than Bush on Bullshit Gambling Moralizing, Too”

  1. #1 |  omar | 

    “Bullshit” is exactly what this is.

    I had exactly the same reaction reading the news.

  2. #2 |  EricL | 

    Money laundering and fraud to:

    1. Allow consenting adults to play a game = Illegal; 11 indictments, seizure of millions (Payment processors are down for those sites), instantly putting thousands of people out of a job and many more a hobby

    2. Allow the banking industry to detonate the world economy = A-O-K; 0 prosecutions, hundreds of billions+ in free money given to the industry!

    P.S. “Free money” should read, “taxpayer money”

  3. #3 |  Mattocracy | 

    Maybe this will finally start getting more Democrats to abandone team blue and come to the dark with the rest of us.

  4. #4 |  pam | 

    yea, pick on the card players while the Wallstreet gamblers go free. Red, white or blue, we’re so on our own here….

  5. #5 |  Anonymo | 

    As I understand, what they’ve done w/r/t the web sites is to “seize” the domain names, not the actual servers, so if you can still access the web site in the U.S., it just means the DNS server you use hasn’t yet been updated to redirect you to the seizure notice; this should happen within a few hours. I just get the seizure notice.

    FTP and Pokerstars client software still works, they don’t use the domain names or have workarounds. Pokerstars has blocked Americans from playing real money games. FTP has not as of right now (curelly, I am having the best session I’ve had in a month). No one knows if/when they will do so or if the money in your account will be accessible — I hear reports that all withdrawal methods for U.S. players are not funtioning. Until I hear otherwise I’m assuming I’ll never see the >$1K in my FTP account ever again; luckily I only had like $2 on Stars.

  6. #6 |  SJE | 

    DOJ: How about you look at the hundreds of billions lost by the mainstream banks through suspect practices before enforcing your moral codes.

  7. #7 |  jdb | 

    How very coincidental that the FBI engages in an online poker crackdown a few days after Washington DC legalizes it as part of their “Lottery Modernization Act”

    http://www.forbes.com/feeds/ap/2011/04/12/entertainment-us-online-gambling-dc_8404984.html

    The government’s wiping out the competition.

  8. #8 |  Brandon | 

    Wonder how much is in all the accounts? And is it all subject to civil asset forfeiture?

  9. #9 |  gersan | 

    OFF TOPIC:

    I want to respond to something that “Charlie O” mentioned about the TSA further down on this blog. He said he will go through Canada next time he flies.

    Fantastic idea, Charlie. I’ll remember it.

  10. #10 |  asscore | 

    How quaint, you think democracy still works. The feds do whatever they want, they answer to no-one – especially the citizens.

  11. #11 |  Matthew Peck | 

    An aspect of the federal government’s takeovers that I find interesting: their take-over notices are images, not HTML. That is, the entirety of the take-over page is a single image, not a composite of text with official seal images. Why would this be? The HTTP response of the site request contains HTML; in this case, that HTML is nearly just a reference to the image which contains the seal images and the text of the notice. They could trivially serve the notice as simple HTML and link in the seal images. Why don’t they? Moreover, not only is the HTML not XHMTL-compliant (it contains no HEAD section), the image link is relative, making the image appear to come from the domain of the site, not the government. I haven’t thought through this, yet, but I will. I’ll update you via email, Radley.

  12. #12 |  BSK | 

    I’m better off not having access to online gambling. But shouldn’t I decide that for myself?

  13. #13 |  Brandon | 

    When are the gambling addicts going to show up to thank the overlords for saving everyone from themselves?

  14. #14 |  C. S. P. Schofield | 

    The reason that there haven’t been wise ranging investigations and prosecutions regarding the banking industry is simple; the political weasels in Washington are scared to death that if that particular pile of filthy laundry gets aired in public, the public might actually realize that the increasing irrationality and desperation of the Banking industry is a direct result of government intervention caused by the political weasels in Washington.

    The government told the lending industry; “We don’t care what the facts are. you will lend money to people who can’t pay you back, or else.”. Every bit of the recent skulduggery (well, maybe not EVERY bit, but certainly most) can be traced back to this idiocy. Since that little bit of “social justice” got foisted on the world, the banks have been like a waiter running to catch up with an out-of-balance stack of plates.

    Now, I’m not a great fan of banks. I’m not saying “awww, pooor babies”. But do remember that when this notion that the banks should be made to lend more money to “minorities” (read ‘people with no realistic chance of paying off the loan’), economists from both ends of the political spectrum wrote opinion pieces saying, in effect, “We hope you like bailing out lending institutions, because you are going to have to.”

    None of which has anything to do with the DOJ’s picking prosecution of internet gambling as the serving of “bread and circuses” du jour….. unless it does.

  15. #15 |  EricL | 

    FYI, Andrew Feldman of ESPN is reporting that within 48 hours all three indicted sites will be shut down, worldwide.

  16. #16 |  Brandon | 

    I’m going to miss the unrestrained comments when you go to HuffPo, Radley.

  17. #17 |  Anthony | 

    I guess I’ll have to start playing the Colorado lottery instead of poker. Its more moral because the state says so.

  18. #18 |  Gideon Darrow | 

    The house always wins.

  19. #19 |  Bernard | 

    I think most people always assumed this was a case of the US government and its gambling partners not getting their cut of the proceeds.

    A lot of people who thought that the analogy between the government and the mafia was a stretch are going to see it more clearly once online poker is legalised after these companies are too badly damaged to continue and a new set of well connected sites move in to fill the gap.

  20. #20 |  C. S. P. Schofield | 

    “A lot of people who thought that the analogy between the government and the mafia was a stretch are going to see it more clearly once online poker is legalised after these companies are too badly damaged to continue and a new set of well connected sites move in to fill the gap.”

    The difference between a Government and a criminal conspiracy has, historically speaking, usually boiled down to a matter of uniforms.

  21. #21 |  Aresen | 

    Considering the number of online gamblers out there (who belong to every party), I hope this creates an absolute political shitstorm.

    This is probably why the DOJ did this on Friday, hoping it would blow over by Monday.

  22. #22 |  bruce | 

    maybe i misunderstood your article radley, but were you trying to put money **into** a poker account when you knew the fbi was going after it? what could possibly go wrong with that?

  23. #23 |  Radley Balko | 

    maybe i misunderstood your article radley, but were you trying to put money **into** a poker account when you knew the fbi was going after it? what could possibly go wrong with that?

    I tried to put in $10 just to see if it the system was still working.

  24. #24 |  Lint | 

    Full Tilt is back down.

  25. #25 |  J.S. | 

    That article on DC legalizing online gambling was amusing as usual with the councilman quoted as hoping gambling income would help shore up social programs.

    I’ve grown to utterly hate state lotteries and their hypocrisy laden propaganda of “its for the children’s educations”. Typical turf wars but hey, nanny government knows whats best for you! Gambling is a-ok if state run/approved but you know the state should really really run healthcare too.

  26. #26 |  David Ruttenberg | 

    I’ve been rolling around on my couch giggling for ten minutes picturing Radley saying, “What could possibly go wrong with that?”

  27. #27 |  C. S. P. Schofield | 

    “nanny government knows whats best for you! Gambling is a-ok if state run/approved but you know the state should really really run healthcare too.”

    Oh, hell, no.

    Governments are good at brute force and bean-counting. They are bad at anything requiring subtlety. Want major roads driven through a large mountain chain? Send for the government. Want millions of letters and packages sorted and delivered? Governments actually do fairly well at this – better, in my personal experience, than private companies (I’ve had more problems, as a percentage of items sent by or to me, with Fedex and companies like Fedex, than I have with the Post Office). Got an outbreak of Fascism in Europe that you want to stomp flat? The government is the way to go.

    Run a brothel? The government has tried that and lost money. Ditto at least one porn shop that I know of. The various lotteries are nothing more than the old Numbers Game, and the government pays worse odds and makes less money than the Mob.

    I’m not against the government running a lot of things because of some socio-political theory. I’m against it because in my lifetime it has been tried, and does not work.

    I sometimes think that if we really WANTED to win the “War on drugs” we would put the government in charge of distribution and sales. Prices would skyrocket, and in ten years there wouldn’t be enough supply to get a squirrel high.

  28. #28 |  Stormy Dragon | 

    While I think Poker should be legal, the details here make it hard to really defend the poker sites. They set up a bunch of fake companies to report transfers as purchases for things like jewelry. When they’re making an deliberate and organized effort to misreport financial transactions, it’s seems a pretty straight forward application of the money laundering laws.

  29. #29 |  EH | 

    How quaint, you think democracy still works. The feds do whatever they want, they answer to no-one – especially the citizens.

    Is this the same kind of disillusionment that gave us yuppies?

  30. #30 |  qwints | 

    Allegations are not proof. The money laundering charges still have to be proven. The gambling charges under the UIGEA can be challenged on their face. Prepare for another round of the chance v. skill debate.

  31. #31 |  Stormy Dragon | 

    The gambling charges under the UIGEA can be challenged on their face. Prepare for another round of the chance v. skill debate.

    That’s the problem though: if the allegations in the article are accurate, then they won’t even need to charge them under the UIGEA. The poker sites went about this in such a clumsy way they’ll be able to get them on general money laundering and smuggling charges without have to really address what the money was being smuggled for.

  32. #32 |  BamBam | 

    @2: $220 million in Fed loans to WIVES of banking companies for their toy philanthropies; privatize the profits, socialize the losses is the Fed scheme, with an accomplice Congress

    http://www.lewrockwell.com/blog/lewrw/archives/85494.html

  33. #33 |  freedomfan | 

    By default, my assumption is that the story the government is telling is hyped to make the defendants look as bad as possible. The operating principle is that if they make the defendants look slimy, then people won’t be up in arms about the noxious nature of the law.

    FWIW, I really would much rather do without money laundering laws, period. Ditto for laws requiring that the government gets a report about financial transactions. Unless he chooses to reveal it, a person’s business should be his own, with zero presumptive ability of the government to monitor it without a court order. Does someone want to hide where he received or sent money? Fine. If someone is engaged in real criminal activity (meaning that he is harming or posing a clear and present threat of harm to some other nonconsenting party’s person or property), then the government can find evidence of that crime, not just that the accused was sneaking money around or that he violated some reporting requirement.

  34. #34 |  BamBam | 

    banking companies = banking execs

  35. #35 |  demize! | 

    “Is this the same kind of disillusionment that gave us yuppies”? No it’s the type that breeds Libertarians and Anarchists. The problem with yuppies is that they were far too illusioned. They loved the system, bought into whatever cultural narrative that was fed to them, and had not the capacity to deconstruct or be critical in any meaningful way. They’re still around in some iteration or another, I’m just not sure what to call them our culture being that much more debased since those dickheads were in the Zeitgeist.

  36. #36 |  scott | 

    I’m guessing this is the first major salvo in the .gov’s efforts to control the ‘Net. All the talk about “kill switches”, net-neutrality, etc. will be swept aside as the ruling class decides that the internet is too big to operate without complete federal oversight.

  37. #37 |  stevelaudig | 

    Gambling is so much worse than say torture errr I mean “enhanced interrogation”. Obama is a marathon of disappointments. Don’t listen to his speeches. Read them and discover what an empty suit the guy really is. He’s a con as Clinton was. Just not as squalid.

  38. #38 |  C. S. P. Schofield | 

    “Obama is a marathon of disappointments. Don’t listen to his speeches. Read them and discover what an empty suit the guy really is. He’s a con as Clinton was. Just not as squalid.”

    I can’t agree that Obama and Clinton are essentially similar. Obama is a void; an activist with little to no practical experience as an elected official. He has few ideas, and what ideas he has are impractical.

    Clinton was an experienced political hack. His elevations was the consequence of the Democrats romanticizing of JFK. Kennedy, viewed in the cold light of dawn, was a second rate political hack with nice hair, good teeth, and a first rate machine bought for him by his daddy. Driven by their rose colored memories of Kennedy, the Democrats stuck themselves with a THIRD rate political hack with nice hair, good teeth, and a first rate political machine he put together along with his charming barracuda of a wife. Clinton had about two-thirds of Kennedy’s charm, and one half his smarts. But, unlike Obama, Clinton was an experienced Player. He often had a tin ear for public opinion, and he had a tendency to be slightly too obviously motivated by momentary expediency, but he had the political experience to shuck-and-jive, or cut a deal, or otherwise move forward. All Obama knows how to do is sulk.

    Clinton was an experienced Political Player. He wasn’t a very good President – certainly not nearly as good as the Liberal Left likes to pretend – but he wasn’t a lump. Obama is a lump. He was chosen because he has no traceable past, and could be made into a Plaster Saint for the campaign. As President he is constantly in over his head. Moreover, perhaps because he believes his own press, he isn’t learning. His arrogance is breathtaking, especially for someone who is doing the job so badly. Clinton was a Player. Obama is a puppet.

  39. #39 |  Whim | 

    Indian casinos that have opaque odds-of-winning turn gamblers pockets inside-out every year, collecting $billions from people that shouldn’t be gambling in the first place.

    VERY high priced entertainment.

  40. #40 |  Salt | 

    So how much longer before we see SWAT raids to confiscate online poker player’s computers?

  41. #41 |  C. S. P. Schofield | 

    Whim,

    Millions of people spend the majority of their lives making themselves unhealthy and miserable. This does not make preventing them from doing themselves injury the job of Government, not least because historically Government has been lousy at every part of that job that it had tried to take on.

  42. #42 |  Z | 

    #6 and #32

    It has been explained by very serious people that a hard charging investigation into banking practices might have a negative impact on the bottom line of said banks and in America dear that sort of thing just isn’t done.

  43. #43 |  Leon Wolfeson | 

    Salt – The gambling itself isn’t in any way illegal, although you can kiss those account balances goodbye. Oh, and you need to properly report it on your tax return, of course.

    (Say, is “account balance seized by the feds” considered a “loss”?)

  44. #44 |  Salt | 

    @ #43 – I get you, But considering how Radley is so adept at shining light on how SWAT raids are used for anything, nothing surprises me anymore.

    Would anyone really be surprised to see nebulous accusations of racketeering co-conspirators?

    -I think they really just want to seize the cash and eliminate the competition-

  45. #45 |  tq | 

    “I predict this is going to prove to be a politically foolish move.”

    You mean Obama is in danger of losing your vote???

  46. #46 |  Black Market | 

    It makes perfect sense. When it involves banks, wall street, and the fate of the world economy, it’s “trading”. But if some young guy wants to play with his money online, it’s “gambling” and must be stopped.

  47. #47 |  Buddy Hinton | 

    It makes perfect sense. When it involves banks, wall street, and the fate of the world economy, it’s “trading”. But if some young guy wants to play with his money online, it’s “gambling” and must be stopped.

    I am basically sympathetic with Mr. Balko on this, and pls don’t take me wrong, but what is the good answer when someone asks: why not channel the gambling impulse into playing stocks?

    I mean, I get that the abstract answer is: bcs I should gamble in my chosen mode, but, as a practical matter, why not just play stocks?

    again, not trying to get anyone angry — just curious.

  48. #48 |  Kolohe | 

    why not just play stocks?

    Actually, when the 2006 law passed and most of the sites closed up US operations (including the one I was on), shortly thereafter, I opened an options account with my on-line broker.

  49. #49 |  supercat | 

    In formal gambling, the odds, payouts, and rules are established in advance. The house is given a numerical edge by the rules of the game, but in any legitimate venue, neither the house nor any other participant can alter the odds to be anything other than those established by the rules. In gambling games (not poker) all players play against the house, and cannot use any advantage–including skill–to the detriment of any other player. In a legitimate poker venue, players may use individual skill to their advantage, but no player will have any other advantage (e.g. ability to peek at opponent’s cards) which could be used to other player’s detriment.

    No such guarantee exists with financial markets. True, there are lapdog agencies which in theory will try to protect the markets from certain type of cheaters, but by and large the odds are really not well established, and certain players have distinct advantages which they can use to the detriment of everyone else.

  50. #50 |  Buddy Hinton | 

    Interesting, thanks for the answers guys. Other answers still appreciated, of course. I am not entirely sure I am convinced, but what you say makes sense.

  51. #51 |  Buddy Hinton | 

    O yeah, have any of you checked out the Steve Albini poker board thread circa summer 2006? Worth reading for indie music / poker fans and I can probably find the link if anybody is interested.

  52. #52 |  ThinkAnarchy | 

    I was so pissed off about this last night. I just deposited $75 into Full Tilt, seeing as I’m only an occasional online player. The money has still not been withdrawn from my checking account, and after inquiring about it, I was wondering why so many people on forums were saying their deposits were taking months to process. Now it makes perfect sense.

    By the way, thanks government. Harrahs doesn’t give me as much bonus money as online casino’s, nor can I buy into micro tournaments. Full Tilt also does not charge $5 every dealer change simply to sit at the table, plus the rake.

    The only positive I can see coming from this is that more people will consider anarchism, or at the least, libertarianism.

    If I had thousands of dollars in these accounts that are now frozen, or was simply relying on profits from online poker play, I’d likely go postal.

  53. #53 |  André | 

    How hard is it for Obama to realize that it’s none of the government’s fucking business what happens between two consenting adults?

    And as long as the government runs lotteries and collects taxes from brick-and-mortar casinos, they can suck it when it comes to arguing about “protecting compulsive gamblers”.

  54. #54 |  donttread | 

    Once again, a demonstration that having the Democrats in control of the Washington bureaucracy does not even get us the consolation prize of more respect for civil liberties. Republicans are a mixed bag ranging from very good to scary, but Democrats are through and through the party of state control.

  55. #55 |  JOR | 

    Well, whenever there’s Republicans in power you have some libertarians swearing up and down how awful the Republicans are, how we never actually get anything remotely like economic freedom from them, and how the Democrats are a mixed bag but the Republicans are the party of theocracy and etc., etc. Just, really.

    The mistake, as always, is to think that the Democrats or Republicans are really “about” anything other than opposing each other for nominal power. There’s no solid, fixed ideas or policies to either of them. They’re not even exactly tribal entities – rather they’re ever-shifting confederations of ever-changing tribal loyalties. None of this is to say that people who identify with one side or the other are never motivated by ideas or philosophical scruple (for better or worse), only that the sides themselves, broadly speaking, are not defined by such things. More importantly, which of the two is (rather nominally and very temporarily) in charge is not really a deciding factor in the direction the country moves in.

    Repeating once again, Democrats do not support “personal” or “civil” liberties, per se. And Republicans do not support “economic” liberties, per se. For that matter, their policies and goals don’t really fall on either side of other entirely artificial and intellectually futile distinctions libertarians are fond of – be it “individualism” versus “collectivism”, or “positive liberty” versus “negative liberty”, or “capitalism” versus “socialism”, or “public” versus “private” rights and interests, or whatever is being put forward as the Grand Unified Theory of Political Philosophy.

  56. #56 |  DarkEFang | 

    #47 Buddy Hinton –

    “I am basically sympathetic with Mr. Balko on this, and pls don’t take me wrong, but what is the good answer when someone asks: why not channel the gambling impulse into playing stocks?”

    I can play a mini-tournament for $5. I can’t even pay the fee for a stock transaction for that.

  57. #57 |  News Items: Internet Gambling and Agriculture | Cato @ Liberty | 

    […] a better stance on civil liberties from the Obama administration.  To quote my former colleague Radley Balko (language warning): “Good to know where the DOJ’s priorities lie. In this case, it’s […]

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