The feds may not be able to arrest people for gambling online (technically, it isn’t illegal), but it looks like they plan to make life pretty difficult for them. From the Wall Street Journal:

In an apparent crackdown on Internet gambling, federal authorities in New York have frozen or seized bank accounts worth $34 million belonging to 27,000 online poker players, according to representatives for the players and account holders.

In an operation that began last week, the office of the U.S. Attorney for the Southern District of New York froze or issued seizure orders for bank accounts in Los Angeles, San Francisco and Arizona held at Wells Fargo, Citibank, Goldwater Bank and Alliance Bank of Arizona.

A spokeswoman for the U.S. attorney’s office had no comment.

The accounts are managed by Allied Systems Inc., and Account Services, which handle cash for popular online poker sites, including Full Tilt Poker, Poker Stars, Ultimate Bet and Absolute Poker. Though the money belongs to the poker players, it is held for them in accounts managed by the two service companies.

Account Services, which had an account worth $15 million frozen in its San Francisco bank, doesn’t accept deposits, but writes checks to players who are cashing out, said lawyer for the company, Jeff Ifrah. As a result, thousands of players receiving checks from the company won’t be able to cash them, he said.

In the last week, the major poker sites have also shut down some of the main mechanisms for U.S. players to make deposits.

(Via Sallie James)

Earlier today, I linked to a story about a charity poker game in Maine raided by the state police. The police seized $500 that would have otherwise gone toward stocking a food co-op.

Here’s part of an email from an Agitator reader who wishes to remain anonymous:

I went to the TV station’s web-site and viewed the video report. How ridiculous have our federal and local government agencies become?

Well long story short, I called Mrs. Groder and let her know I am going to mail her a $500.00 check on Monday. I also called the TV station to tell them my intentions. I’m not looking for any PR out of this donation . . . I just want them to know at least someone cares a little bit about freedom and liberty.. and that both go hand in hand with volunteer charity.

Rep. Barney Frank’s (D-Mass.) online gambling bill appears to be gaining some momentum.

It’s unfortunate that it takes the promise of tax revenue for the federal government to respect individual freedom. But I suppose that’s the reality of things.

Rep. Bob Goodlatte’s (R-Horseracing) quote in the article is bizarre. Somehow, we shouldn’t legalize Internet gambling because . . . Tim Geithner didn’t pay his taxes. Sure, Bob. When I debated Goodlatte about online gambling on CNBC a few years ago, he weirdly tried to tie the issue to Jack Abramoff (weird because Goodlatte and the GOP leadership ended up passing the very bill Abramoff lobbied for).

The guy pretty obviously knows he has a losing argument. Which is why he’d rather invoke bogeymen and lame partisan zingers than actually discuss the issue.

Aim your browsers here in an hour for a chat with poker superstars Howard Lederer and Andy Bloch. They’ll be here primarily to discuss the bill sponsored by Rep. Barney Frank (D-Mass.) that would legalize and regulate online poker and online gambling. But feel free to inquire about poker policy in general, including the raids on neighborhood games we’ve discussed here, the history and culture of the game, and whatever else tickles your fancy. Because we’ll only have them for an hour, however, I doubt they’ll be answering much in the way of tips on strategy, etc.

Andy Bloch is one of the guys who beat the Vegas casinos at blackjack, providing the inspiration for the recent movie 21. He has won over $4 million playing professional poker. He’s one of the sponsoring pros at the poker website Full Tilt Poker, where he donates all of the money he wins on low limit games to charity. Read more about Bloch at his website (or follow his Twitter feed).

Howard Lederer has two World Series of Poker gold bracelets and has finished in the money at the event 38 times. He’s probably one of the most well-known faces of the game. Wikipedia puts his lifetime live winnings at $4.8 million. Lederer is a co-founder of Full Tilt and on the board of directors of the Poker Players Alliance, the lobbying group that’s trying to get the online game legalized. Read more about Howard here.

PPA also helped set up this chat.

Cato’s Sallie James reports that U.K.-based PartyGaming has settled with the U.S. Department of Justice. For a $105 million “fee,” DOJ will drop its case against the site for allowing U.S. users to gamble online prior to the passage of the 2006 Unlawful Internet Gaming Enforcement Act.

James calls this “semi-good news.” I’m having a hard time conjuring even that much optimism. A foreign company and its executives, operating out of a country where everything the company was doing was legal, was being prosecuted in the U.S. for violating an ambiguous law the Justice Department was using to  paternalistically prohibit Americans from consensually wagering online. Now in exchange for agreeing to stop doing business with Americans and paying a $105 million fine, the U.S. government has graciously agreed not to throw the company’s executives in prison.

Whether you’re scoring in terms of individual freedom, free trade, common sense, or the rule of law, it seems like a net loss all around to me.

A jury in Colorado has acquitted a man who organized poker tournaments at a local bar on charges of illegal gambling, apparently agreeing with his defense that poker is primarily a game of skill, not chance.  Last month, a judge in Pennsylvania came to the same conclusion, exonerating a man of gambling charges for running $1-$2 Texas Hold ‘Em games out of his garage.

I’d rather see states do away with gambling prohibitions altogether (or, more accurately, to lift the states’ monopoly on gambling), but the outcomes in these cases are exactly right. The fact that professional poker players even exist (as opposed to, say, professional slots or roulette players) is proof that the game is driven more by strategy and skill than by luck.

This month, another state judge in South Carolina will rule on the same question. In that case, Police sent a wired informant with marked bills to break up the $20 buy-in game run by Mount Pleasant resident Bob Chimento and his college buddies. Generally speaking, such games are legal so long as the host doesn’t take a cut of the prize money. Police and prosecutors determined that Chimento’s collection for pizza and beer qualified as a "rake," making the game illegal.

"The typical police raid of these games … is to literally burst into a home in SWAT gear with guns drawn and treat poker players like a bunch of high-level drug dealers," says Jeff Phillips, a Greenville attorney representing Chimento’s group. "Using the taxpayers’ resources for such useless Gestapo-like tactics is more of a crime than is playing of the game."

Chimento and his friends aren’t alone. The Washington-based Poker Players Alliance says it has received so many calls about poker-related arrests that it’s created a national network of attorneys - many of them poker players themselves - to serve as a legal brain trust for its membership.

Reason.tv and Drew Carey highlighted one of those cases last year, in which a paramilitary vice squad in Dallas raided a Texas Hold ‘Em tournament held at local VFW post.

Over at the poker forum Two Plus Two, pro poker player David Peat writes that he was essentially mugged by DEA agents at an airport in Toledo, Ohio Detroit, Michigan.

According to Peat, he and his girlfriend had originally planned to fly back to Las Vegas together after visiting her family. But after purchasing their tickets, Peat decided to fly to L.A. to play in a poker game. He bought a last minute, first-class ticket, and paid in cash.  That apparently was enough to set off red flags.

Peat says he was accosted by several DEA agents, who asked him questions about who he was and where he was going. He told them he was a poker player, and had $15,000 in cash in his pocket. They first let him go, but then chased him down, and told him he’d need to come with them for questioning. Peat says the agents then confiscated all of his money, as well as his $50,000 Rolex watch. He says they gave him a receipt, and told him to expect more information in the mail.

In a separate post, Peat concedes he had a few marijuana possession charges, but the most recent was more than eight years ago. He wasn’t arrested, and the agents didn’t tell him why they were taking his money. The reason for seizing it seems to be little more than he was traveling with a large amount of cash.

If Peat’s account of the incident is accurate, it certainly wouldn’t be unprecedented.

CORRECTION: I spoke with Peat tonight. He was staying in Toledo, but he flew out of Detroit. More later.