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Old Apr 17, 2011, 7:45pm   #1
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Default The best part of this week's shuffle...

... has to be the part about what will happen to FT/Stars/etc.


Full Tilt/PokerStars already got rid of US players. Doesn't this mean the situation is pretty much cleared up for them?

Absolutely not. To the government, that is like a bank robber saying, "I stopped robbing banks, so you'll leave me alone right?" The situation is not over for PokerStars/Full Tilt (and AP/UB) until the case is settled, meaning the defendants and companies settle with the DOJ or the DOJ prosecutes, convicts, and they serve their sentence.



There's a great line that I think comes from an old western film (though I'm not sure), where they have a prisoner and there are calls to "hang him", but the reply comes "no, we shall have a fair trial first, and then we shall hang him".


I realize that the presumption of innocence has been all but forgotten in the age of CSI and Law & Order and all those other god-awful shows I can't watch because of how inaccurate their portrayal of the 'law' is. But seriously? We won't even entertain the possibility of innocence any more, even at the indictment stage, before a single shred of evidence has been presented?

Keep in mind this is the first prosecution on the law. Given how long it took to draft the regulations, and the definitions in the law could be challenged on the basis of overbreadth or ambiguity (e.g. not all financial transactions are made illegal, just the funding of gambling (or something to that effect), so does FT/Stars fall within that, or is a poker site w/o any casino operations not 'gambling' for the purposes of the law? Who knows until the law is applied in a trial) there is no certainty that a trial would result in conviction. Granted, the case looks bad based on what is in the indictment, but surely it isn't auto-convict if the sites chose to fight it.

Remember, (most) (unelected) (federal) judges still understand concepts like 'innocence' and 'proof' even if no one outside the legal profession (and not everyone inside it) knows the meaning of those words.



I think the most likely outcome of this whole thing is settlement in line with what Party did, though who knows this early on, because the DOJ may simply be trying to destroy FT/Stars to make way for Party and/or land-based casinos (which pay taxes and lobby/fund the politicians who ultimately pull the strings at DOJ, sadly). If that is the case, we can probably expect a trial or at least protracted proceedings designed to bankrupt the defendants (a common prosecutor tactic...) in some kind of regulated scheme. And some defendants might start rolling over on others, which may make trial more likely or settlement costs higher.


So while I think it is highly likely this will end in either settlement or conviction, isn't it a bit early to start fitting the noose? Many of the defendants haven't even been extradicted yet, and there hasn't been any disclosure of the prosecution's evidence to the defence - you guys still do that, right? I mean, after September 11th, you only got rid of the right to know the case against you if you're Muslim, right? It probably still applies to most/all of these defendants though.
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Oh, and obviously, TWLLM, we'd all rather you just ruled with an iron fist of nittiness and made all decisions without consultation, but that goes without saying, right?

Last edited by TWLLM; Apr 17, 2011 at 7:50pm.
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Old Apr 17, 2011, 7:48pm   #2
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Companies don't usually get off the hook after they're indicted by the DOJ. It's safe to operate under the assumption that Stars/Tilt will probably not be an exception to this. But if you think they will be, I'll lay you 50:1 that they get off completely clean without any type of settlement or conviction or anything (max bet $20).
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Old Apr 17, 2011, 7:56pm   #3
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Originally Posted by Ozone View Post
Companies don't usually get off the hook after they're indicted by the DOJ. It's safe to operate under the assumption that Stars/Tilt will probably not be an exception to this. But if you think they will be, I'll lay you 50:1 that they get off completely clean without any type of settlement or conviction or anything (max bet $20).
I agreed (and I think I said so in my message) that settlement or conviction are the most likely outcomes. And the DOJ might take it to trial and win on some things and not others. So no way would I be bettting money that NONE of the defendants will either plead or be found guilty on at least SOME of the charges. I'd never bet that given that some of the defendants will probably roll over on others and plead guilty to a slap on the wrist in the process.


I just don't believe we should ever start talking about there being two outcomes - guilty or guilty. That is incredibly scary, even if we're talking about companies.

After all, there were several named individuals who could be facing jail time. It would be odd if none of them were guilty but the company was, so simply branding the companies as guilty means you're condemning at least some of the personal defendants. I suppose a settlement where all the individuals are safe and only the companies pay is possible, but who knows if the DOJ even wants to settle at this point. They may be looking for blood.
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Oh, and obviously, TWLLM, we'd all rather you just ruled with an iron fist of nittiness and made all decisions without consultation, but that goes without saying, right?
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Old Apr 17, 2011, 8:18pm   #4
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I just don't believe we should ever start talking about there being two outcomes - guilty or guilty. That is incredibly scary, even if we're talking about companies.
Okay, just for you TWLLM:

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Old Apr 17, 2011, 11:51pm   #5
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Quote:
Originally Posted by TWLLM View Post
... has to be the part about what will happen to FT/Stars/etc.


Full Tilt/PokerStars already got rid of US players. Doesn't this mean the situation is pretty much cleared up for them?

Absolutely not. To the government, that is like a bank robber saying, "I stopped robbing banks, so you'll leave me alone right?" The situation is not over for PokerStars/Full Tilt (and AP/UB) until the case is settled, meaning the defendants and companies settle with the DOJ or the DOJ prosecutes, convicts, and they serve their sentence.



There's a great line that I think comes from an old western film (though I'm not sure), where they have a prisoner and there are calls to "hang him", but the reply comes "no, we shall have a fair trial first, and then we shall hang him".


I realize that the presumption of innocence has been all but forgotten in the age of CSI and Law & Order and all those other god-awful shows I can't watch because of how inaccurate their portrayal of the 'law' is. But seriously? We won't even entertain the possibility of innocence any more, even at the indictment stage, before a single shred of evidence has been presented?

Keep in mind this is the first prosecution on the law. Given how long it took to draft the regulations, and the definitions in the law could be challenged on the basis of overbreadth or ambiguity (e.g. not all financial transactions are made illegal, just the funding of gambling (or something to that effect), so does FT/Stars fall within that, or is a poker site w/o any casino operations not 'gambling' for the purposes of the law? Who knows until the law is applied in a trial) there is no certainty that a trial would result in conviction. Granted, the case looks bad based on what is in the indictment, but surely it isn't auto-convict if the sites chose to fight it.

Remember, (most) (unelected) (federal) judges still understand concepts like 'innocence' and 'proof' even if no one outside the legal profession (and not everyone inside it) knows the meaning of those words.



I think the most likely outcome of this whole thing is settlement in line with what Party did, though who knows this early on, because the DOJ may simply be trying to destroy FT/Stars to make way for Party and/or land-based casinos (which pay taxes and lobby/fund the politicians who ultimately pull the strings at DOJ, sadly). If that is the case, we can probably expect a trial or at least protracted proceedings designed to bankrupt the defendants (a common prosecutor tactic...) in some kind of regulated scheme. And some defendants might start rolling over on others, which may make trial more likely or settlement costs higher.


So while I think it is highly likely this will end in either settlement or conviction, isn't it a bit early to start fitting the noose? Many of the defendants haven't even been extradicted yet, and there hasn't been any disclosure of the prosecution's evidence to the defence - you guys still do that, right? I mean, after September 11th, you only got rid of the right to know the case against you if you're Muslim, right? It probably still applies to most/all of these defendants though.
Your point is well taken and we should have rephrased that sentence to put the possibility of a 'not guilty' verdict/no settlement at all in there. That being said, them going to trial and being found innocent is probably a 1/1000 chance at best.

Also, there is so much brainless optimism in the poker world right now, I figure that should counteract our more realistic pessimism
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Old Apr 18, 2011, 12:55am   #6
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There are five separate charges, and at least two of them require the prosecutors to prove that poker is illegal under the wire act. Maybe all five of them do, I can't really tell. It's certainly possible that this goes to a court that finds that the wire act doesn't apply to poker, and in that case, several of the charges will go away, possibly all of them.

The charges that are the least likely to depend on poker being illegal under the wire act are the ones about how the sites, banks and payment processors lied to cover up what the transactions were about. I have no doubt that it's illegal to lie about illegal transactions, but is it also illegal to lie about legal transactions? I don't know. If it is, then the people who have been arrested are almost certainly going away for at least a few years.

Quote:
Originally Posted by Ozone
Companies don't usually get off the hook after they're indicted by the DOJ. It's safe to operate under the assumption that Stars/Tilt will probably not be an exception to this. But if you think they will be, I'll lay you 50:1 that they get off completely clean without any type of settlement or conviction or anything (max bet $20).
The companies haven't been indicted. The DoJ have indicted 11 individuals, most of them founders of poker sites, and the rest bankers and payment processors.

Let's say that Ray Bitar (Full Tilt) goes for some kind of settlement. I don't believe that there's anything that would enable him to use company money to pay his fines. He can probably sell his shares in Pocket Kings and Filco, and use the money to pay the fine, but the DoJ can't touch the actual companies, since neither Ireland nor Alderney is in the USA.

Edit: Hm, I just found this in the press release:
Quote:
The Indictment and Civil Complaint seek at least $3 billion in civil money laundering penalties and forfeiture from the Poker Companies and the defendants.
It's interesting that they mention the "poker companies", and it makes me wonder if there's some significant piece of the puzzle that I haven't seen yet, but for now, I suspect that this is just wishful thinking. They're just saying that this is what they would like the poker companies to pay them, and the response from the companies is going to be a silent "yeah, right".

Last edited by Fredrik; Apr 18, 2011 at 1:06am.
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Old Apr 18, 2011, 12:56am   #7
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Your point is well taken and we should have rephrased that sentence to put the possibility of a 'not guilty' verdict/no settlement at all in there. That being said, them going to trial and being found innocent is probably a 1/1000 chance at best.

Also, there is so much brainless optimism in the poker world right now, I figure that should counteract our more realistic pessimism
Fair enough. It just pisses me off when people assume indicted = guilty. That's not how it works. Granted, an international DOJ investigation is much more likely to be based on reliable evidence and planning than a normal state prosecution, and therefore as you've both pointed out, it's more likely than the average prosecution to result in either a plea or a conviction (of some kind).

That said, most people are unaware of the fact that the VAST majority of potential prosecutions are 'settled' (who knows the exact figure for US DOJ prosecutions, but I've been told it would be over 90% for criminal prosecutions in Ontario, and I would imagine it's quite high elsewhere). "Settled" could mean a guilty plea and a deal, or some/all charges withdrawn (with or without a side deal/agreement to assist in some other prosecution), or it could be a stay of proceedings, etc. where everything goes away (with or without conditions).

The 'law and order' model we see on TV seems to have people convinced that only the guilty make deals (almost always to roll over on someone else), and that trials happen a lot, and very quickly. That, and the accused is always guilty (whether or not they're found guilty), and not just guilty of 'some' crime, guilty of everything they're charged with . You know, because no prosecutor would ever overcharge someone for strategic reasons. And that's clearly not what the DOJ did here with putting the $3 billion price tag on it, knowing full well that none of the defendants could ever possibly settle for that much.
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Oh, and obviously, TWLLM, we'd all rather you just ruled with an iron fist of nittiness and made all decisions without consultation, but that goes without saying, right?
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Old Apr 18, 2011, 1:07am   #8
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The companies haven't been indicted. The DoJ have indicted 11 individuals, most of them founders of poker sites, and the rest bankers and payment processors.

Let's say that Ray Bitar (Full Tilt) goes for some kind of settlement. I don't believe that there's anything that would enable him to use company money to pay his fines. He can probably sell his shares in Pocket Kings and Filco, and use the money to pay the fine, but the DoJ can't touch the actual companies, since neither Ireland nor Alderney is in the USA.
(1) The fact that the company 'full tilt' wasn't charged may just be a technicality having to do with jurisdiction (as you said) or corporate personality (e.g. are these the kinds of crimes that a corporate entity can commit? does the UIGEA or the Wire Act contemplate prosecutions of non-natural persons? etc.). The DOJ is probably going after individuals first because it's easier, but there's no way to rule out future prosecutions against corporate entities (at least, not without a very detailed reading of the laws and, probably, not without a relevant precedent). Plus, by prosecuting the individuals, DOJ can get the same effect (withdrawal from the US market) and they might get deals to set up future prosecutions (flipping a few of the principals of each company to then go after others). Who knows what will happen. But I would never assume they 'can't touch the actual companies'.

(2) The company could be required under contract to reimburse the individual defendants, and this might/might not be overridden by limitations on illegal behaviour in the contracts or in other laws that apply to the contracts. But it is far too simple to say that the companies won't have to reimburse their individual principals. They may well have to. And even if they don't have to, they may want to for strategic reasons (e.g. not wanting to force those individuals to roll over on others or on the company itself).
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Quote:
Originally Posted by DoubleU
Oh, and obviously, TWLLM, we'd all rather you just ruled with an iron fist of nittiness and made all decisions without consultation, but that goes without saying, right?
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Old Apr 18, 2011, 1:36am   #9
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The companies are most definitely listed under the civil complaint.
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Old Apr 18, 2011, 1:37am   #10
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And that's clearly not what the DOJ did here with putting the $3 billion price tag on it, knowing full well that none of the defendants could ever possibly settle for that much.
I'm not sure the DOJ is willing to settle for an amount that wouldn't put these places in bankruptcy and result in a sale to outside owners.

As far as settling, my money is PokerStars tries to pull a Neteller-like deal (not sure if the DOJ takes it), whereas FTP foolishly fights and loses.
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