Online Poker Processor Did Not Stand a Chance Says Industry Expert

Allied Wallet, Inc. and Allied Systems, Inc. online poker payment processors, both owned by one Ahmad Khawaja, entered into a settlement agreement with the US Attorney’s Office out of New York whereby they will forfeit$13,335,248.91 to resolve civil forfeiture claims alleging that the funds are property involved in money laundering.

Gambling911.com received the news before any other news organization as per a decision made by the Honorable Judge Laura Taylor Swift following a suit by G911 parent company Costigan Media asking for full disclosure related to changes in an ongoing investigation by the US Attorney’s office related to online poker payment processors. 

“Allied did not stand a chance,” said one online gambling expert familiar with the integral workings of online poker from an operations position. 

It was just yesterday that Gambling911.com featured Part 1 of our exclusive interview with this individual, who asked for complete anonymity due to the precarious state of flux the industry is currently in.  He understands the inner workings of payment processing and how operators (including the owners of some of the world’s leading online poker sites) think.’  And it was during Part 1 of our interview, where he described the risk these payment processors were assuming.

We continue Part 2 of this exclusive interview.

JENNY: CEO of Harrah’s Interactive Entertainment, Mitch Garber - I had the opportunity to interview him last year and he wasn’t so forthcoming with his plans in regard to online gambling, and specifically online poker. It would be wise to assume that once the law is passed that Harrah’s could acquire or buy a site like PartyGaming and they would have the software needed. It sounds like that would be the smart way to go or would it be better to do it on his own?

INDUSTRY INSIDER:  Well I have said how much time it’s taken companies like PokerStars and Full Tilt to get to the position that they’re at currently. They’re always doing upgrades. They’re always adding things that players are asking for as far as the everyday person being at the table but I don’t think any company is prepared at the point here in the states to just say, “Alright we’re going to open up our own site” because if they do it isn’t going to be anything like the others. I don’t know if you go on TwoPlusTwo but about every thirty days there’s a guy that posts. His name is FTPDoug and he provides all of the updates that are happening in the FT updates. So he’ll say, “We’re going to add this stake. We’re going to remove this button.” They’re constantly improving and improving and improving and I don’t think to have any company start from scratch that they would even be anywhere close to providing things that people here in the states are so accustomed to. 

JENNY: What else would you tell the online gambling community in regard to the likely state of the industry should legislation pass?

INDUSTRY INSIDER: That the online wallets with all come back; as far as you having your own account. You can take your funds, put them onto the poker site, and pull them off the poker site. And then if you’re not happy with that site, you can then transfer the funds to anyone else.

JENNY: Obviously, some wallets are going to do better than others. Ex. Paypal and NETeller. Those will do better than others – right?  Especially having witnessed the latest settlement related to Allied Wallet, Inc. and Allied Systems, Inc.

INDUSTRY INSIDER: Well yeah. Everybody trusts Paypal. I would assume that a lot of people already have accounts anyway. I think Paypal is a very good structure as far as protecting information and all of that. The NETeller’s of the world, I can say that when they were at their peak – when they had their huge office and all these hundreds of people – it was so easy. It’s all about the ease of putting the funds on the account. Example - If I had an account with BetCris, I would probably try to use my card and it would get declined. I would then have to go to an ATM, pull out money, head to a store, put the funds out through Western Union to a person in Nicaragua, then it’s an hour until it gets done, and finally the cash is in the account. That’s just a pain in the ass. But if I could just do it online, do it through the Paypal – I would be so happy. It’s all about the player because the harder it is for the player, the less players will actually be on the site. For instance, with the Bodog issues, when everything happened with them in 2006 – it was so hard for a player to get on the site to play that they were like, “Okay fine. I’m going to head to another site.” It’s all about keeping things as easy as possible for the players.

JENNY: This might be a stupid and obvious question but – Do you see a lot of new wallets coming out trying to finagle their way in?  I would say “stupid” in the sense that we are discussing this issue in the midst of an active investigation by the US Attorney’s office. 

INDUSTRY INSIDER: Sure. I can’t tell you how many people here in the States throughout the last 8 to 10 years have wanted all the action. This is a huge industry and I think if the U.S. passes a law – I think there’s going to be a crap load of them.

JENNY: To the point where it’ll be chaotic?

Jenny Woo, Gambling911.com Senior International Correspondent