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Pay Per Head Outfits May Win Out Big In Wake Of Online Poker Indictments

Written by:
C Costigan
Published on:
Apr/19/2011

The “all clear” may not be there just yet but many in the online gambling sector feel somewhat at ease by the notion that the United States Justice Department has honed in on the big three online poker rooms and will spend much of the next few months preparing their case against Full Tilt Poker, PokerStars and UB.com.

More localized efforts are possible but few in the industry expect to see anything on the scale of what transpired on Friday.  There are, after all, no operations bigger than Full Tilt and PokerStars combined.  Even separately, these were forces to be reckoned with.

Organizations like the Poker Players Alliance have challenged the USJD in recent years, claiming online poker rooms had every right to operate legally in the US while shunning the “evil” sports betting businesses.  The United States Justice Department thought otherwise. 

Throughout the last few years of Internet poker prosecutions, US law enforcement agencies continued to go after the sports betting sector, but only indirectly as part of much broader investigations into organized crime syndicates.

The Pay Per Head sector continued to flourish throughout this period of time.  These businesses point out that they are not involved in cash transactions related to sports betting. 

“A lot of people are wondering if we will witness more of this (prosecutions) in the future but directed against the online sportsbooks,” a rep from PayPerHead.com said.  “The way things are turning out, websites like PayPerHead.com which cater to bookies have a brighter future because they’re not involved with the transfer or monies using banks. PayPerHead sites just lease software to bookies.”

For years, those in the sports betting sector have cringed at the PPA’s bold statements.

Those in the industry long before Full Tilt Poker and PokerStars even came into existence point to former US Attorney General Janet Reno’s conversation with a driver who was also employed by one of the sportsbooks operating in Costa Rica while she visited there (and obviously noticed all those gigantic satellite dishes that lined the landscape).

When asked, Ms. Reno relayed that the US Government had taken a stance that the Costa Rican online gambling industry could continue “as is” but “not to rub it in the faces of US law enforcement”. 

At the time, the Clinton Administration could easily have squashed the industry.  They elected to back off following a series of indictments in March of 1998.  Most of those individuals were given slaps on the wrists.  One had his passport revoked and was forced to wear an ankle bracelet while still operating a series of online casino sites out of Costa Rica.

- Christopher Costigan, Gambling911.com Publisher

 

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