Video credit score: Milko van Winden (manufacturing), Brad Whitehouse (manufacturing), Elliott Johnson (manufacturing & enhancing), Keith Becker (narration) & Connor Richards (script)
Poker suffered its darkest day in historical past on April 15, 2011 when the US authorities seized tons of of tens of millions of {dollars} in participant funds and shut down the most important on-line poker websites worldwide.
The incident, referred to as Black Friday, drastically modified the poker trade endlessly and led to tens of hundreds of gamers being put out of labor in a single day and compelled to search out different sources of revenue. Many left poker altogether and by no means returned.
Black Friday additionally revealed mismanagement of funds by the main poker website Full Tilt Poker and its executives Howard Lederer and Chris Ferguson, who on the time had been among the many most recognizable and revered faces in poker. It took a number of years for gamers to be paid again in full the cash that had been deposited on their accounts.
Greater than a decade later, the impacts of Black Friday are nonetheless felt by poker gamers worldwide. Poker’s reputation had been at an all-time excessive and patches of on-line poker corporations like PokerStars and Full Tilt Poker may very well be seen on gamers all over the place. It’s a a lot completely different panorama right now, with poker largely out of the mainstream, a lot fewer sponsorships and restricted televised protection.
In a brand new PokerNews video essay, we check out Black Friday, the darkest day in poker historical past that endlessly altered the net poker panorama and uncovered widespread mismanagement by a few of poker’s greatest names.
Full Tilt Poker Scandal: The Darkest Days in Poker Historical past
Lead-As much as Black Friday
Poker hit its peak in reputation through the Poker Growth of the early and mid-2000s. Following Chris Moneymaker’s iconic victory within the 2003 Primary Occasion, poker sponsorships had been going round like loopy and adverts for large on-line poker manufacturers like PokerStars and Full Tilt Poker couldn’t be averted. The Full Tilt roster presently included poker heavyweights like Phil Ivey, Tom Dwan, Mike Matusow, John Juanda, Gus Hansen, Jen Harman, Erik Seidel and Patrik Antonius.
Whereas poker was booming, a bit of laws was about to query the legality of on-line poker in america.
In 2006, the US federal authorities enacted the Illegal Web Playing Enforcement Act, or UIGEA, which prohibited playing companies from “knowingly accepting funds in reference to the participation of one other individual in a guess or wager that entails the usage of the Web and that’s illegal beneath any federal or state legislation.”
The UIGEA went into full impact in 2010 and didn’t exclude video games of ability like poker regardless of lobbying efforts from the Poker Gamers Alliance (PPA).
It was clear there was hassle brewing within the US on-line poker panorama, however websites continued to function and gamers continued to deposit.
“This Area Identify Has Been Seized”
On April 15, 2011, US poker gamers awoke to see a US Division of Justice emblem after they tried logging into their on-line poker accounts.
“This area identify has been seized by the FBI pursuant to an Arrest Warrent … obtained by america Lawyer’s Workplace,” the assertion learn partly, persevering with that “Conducting, financing, managing, supervising, directing, or proudly owning all or a part of an unlawful playing enterprise is a federal crime” and that “For individuals engaged within the enterprise of betting or wagering, additionally it is a federal crime to knowingly settle for (funds) in reference to the participation of one other individual in illegal Web playing.”
A federal indictment filed in opposition to PokerStars, Full Tilt Poker and Absolute Poker named 11 defendants, together with PokerStars government Isai Scheinberg, Full Tilt Poker’s Raymond Bitar and Nelson Burtnick; Absolute Poker’s Scott Tom and Brent Beckley and several other cost processors.
The impacts of Black Friday had been rapid. In a single day, hundreds of US poker gamers had been all of the sudden out of labor. Numerous poker gamers misplaced their sponsorships, together with Prahlad Friedman, Maria Ho and heavy steel guitarist Scott Ian of the band Anthrax.
On April twentieth, each Full Tilt Poker and PokerStars reached an settlement with the Division of Justice that allowed them to regain the usage of their dot-com websites to assist distribute participant funds.
However the cash at Full Tilt was gone. It was about to be revealed simply how dangerous issues had been over at Full Tilt.
10 Years After Black Friday: The place Poker’s Been and The place it is Going
Full Tilt Fallout
In September 2011, six months after Black Friday, it was revealed that Full Tilt Poker had paid out tens of tens of millions to its executives utilizing participant funds and didn’t have the cash to pay again gamers.
The US Lawyer’s Workplace amended its grievance to allege that Full Tilt Poker was a Ponzi scheme that Raymond Bitar, Howard Lederer, Chris Ferguson and Rafe Furst used to defraud gamers.
The grievance alleged that, as of March 2011, Full Tilt Poker owed roughly $390 million in participant funds all over the world, together with $150 million to US gamers. Nevertheless, Full Tilt solely had $60 million on deposit in its financial institution accounts, that means over $300 million was nonetheless owed to gamers worldwide.
The grievance additional alleged that between April 2007 and April 2011, Bitar, Lederer, Ferguson and Furst lined their very own pockets with roughly $443 million in gamers’ cash.
After a yr and a half of silence, Lederer spoke to PokerNews in a prolonged interview printed because the seven-part sequence The Lederer Recordsdata in 2012.
In 2012, PokerStars bought Full Tilt Poker, taking maintain of all Full Tilt belongings and agreeing to forfeit $547 million to the US authorities over three years.
However it could take a number of years for tens of millions of {dollars} to be paid again to Full Tilt gamers. Not realizing if they’d ever see the cash, many left poker and by no means returned.
Watch the Lederer Recordsdata Right here
The place Are We Now?
Whereas a couple of on-line poker executives served jail time, most acquired away with monetary penalties and what many thought-about to be a slap on the wrist.
Howard Lederer and Chris Ferguson of Full Tilt Poker are thought-about pariahs within the poker neighborhood to this present day, although Ferguson appeared on the 2017 World Collection of Poker and wound up successful the Participant of the 12 months distinction to the dismay of the neighborhood.
In March 2020, PokerStars founder Isai Scheinberg pleaded responsible to working an illegal web playing enterprise. Scheinberg averted jail time and needed to pay a fantastic of simply $30,000, bringing the Black Friday saga to a detailed practically a decade later.
So, what’s the state of on-line poker within the US? Black Friday supplied a chance for state-regulated on-line poker websites after a number of rulings that the Interstate Wire Act of 1961 didn’t apply to on-line poker. Nevada and Delaware each handed laws legalizing on-line poker in 2013 and different states adopted swimsuit over the following decade together with New Jersey, Pennsylvania, West Virginia and Michigan.
A number of states have launched on-line poker payments in recent times, together with New York, Maryland, Virginia and Massachusetts. In the meantime, states with legalized on-line poker have mixed participant swimming pools by the Multi-State Web Gaming Settlement (MSIGA), creating much-needed liquidity for US gamers.
On-line poker won’t ever be the identical within the US, and Black Friday stays a cautionary reminder of the devastating penalties of skirting authorities laws, ignoring warning indicators and improperly managing participant funds.
Pennsylvania Gaming Board Says Multi-State Poker is Simply Weeks Away
Connor Richards
Editor & Stay Reporter U.S.
