Exactly 10 years ago to the day, the poker world went into shock. On that date, the three major U.S. poker sites were shut down by the U.S. Department of Justice (DOJ) for illegal gambling, money laundering, and bank wire fraud. The day, forever known as “Black Friday,” was arguably the most devastating and costly day in poker history.
Back in 2011, online poker was booming. There were two wildly popular sites that spanned the globe — Full Tilt Poker and Poker Stars. And then another major network of sites, Cereus Poker Network, which owned Absolute Poker and Ultimate Bet. Then we had some other fairly popular smaller sites such as Doyle’s Room, founded by poker legend Doyle Brunson.
Fast forward 10 years later and PokerStars is the only poker site among that group still standing. It remains the most popular place to play poker in the world. But even PokerStars has a rocky history and is fortunate the events on April 15, 2011 didn’t crush the business.
What happened on that infamous day? The game of poker changed forever, but not in a good way. Worse, thousands of U.S. online poker players suffered severe financial problems as a result of the DOJ shutdown.
Questionable U.S. poker laws
In 2011, there were no licensed and regulated poker sites operating in the United States. That is because of the Federal Wire Act of 1961. The law made it illegal to accept gambling payments via wire communications. That meant poker sites couldn’t legally take payments, nor could banks accept gambling-related transactions. Thus, the internet poker sites operating in the U.S. at the time were doing so illegally. Coincidentally, however, the Wire Act would later pave way for legal online poker (more on this later).
But that didn’t stop the sites from accepting millions of American customers, and promoting their poker sites across the country. At the time, few poker players were very concerned with the safety and the security of their money. Online poker was booming, the games were soft, and many were making good money playing cards online. For some, it was the dream life. They didn’t have to get a job and could sit at home all day crushing donkeys on the internet. Many more money than their friends who were slaving away at a 9-5 job.
All good things must come to an end
On April 15, 2011, the cops busted the party. Online poker players all across the U.S. received a rude message when they attempted to log into their favorite poker site that day. The message informed them that the DOJ had seized the site and they could no longer access their accounts.
Top executives of the three major sites — PokerStars, Full Tilt Poker, and Absolute Poker/Ultimate Bet — were charged with bank wire fraud, illegal gambling, and money laundering. Full Tilt was accused of operating as a Ponzi scheme. FTP pro Tom “durrrr” Dwan, arguably the best online poker player in the world at the time, appeared on Fox Business in 2011 and denied those claims.
To be clear, Dwan had nothing to do with the scandal. He had a financial interest in the poker site, but was never accused of or charged with any crime. Two other popular poker pros, Chris Ferguson and Howard Lederer, however, served as executives for Full Tilt. Although they also were never charged, their reputations were forever tarnished.
Where’s our money?
When U.S. players discovered the rude message on April 15, 2011, they had no idea what to expect. Most felt it would be short-lived and they’d be back online crushing the games soon. But that didn’t turn out to be the case.
Full Tilt went from being the second most popular poker site in the world, behind PokerStars, to Public Enemy #1 of the poker community. When Black Friday hit, the site didn’t have available funds to pay back the American players who were no longer eligible to play. But they had plenty of money to send Ferguson, Lederer, and other execs nearly $100 million worth of bonuses. For that reason, Ferguson and Lederer have become hated members of the poker community. Some, including Daniel Negreanu, called for them to be permanently banned from poker rooms everywhere.
PokerStars was the first major site to make the U.S. player accounts whole. They did so a few months following Black Friday. But players on Full Tilt Poker, Ultimate Bet, and Absolute Poker, would have to wait what seemed like an eternity. For some, that caused serious financial strain, as they relied on that money to pay bills.
Forced to pay
For those who played the Cereus Poker Network sites, they were forced to wait many years before ever seeing a penny. But the Full Tilt players would finally get some positive news about 16 months following Black Friday.
In the summer of 2012, PokerStars acquired the rights to the Full Tilt Poker site. As part of PokerStars’ deal with the U.S. DOJ, the company was required to pay back all American FTP players by the end of the year.
But the players on Ultimate Bet and Absolute Poker were still left in the dust. And they would continue to go without their money until 2017. That’s when the U.S. government finally obtained a fund to ship to players of the Cereus Poker Network. That network was a mismanaged internet gambling company that never made any effort to pay the players back.
Better days ahead
Although Black Friday was devastating to the poker community and forever changed the game, it did lead to some positive action from U.S. lawmakers. In September 2011, the DOJ revisited the Federal Wire Act and provided a new opinion on the law. They stated that the law should only apply to sports betting and not other forms of internet gambling.
That paved the way for each individual state to determine the legality of online poker. But we’re now 10 years since Black Friday, and only five states currently have legal and licensed poker sites in operation. Michigan became the latest state to join that club earlier this year. On a positive note, that’s five more than in 2011. Baby steps.
Featured image source: Twitter