This is just a quick post a friend told me I should make to shed some light on the situation:
Quick Bio, I graduated from UT Austin with a general finance degree before getting my law degree from Georgetown. I worked as general in house council for probably the most infamous (clue: vampire squid) investment bank on the street during their tango with the Department of Justice last year. I think this situation is very similar.
I currently work for an energy fund in texas with a financial processing center located in the Caymans, mostly handling inflowing investment capital, so I also have a working knowledge of how these online poker sites handle their capital inflow.
I play poker casually on stars, one of my best friends plays poker for a living, so I have a dog in this fight.
That said, I have some general things to say:
1.) No company has ever survived an indictment by the DOJ. Ever. (I’m not talking about a criminal investigation, but actual charges – as in this situation)
2.) In this thread, a lot of people are implying that class actions suits or speaking with their representatives would help… Working with the DOJ in procuring information about my firm has convinced me of the contrary:
a.) the DOJ isn’t some “organization” you can pressure – they don’t really answer to the mass of voters because they aren’t elected.
b.) The DOJ isn’t an entity you can make fold or bring suit against. They will absolutely deflect opposing litigation – think sovereign immunity. I know it’s difficult to imagine that in our American democracy anyone who is above the law, but the DOJ can basically skirt constitutional law at will. They never proved our bank did anything “unlawful” but we still paid a $500 million fine. It was basically an excise tax on financial institutions and allowed the DOJ to not lose face. There was NO legal precedence for it. Which leads to my last point:
c.) No amount of connection will alleviate the situation (hence why convincing your representative is pointless). My firm was the most connected firm on the street. Many of our alum are working in high ranking positions in the government (they run the Treasury department). We still paid a fine.
3.) Processing inflowing capital has very stringent requirements – even if you’re located abroad. If the DOJ has made a formal indictment then you can be sure they HAVE a case. And even if they don’t there won’t be enough confidence left in either of the big 3 poker sites for players (from the States) to ever flock back (see: Arther Andersen). And even if the case falls flat Pokerstars/Tilt/etc will be forced into a settlement and you’ll be looking at a fine upwards $1 billion , USD.
4. you should attempt to withdrawal your money. I can only imagine some are recommending against it because they already have, and are afraid that because online poker sites don’t have “side pockets” that the effect will be similar to a “run on a bank.” While this is true, I’d urge you to try and withdrawal now.
The Department of Justice doesn’t lose – and in the rare instance that it do, they still raze the questionable firm to the ground.
Seek any recourse you can but get out now – whether it’s $500 or $50,000.
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