Black Friday

Black Friday is the phrase used by the online poker industry to describe the day indictments were unsealed against PokerStars, Full Tilt Poker, and Absolute Poker.  The date was April 15, 2011.  The U.S. Attorney’s Office in the Southern District of New York was the arm of the U.S. Department of Justice that brought the case.  This was the first time the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) was used in an indictment.

There were a total of 11 individuals indicted on Black Friday.  These included online poker room management and payment processors.

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Individuals and Charges from Black Friday

  • Conspiracy to Violate UIGEA: Isai Scheinberg, Raymond Bitar, Scott Tom, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, Chad Elie and John Campos
  • Violation of UIGEA: Isai Scheinberg, Raymond Bitar, Scott Tom, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, Chad Elie and John Campos
  • Operation of Illegal Gambling Business: Isai Scheinberg, Raymond Bitar, Scott Tom, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, Chad Elie and John Campos
  • Bank and Wire Fraud: Raymond Bitar, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, and Chad Elie
  • Money Laundering Conspiracy: Isai Scheinberg, Raymond Bitar, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, Chad Elie and John Campos

A Look at Black Friday Defendants and Status as of July 2014

  • Isai Scheinberg: Founder of Pokerstars, case still open
  • Paul Tate: Director of Payments for PokerStars, case still open
  • Raymond Bitar: CEO of Full Tilt Poker parent company, pleaded guilty after his health deteriorated. He served seven days in prison and forfeited over $40 million in assets.
  • Nelson Burtnick: Director of Payments for Full Tilt. Previously held similar position at PokerStars. He pleaded guilty and received prison time.
  • Scott Tom: Cofounder of Absolute Poker, pleaded guilty to single misdemeanor in 2017.
  • Brent Beckley: Director of Payments at Absolute Poker. Pleaded guilty and was sentence to 12-18 months in prison.
  • Ryan Lang: Payment processor that pleaded guilty.
  • Ira Rubin: Payment processor that pleaded guilty and was sentenced to three years in prison.
  • Bradley Franzen: Pleaded guilty to money laundering charges.
  • Chad Elie: Pleaded guilty and served five months in prison.
  • John Campos: Part owner of SunFirst Bank in Utah. This bank helped process payments for PokerStars and Full Tilt Poker. He was sentenced to three months in prison.

Effects of Black Friday

PokerStars

PokerStars left the U.S. market hours after the indictment was unsealed.  It was able to repay players within two weeks of Black Friday.  PokerStars was the number one online poker site at the time.  It remains in the top spot today, even without Americans on the site.

PokerStars settled with the U.S. Government for $731 million in 2012.  Part of this settlement gave PokerStars the Full Tilt Poker assets.  A portion of these funds went to pay U.S. players that were stiffed by Full Tilt Poker.

PokerStars hopes to reenter the U.S. regulated market in the future.  It attempted to do so in November 2013 but saw its licensing application get suspended due to the involvement in the company of people still under indictments associated with Black Friday.

In June 2014, Amaya Gaming announced that it would acquire PokerStars.  Its New Jersey licensing application is now under consideration again.

Full Tilt Poker

Full Tilt Poker was the second largest site in the world at the time of Black Friday.  It banned U.S. players one day after the Black Friday indictments were unsealed.

Full Tilt Poker was unable to pay U.S. players. Black Friday exposed a fraud.  Full Tilt Poker had been accepting electronic check deposits from players without ever receiving the money.  This allowed players to get credited with phantom funds.  These funds were lost at tables but Full Tilt was unable to cover them as it never got paid due to a lack of access to the U.S. banking system.

It also turned out that Full Tilt Poker’s owners were paying themselves dividends from player funds.  Full Tilt lost its Alderney license on June 29, 2011.  It closed immediately. It did not reopen until PokerStars took over in November 2012.

Absolute Poker and Ultimate Bet

Like Full Tilt Poker, Absolute Poker was also a fraud.  It was previously the home to two cheating scandals.  One was under the Ultimate Bet brand when owned by a different company.  Absolute Poker had its own cheating scandal.  Both involved “Super Users”. This meant that insiders could see the cards of opponents and played the hands accordingly.  The two scandals stole in excess of $25 million.  Scott Tom, one of the targets of Black Friday, is suspected by players to be the ringleader of the Absolute Poker cheating.

Cheating was not the only way Absolute Poker stole from its players.  It did not have enough money to pay players.  It owed players between $50 and $55 million at the time of Black Friday.  It only had about $7 million on hand.

Absolute Poker continued to operate and allowed existing U.S. players to stay on the site but stopped accepting deposits.  It started allowing players outside the U.S. to cashout at a rate of $500 per week.  That limit went up to $1,000.  These payouts were inconsistent and seemingly involved favoritism.

Absolute Poker was consistently dishonest about its U.S. player position.  It would tell the press and government that it had banned U.S. players but that was not really happening.  The site lost traffic as it became apparent it was not going to pay players.  It closed in late 2011.  The outstanding balance is believed to be about $45 million. The U.S. Justice Department started a remission process in 2017 to repay players that lost funds at the scam site. Players may go to Absolutepokerclaims.com for more information.

Poker Sites that Remained in U.S.

While the three largest sites were targeted by Black Friday and forced out of the U.S. market, several choices for online poker remained.

Merge Gaming, flag shipped by Carbon Poker, quickly became the largest U.S. site.  It exploded so fast that the company was forced to accept new U.S. players on June 1, 2011, six weeks after Black Friday.  Existing players were allowed to stay and deposit.  It reopened to U.S. players four months later.

Bodog also stayed in the U.S. market.  It was later indicted by the Maryland U.S. Attorney’s Office.  This included its founder Calvin Ayre, who remains on the FBI’s Ten Most Wanted list.  Bodog later rebranded its U.S. operations into Bovada and eventually became Ignition Casino.  It is now by far the largest U.S. poker site.

The Winning Poker Network also remained in the U.S.  It was known as Yatahay at the time.  It included True Poker, Bookmaker, and DoylesRoom.  Doyle Brunson was able to have his name removed from the online poker site and it later became Americas Cardroom, a brand used until 2007 by the company.  The Winning Poker Network was indicted under the Blue Monday investigation by the Maryland U.S. Attorney’s Office. It never missed a beat and pays players quickly to this day.

A couple of poker sites hit the market after Black Friday.  BetOnline created a skin on the Action Poker Network.  The network had not accepted U.S. players since 2006.

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