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Peek behind Internet poker curtain would have revealed red flags

It’s easy to say they should have known better. But just what could high-profile lobbyists and mesmerized state legislators easily have known about the precarious nature of the Internet poker racket before they went all in for the controversial companies?

Officials of the top three operations, PokerStars, Full Tilt Poker and Absolute Poker, were indicted April 15 and charged with violating the 2006 Unlawful Internet Gambling Enforcement Act, bank fraud and money laundering conspiracy. In addition to the 11 defendants, 75 bank accounts were seized with the poker domain names. A multibillion-dollar civil money laundering and forfeiture action is also being pursued.

I’ll leave it to others to make the argument that Internet poker should be legal because millions enjoy it. It’s essentially the same logic used by marijuana dealers, who will tell you they’re only selling the public what it wants.

I don’t oppose legalization. On the contrary, legalizing it makes sense.

It’s just not legal yet.

I’ll try not to laugh when Internet poker’s advocates attempt to make the case that their game of head-to-head skill is actually legal while games of chance are not. Poker is a game of skill when Doyle Brunson plays it. When the John Smiths of the world play it, it’s a game of chance.

For the record, this isn’t just about violating a new federal gambling law. That indictment is riddled with allegations of bank fraud and money laundering conspiracy.

If the accused companies actually believed they were acting legally, good sense dictates they would have opened an office in Las Vegas instead of the Isle of Man. If they believed moving billions of dollars into a series of bank accounts whose identities were masked from the financial institutions was kosher, well, they keep a poker face far better than I do.

But that’s just common sense. I’m no legal mind.

So what should those lobbyists and legislators have reasonably known? And how hard would it have been for them to protect themselves and their reputations?

The consultants include former Henderson Police Chief Richard Perkins, former Gaming Control Board member and ex-investigations chief Randall Sayre and gaming attorney Scott Scherer.

Among the legislators who collected campaign contributions from the PokerStars crowd and agreed to carry their chips to the table in Carson City: Assembly Judiciary Chairman William Horne, Assembly Commerce Committee Chairman Kelvin Atkinson and Senate Majority Leader Steven Horsford. At this point, the best they can hope for is to be considered unsophisticated dupes in this mess.

The same can’t be said for Sayre, Perkins and Scherer.

Could it be possible none of those men knew how to use an Internet search function?


What’s a Google?

If they had bothered to take a cursory peek behind the lucrative Internet poker curtain, they would have seen red flags.

One emanates from the Southern District of New York and involves Account Services executive Douglas Rennick, who was indicted on charges of bank fraud and conspiracy in August 2009 and admitted laundering hundreds of millions for foreign Internet gambling companies and processing the offshore wagers of U.S. citizens. That includes poker players.

Rennick told U.S. District Judge Sidney Stein, “I had a business that transferred money from offshore gaming sites to American players within the Southern District of New York.”

Among Account Services’ clients: PokerStars and Full Tilt Poker.

Another undeniable sign of trouble emerged with the April 2010 money laundering-related arrest — in Las Vegas, no less — of Australian payment processor Daniel Tzvetkoff. He’s said to be cooperating with the current federal investigation. That also would have been easy to time.

But the legislators and consultants were likely too blinded by the pot to stop fawning over the poker bums and do a little homework.

An ounce of due diligence would have saved them a ton of headaches, and their gut-shot reputations, too.

John L. Smith’s column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith.

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