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Chris Sieroty

U.S. Internet poker players still gambling

19 May 2011

Online poker players have found a way to continue playing for money through Absolute Poker even though the federal government seized and closed the gaming company's website in a major crackdown on online gambling last month.

Internet gambling violates federal law, and the seizure was intended to stop residents of the United States from playing cards for money through the site.

But Pokerscout, an online poker tracking report based in Las Vegas, reported Tuesday that it has identified players from "obviously American cities such as Chicago; Bakersfield (Calif.); Cincinnati; Colorado Springs (Colo.); and Minnetonka (Minn.)" in real-money games on the Cereus Network, which operates Absolute Poker and Ultimate Bet.

Dan Stewart, owner of Pokerscout, said players can sidestep federal law enforcement if they had downloaded Absolute Poker's game software before the April 15 crackdown.

The software sends their play directly to the company's Internet provider address, bypassing the now-seized website, he said.

It's unclear how many online U.S. players have discovered this.

While supposedly no longer available for U.S. residents, the Justice Department has agreed to let Absolute Poker, which is based in Costa Rica, continue in business to serve only customers in other countries.

A lawyer for the company said Wednesday that Absolute Poker is abiding by that agreement.

"All measures have been taken to prevent U.S. players from playing with real money," said Jerry Bernstein, a partner with the New York law firm Blank Rome LLP.

According to the agreement with the Justice Department, "Absolute Poker agrees that ... it will not allow for, facilitate or provide the ability for players located in the United States to engage in playing poker for real money or any other thing of value."

The deal also covers return of funds Absolute Poker owes to U.S. customers.

Carly Sullivan, a spokeswoman with the U.S. Attorney for the Southern District of New York in Manhattan, declined comment on the Pokerscout report or any possible violation of the agreement.

Pokerscout's report suggests Cereus would not only be in "breach of contract, but would also potentially face fraud and other charges for signing a contract it had no intention of following."

On April 15, the founders of PokerStars, Full Tilt Poker and Absolute Poker were indicted on charges of circumventing a 2006 federal law barring banks from processing payments to offshore gambling websites.

The founders of all three companies face charges of illegal gambling. Bernstein said Wednesday he had no further updates concerning the case against Absolute Poker.

As of Wednesday only eight of the 48 poker sites tracked by Pokerscout still allow U.S. players to participate in real money games.

The biggest of those sites in terms of participation was Merge Poker Network. The site was ranked eighth, averaging 1,760 poker players per hour over the past seven days.

PokerStars, based on the Isle of Mann and Ireland's Full Tilt Poker along with Absolute Poker had been the leading online poker sites doing business with U.S. customers, according to federal prosecutors.

Meanwhile, Cereus' traffic declined another 29 percent last week, dropping into 29th place in Pokerscout's rankings. Overall, Cereus has lost 82 percent of its traffic since Black Friday.

PokerStars posted a 28 percent decline in traffic, while Full Tilt suffered a 24 percent drop. Pokerscout didn't mention PokerStars or Full Tilt in its weekly report as sites still allowing U.S. players to play for money.

The Internet poker market was $5.1 billion last year, 7.1 percent higher than 2009, according to H2 Gambling Capital, a U.K.-based firm that tracks data on the online gaming industry.

The worldwide online gambling market reached about $30 billion in 2010.
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