First Anniversary of Black Friday

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Black Friday is the name given in the online gambling industry to Friday April 15, 2011. On this day the United States Department of Justice (DoJ) seized the domains of the three largest online poker rooms operating in America. The American operations of Full Tilt Poker, PokerStars and Absolute Poker were brought to a standstill. The traffic at online gambling sites dropped substantially in the coming weeks. Though the industry has bounced back from that situation, the first anniversary of Black Friday provides an occasion to take stock of the situation.

The smallest of the three online poker sites Absolute Poker has all but disappeared from the forums and discussion boards. It would appear that no one is really bothered what has happened to it. PokerStars was immediately able to insulate its operations outside of the United States from the effects of Black Friday. Then PokerStars arrived at and executed a settlement with the DoJ, paid the humongous fines, got its seized funds released and paid off its American players. It appears that PokerStars would be able to reenter the United States online gambling market as and when online poker is legalized there.

The saga of Full Tilt Poker took and interesting turn during its settlement negotiations with the DoJ. It came to light that even if its bank accounts were unfrozen, there was insufficiency of funds to pay back its players. This was because Full Tilt had not ringed the player's balances and had used them in their operations. Full Tilt Poker, the DoJ and Groupe Bernard Tapie of France have arrived at an understanding that will hopefully clear the mess, but the fact remains that one year down the line Full Tilt Poker's players have not yet been paid.

Full Tilt Poker was licensed by the Alderney Gambling Control Commission (AGGC). AGGC immediately cancelled the online poker room's license, but nevertheless came in for a lot of flak for allowing this to happen. One thing is clear that the online players' funds are not guaranteed by the licensor or even national regulators. In the long run greater controls on the licensees are required and also more transparent reporting of the actual funds position. If this happens then one can say that lessons have been learnt from Black Friday.

A number of online casinos and poker rooms voluntarily closed down soon after Black Friday fearing a backlash from the DoJ. Prominent among these were the Vegas Technology powered online casinos belonging to the English Harbour and Golden Casino groups. Since the dotcom domain is regulated by VeriSign from within the United States many online gambling operators switched to domains located outside the United States to be safe. One of these was the Calvin Ayre franchise Bodog Casino. This did not help. The DoJ has gone ahead with the prosecution of this high profile operator, though after the bird has flown the coop.

The biggest positive to come out after Black Friday was a surprise announcement by the DoJ just before Christmas. The announcement said that in the future the dreaded Wire Act would apply only to online sports betting and not online poker or online casino gambling. The announcement also said that the states could legalize online gambling other than sports betting if they wanted to. Immediately the expectation rose sky high of legalized online gambling at the federal level being ushered in shortly. These were belied because there has been no perceptible movement on this front. Even the states are bogged down by internal dissensions and it looks a long wait before online gambling becomes legal in America.

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