Full Tilt Poker, PokerStars Charges: John Campos Defense Claims Online Poker Is Not Gambling

10/04/2011 11:57 am ET | Updated Dec 04, 2011

NEW YORK -- Defense lawyers for a Utah banker and a businessman indicted on gambling charges are trying to convince a federal judge that online poker isn't really gambling, an argument aimed at crippling a prosecution that seeks to permanently shut down the three largest Internet poker companies operating in the United States.

The lawyers made their arguments in papers filed in federal court in Manhattan on Friday and Monday, seeking to have charges dismissed against the bank executive, John Campos, and co-defendant Chad Elie. The government alleges that Elie persuaded Campos to let SunFirst Bank, based in St. George, Utah, process money for foreign-based online poker sites, PokerStars and Full Tilt Poker. Both men had pleaded not guilty.

Lawyers challenged various gambling charges brought against the men for several reasons, saying the government had stretched gambling laws to bring charges against 11 individuals.

Lawyers for Elie cited the Indian Gaming Regulatory Act, enacted in 1988, which they said puts poker in the same category as bingo and card games, but not with such card games as baccarat or blackjack.

The lawyers said poker differs from gambling games because the company that charges a fee or "rake" to provide a venue for the game – in this case the Internet – does not participate in the game at all. They said online poker is a game in which the players have some control over the outcome.

"The players compete against each other on a level playing field, using an array of talents and skill to prevail over their opponents," the lawyers wrote.

Court papers filed by lawyers for Campos argued the same point, saying the online poker companies were unfairly accused of engaging in the business of betting or wagering even though they had no stake in the outcome of the card games.

"The distinction between the poker companies in this case and websites that offer casino-style games and sports betting is stark. Online operators of casino-style games like roulette and slots are playing against their own patrons. Likewise, sports betting websites are also on the opposite side of their customers' bets. Those operators make profits from their customers' losses," the lawyers said. "The poker companies did not participate in the games, and had no risk or stake in the outcome of the games. Instead, the companies provided virtual facilities for the games, and collected, in exchange, a fee for each hand played."

They noted that Attorney General Eric Holder testified before the House Judiciary Committee Hearing in May that deciding whether poker was a game of skill or chance was "beyond my capabilities."

The court papers were filed two weeks after Justice Department lawyers filed a revised lawsuit against Full Tilt Poker, saying the company illegally raided player accounts to fund operations and make lavish payments to its owners. The government said the company over four years used $444 million in player money to pay board members, leaving just $60 million in its bank accounts in March to cover the $390 million it owed to players.

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