The Grey UIGEA strikes again, Feds Take Down $13.3 Million

After more than a year of hide and seek Uncle Sam has managed to put his hands on an individual which had been accused of being the man behind the two companies coming under the names Allied Wallet and Allied Systems which had forfeit $13.3 Million of cash coming from processing of funds coming from popular US facing poker room pokerstars.com. The gentleman has been seized the funds after a long battle that started June last year.

The Feds have accused Ahmad Khawaja and his two firms of accepting to process funds for online poker play for the worlds largest online poker room pokerstars.com licensed in the Isle of Man. The funds had been traced to be linked to overseas banking facilities rumoured to be settled in Cyprus. The popular poker room from its own point of view remains strong behind its position and claims that they are not doing anything wrong as all their business practices are properly licensed and the associated institutions with pokerstars.com follow all relevant protocols for licensing, integrity and fair practices.

“PokerStars does not condone efforts by processors to conceal the nature or purpose of funds used to play online poker,” PokerStars said in a statement. “PokerStars has taken steps to ensure that processors properly disclose the nature of their business to their relevant financial institutions.”

Even after the above case the Feds have stood unable to go directly after the online gaming establishments for reasons that still remain silent but can be understood to be either diplomatic or based on loose tie of an amendment which can back up allegations. As the online gaming industry is expected to be opened soon in the US the above clearly presents a scenario of diplomacy from the US authorities against US facing gaming establishments which can prove to be future tax payers if the UIGEA is amended and revised in the following year.

The Feds once again have proved unable to back up the grey UIGEA and have once again shown that they are unable to stop the online poker from running in the US. It is noteworthy that pokerstars.com is more than likely to continue to run its operation as is today even if the UIGEA is revised and if a French gaming model is introduced as the industry talks about thoughts coming from Uncle Sam’s representatives to block gaming establishments that had continued to accept wagers from US citizens after almighty president Bush thought that he had found the solution to the tax losses coming from online gaming when he introduced the UIGEA in 2006.

The above accusations and prosecutions all lay under the Wire Act of 1964 which has found broadband internet escaping from its paragraphs and gaming companies taking advantage of the lack of clarity of the particular Act. At the same time the US government has realised that a possible strategy of blocking gaming altogether might end up to be very costly in terms of tax losses which is why 5 years have passed and a solution is still being searched for.

More information about the UIGEA

Why US Poker Rooms Cannot be Affected by the UIGEA

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