Tilt Transfer OK?
I've been thinking quite a bit about this (alleged) grand jury investigation into Full Tilt Poker's activities that's emanating from federal court in the Southern District of New York. I'm not sure I see it ending well for Full Tilt any time soon.
When I was at Mohegan Sun two weeks ago, I overheard David Singer and Phil Ivey negotiating a bet on whether Tiger Woods would win the Masters. Singer gave Ivey 5.5:1 odds to take Tiger, ultimately settling the amount of the bet at $20,000. As they were concluding their negotiations, Singer asked, "Tilt transfer ok?"
In the U.S., anyone who receives a cash transfer greater than $10,000 while conducting their trade or business is supposed to report that transfer to the Internal Revenue Service within 15 days. If the transfer is received by wire to a bank account, then the financial institution that receives the wire must file a similar report with the Treasury Department. Either way, transactions of more than $10,000 are reported to the government. These reports facilitate law enforcement against, among other things, tax evasion, money launderers and other criminal enterprises that deal in high volumes of cash.
Right now, U.S. online poker players can transfer any amount of money to each other without triggering the filing of any reports with the U.S. government. Every day U.S. players are transferring tens of thousands, hundreds of thousands, perhaps millions of dollars to each other online. It is essentially unregulated off-shore banking. In the case of the Singer-Ivey golf bet, Ivey presumably shipped $20,000 to Singer, but if it had gone the other way Singer may have shipped Ivey $110,000 (assuming they settled the bet right away).
Think about that in light of the SDNY grand jury investigation. From what I understand, the SDNY prefers to consider itself a semi-autonomous branch of the DOJ. It doesn't like to kowtow to the government overlords in Washington, preferring instead to trail-blaze its own path through gray areas of the law. The SDNY takes an especially strong interest in financial crimes, located as it is in one of the major financial centers of the world. Put all of those factors together and suddenly the SDNY's interest in online poker starts to make more sense.
Why Full Tilt though? Why not PokerStars? I can't say for sure. I'd guess it's a case of access to information. Full Tilt's various legal troubles during the last year have brought to public light a fair amount of information about Tilt's corporate structure and ownership, including the fact that some of the owners live right here in Las Vegas. That information for Stars, on the other hand, is more difficult to come by.
There's no indictment yet, and even if the government obtains an indictment, that's no guarantee there will be a full-blown prosecution of FTP. But the facts are not in Tilt's favor. For federal prosecutors looking to make names for themselves, this case is too tempting to pass up. Don't expect it to disappear any time soon.