Most players cynically dismiss the senators' move as a strong arm play. The feds want their protection money — i.e., taxes — and won't let the ride continue until someone pays up. But since government moves in slow motion, it's left a multi-billion industry to rot from atrophy. Any remedy will likely take years.

"It's really frustrating to me," says LaTour. "It just seems they weren't seeing any of that money that was going out there so they want to set it up so they can tax it. But the longer this takes, the more there will be people like me who just give up on it and move on with our lives to find another way of making a living. I've pretty much stopped waiting around."

A solution seems simple. Since everything's handled electronically, Internet poker offers the possibility of instant taxation of winnings. And the feds could easily force sites operating in the U.S. to pay American taxes for the privilege of doing business here.

Michael Minkoff says he went from selling about a thousand gambling books a month to now moving around 50.
Bill Hughes
Michael Minkoff says he went from selling about a thousand gambling books a month to now moving around 50.
Maxwell Fritz at a charity poker event at the Pilgrim Community Nursery School in Oak Park, Ill.
Will Rice
Maxwell Fritz at a charity poker event at the Pilgrim Community Nursery School in Oak Park, Ill.

Yet the mom-and-pop poker enthusiast doesn't employ a battery of lobbyists on Capitol Hill. And even if she did, she'd still be confronted by anti-gambling moralists.

"We're a pretty small minority," says Wright. "We don't have a big voice. We need to be louder. But we're talking American politics. We know it's going to take longer than it should, they're going to find a way to screw people, and they're probably going to make the taxing situation really complicated."


Vanessa Peng is a vivacious, engaging young woman from Singapore. She came to the U.S. with her newly remarried mother when she was 8, settling in Rock Hill, S.C.

It was a culture shock to say the least. She and her brother found comfort playing video games as they slowly assimilated, and the seed of competition was sowed. She would eventually study law in little Lexington, Va. Her eureka moment came when she watched a friend play poker online. "I was completely fascinated," Peng says.

It wasn't until her third year of law school that she found the time to dive in. She started with $25 in her account and played the penny tables, slowly learning the game. She was thrilled by the competition and the mental challenge.

"The thing about living in a very, very small town is you get bored pretty quickly," says Peng. "Since I didn't have much of a social life in that little town, I was able to play a lot of poker in that six months. By the time graduation came I was supposed to be studying for the bar and that good stuff, but I was so wrapped up in poker, that was kind of what took over my life. On top of everything else, the legal market had sort of crashed at this point."

She found a job working with a divorce attorney in Chicago, but discovered she didn't have the stomach for it. Then she failed the bar. Peng saw it as a sign.

"I was able to take a step back and really reexamine my life. Around that time poker was going really well for me. I had my first five-figure month and I just really started re-evaluating, thinking maybe this is what I was meant to do."

She made $40,000 that first year. By 2010, she was pulling in six figures annually.

When Black Friday hit, Peng was one of the top money-makers on Ultimate Bet, with $30,000 in her account. She'd also just won $12,000 in a Full Tilt tournament. All told, she saw $80,000 frozen in the crackdown.

Peng was better situated than most to weather the storm. She and her boyfriend — who also plays — moved to Windsor, Ontario. The Canadian town sits just across the river from Detroit, allowing her to play online while still traveling to live tournaments.

Nearly a year after the feds froze her money, Peng hasn't seen a penny of it.


Within a month of the federal crackdown, PokerStars returned $100 million to U.S. players, and continued to operate internationally.

Full Tilt was cleared to offer returns but never did, since it doesn't have the money. It owes $150 million to American players alone. In September, the feds accused owners Howard Lederer and Chris "Jesus" Ferguson of running a "global Ponzi scheme."

"Banks fail for not having sufficient revenue to cover customer deposits all the time," the company's lawyer, Jeff Ifrah, said at the time. "No one refers to such failures as Ponzi schemes. And there was no Ponzi scheme here." The court battle rages on.

In the fall of 2011, the French company Group Bernard Tapie stepped in to buy Full Tilt for $80 million, promising to pay off the debts to international players. The feds have assumed responsibility for paying American players, though they've yet to announce a timetable for repayment.

Absolute Poker — originally formed by four frat brothers at the University of Montana — wasn't liquid enough to continue either. None of its players has been reimbursed.

In December, Absolute Poker co-owner Brent Beckley pleaded guilty to lying to banks about the nature of his transactions. He's expected to receive 12 to 18 months in jail.

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7 comments
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facebook-1214735689
facebook-1214735689

The feds go after internet gambling that provides a way for people to cash out, but they really should be going after companies like Zynga that feed on gambling addictions while making it totally impossible to actually win. Where is the story on this? Oh yes, the sleaziness of Zynga is last year's story...

Gail S.
Gail S.

Great information. Thank you for shedding light on this story! I'm glad you are providing information on the tragedy that was our Black Friday.

In response to 1dayatatime, below, any addiction can be a terrible thing, but people also have addictions to fast food, shopping, video games, etc. It should not be up to the government to take away our decisions of what we can and cannot do. Should we ban fast food? shopping? video games? Where would it end? Americans need to be free to make our own decisions, and as Sheryl J pointed out, with regulation will come the necessary supports to assist people with gambling problems.

Sheryl J
Sheryl J

Thank you for this informative article about online poker and what the government did to it. An entire industry was destroyed last year. This is the first article that really illustrates the situation. We need federal legislation that licenses and regulates online poker in the U.S. and brings back an industry.

Sheryl J
Sheryl J

Thanks for this informative article about online poker and what the government did to it. An entire industry was destroyed last year. This is the first article that really illustrates the situation. We need federal legislation that licenses and regulates online poker in the U.S. and brings back an industry.

Sheryl J
Sheryl J

Thanks for this informative article about online poker and what the government did to it. An entire industry was destroyed last year. This is the first article that really illustrates the situation. We need federal legislation that licenses and regulates online poker in the U.S. and brings back an industry, while at the same time strengthening laws against online roulette and such.

1dayatatime
1dayatatime

A Gambling Addiction is a gruesome taskmaster just like all the other addictions, it eventually destroys the hopes and dreams of everyone in its wake. Who is behind the scenes profiting from this sleazy business?

Sheryl J
Sheryl J

Like any industry, addictive or otherwise, there are many people profiting. Just as many people profit in the retail industry, which is also addicting. Many people behind the scenes of the coffee industry profit, too. I am not making fun of your issue. It is true that about 1% of the people who play poker are addicted. It sure would help if online gaming were licensed and regulated so problem gamblers would get the attention they need. Instead, players go to offshore sites that don't care if they have a problem.

 
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