After initial attacks on the online sports betting industry during the summer of 2006, the U. S. Department of Justice has been expanding their reach. After the passage of the Unlawful Internet Gaming Enforcement Act in October, several sports books and online poker rooms restricted access to Americans and, after the arrest of the founders of NeTeller last week, some online e-wallets are feeling the pinch as well. Now the DOJ is moving on to the place where it might have significant effect…Wall Street.
In an article in the New York Times by Andrew Sorkin and Stephanie Saul, it was announced on Monday that the Department of Justice is now using the UIGEA to go after four Wall Street investment firms who may have participated in underwriting of the initial public offerings (IPOs) of several online poker rooms and gaming sites. Subpoenas were issued to HSBC, Credit Suisse, Deutsche Bank and Dresdner Kleinwort, and others are reportedly being looked at as well. All of these investment banks were reportedly involved with the IPOs of many online poker rooms, including PartyPoker and 888, on the London Stock Exchange over the past two years.
The Sunday Times of London was the first to break the news of the subpoenas, which now is beginning to demonstrate the aggressiveness that the U. S. Department of Justice is going after the online gaming world. Because many of the online casinos and poker rooms are located in areas the DOJ can't touch (such as Costa Rica, Antigua and Europe), the DOJ is looking to attack those areas it can. It looks as though the DOJ will be looking at American citizens or participants of these companies, their marketing areas and, apparently now, the investors in these companies.
There appears to be some concern by the legal minds over these recent activities by the Department of Justice. They range from what appears to be a concerted attack against online gaming to a previously untouched area in legally traded stocks by persons and investment firms. What isn't clear is just how deep the DOJ will go in the pursuit of online gaming with one of the biggest wagering events only two weeks away with Super Bowl XLI.