Subject: Poker has recently been told of planned US Department of Justice action against the Merge Gaming Network or some part of it.

According to our sources, the US Attorney’s Office for the District of Maryland plans to seize the assets of payment processors who facilitated transactions between the Merge Network and its US customers. It is unclear exactly which payment processors are reportedly being targeted, whether indictments are planned in addition to seizures, or whether the DOJ intends to seize domain names as well.

The seizures were reportedly initially planned for mid- to late-September. However, such timelines are extremely fluid and sensitive to the particulars of the financial activities of the targets and the DOJ’s bureaucracy. So, an earlier or later date would certainly be possible. It is also unclear whether the DOJ will follow through with its reported plan now that it is public and, if so, how its publication would affect the timeline

Since the indictments on Black Friday, the Merge Network has made half-hearted attempts to avoid conflict with the DOJ. In particular, on May 24th, Merge stopped accepting new players from some US states with strict anti-gambling laws. This is likely in response to the Unlawful Internet Gambling Enforcement Act and the lesser-known 18 USC §1955, which use state laws to define federal crimes. However, by still allowing existing players from these states to continue playing for real money and ignoring many other states, such as Hawaii, that have strict gambling laws of their own, Merge has clearly failed to avoid the DOJ’s strict interpretation of violation of the UIGEA, which maintains that it is illegal to provide real money poker games to residents of these states.

It is not immediately clear what will happen next and how players should react to this news. If the DOJ does follow through on its reported plan on roughly the same timeline, it is unlikely that customers would be able to withdraw before seizures occur because withdrawals on Merge currently take over a month to reach customers. Indeed, since payment processors are reportedly being targeted, a withdrawal could potentially move a player’s money into the reach of the DOJ. If Merge and its payment processors begin to move funds in an attempt to avoid potential DOJ action, this could lead to further processing delays and possibly even bounced checks. Again, because of the slow withdrawals on the Merge Network, it is unlikely that players withdrawing now would be able to avoid such problems; they may instead simply be subject to delays and possible failed transactions.

Subject: Poker does not know at this time whether the Merge Gaming Network keeps players’ funds in segregated accounts. If the DOJ does seize Merge funds, clearly marked segregated accounts may be spared. The US Attorney’s Office for the Southern District of New York, the prosecutors behind Black Friday, released a statement in which it suggested a policy of not seizing segregated accounts and encouraging sites to repay players: “No individual player accounts were ever frozen or restrained, and each implicated poker company has at all times been free to reimburse any player’s deposited funds. In fact, this Office expects the companies to return the money that U.S. players entrusted to them, and we will work with the poker companies to facilitate the return of funds to player.” However, the Maryland USAO, the prosecutors behind the May 23rd seizures and the reported plans discussed in this article, has made no such statement and has generally shown players much less sympathy. So, it is not clear whether the Maryland USAO would seize segregated player funds, and if such a seizure (or any seizure) could cause the Merge Network to become unable to meet its obligations to players.

Subject: Poker will continue to monitor this story as it develops.