$547 million Pokerstars settlement includes reimbursement of Full Tilt customers

Associated Press

Published Tuesday, July 31, 2012 | 9:58 a.m.

Updated Tuesday, July 31, 2012 | 10:34 a.m.

NEW YORK (AP) — Settlement deals reached between federal prosecutors and three Internet poker companies call for more than a half billion dollars to be paid to the government, enabling U.S. poker players to recover several hundred million dollars lost when the companies shut down U.S. operations last year, authorities said Tuesday.

U.S. District Judge Leonard B. Sand approved settlement agreements with PokerStars and Full Tilt Poker. A separate agreement between the government and a third company, Absolute Poker, had not yet been approved by the court.

PokerStars said in a release that its deal with the U.S. Department of Justice calls for it to pay the government $547 million over three years with the money being used in part to reimburse former U.S. customers of Full Tilt Poker who are owed $184 million. PokerStars said it has acquired the assets of Full Tilt Poker.

The U.S. operations of the companies were shut down when the government last year brought criminal charges against various poker company executives and those who helped the companies process money.

The government said the settlements do not constitute admissions of wrongdoing, liability or guilt by any of the parties. The deal with PokerStars allows it to reenter the U.S. market if laws change to permit online poker.

In a statement, U.S. Attorney Preet Bharara said the deals will "allow us to quickly get significant compensation into the victim players' hands."

Jerry Bernstein, a lawyer for Absolute Poker, said the company's deal with the government calls for it to forfeit its assets to the government.

"Our hope and expectation is that the proceeds of the forfeiture will be used to repay our players," he said. Bernstein declined to say how much players were owed.

"We are delighted we have been able to put this matter behind us, and also secured our ability to operate in the United States of America whenever the regulations allow," said Mark Scheinberg, chairman of the board of PokerStars.

Last year, the U.S. government brought charges against 11 individuals who had played management roles in the companies or had helped them process billions of dollars in gambling proceeds through U.S. financial institutions. All but one pleaded guilty. Charges are pending against four other defendants who remain at large.

The government accused the companies of fooling banks into processing the money by making it seem that funds resulted from payments to hundreds of non-existent online merchants selling merchandise such as jewelry and golf balls.

The United States said that approximately one-third or more of the billions of dollars went directly to the poker companies as revenue through the amount they charged each player to join a game.