Life for Poker

The arrest of online gambling entrepreneur Daniel Tzvetkoff

Daniel Tzvetkoff, a young Australian entrepreneur who co-founded the online payment processor Intabill in 2007, had a brief, flashy run as a multimillionaire before his business collapsed amid accusations of financial mismanagement. But his real crime, according to the U.S. government, was doing precisely what Intabill purported to do: facilitate online payments, including bets by American poker players.

When Tzvetkoff was arrested during a visit to Las Vegas in April, it was the first time anyone had been publicly charged with violating the Unlawful Internet Gambling Enforcement Act. Enacted in 2006, the law makes it a federal crime for someone “engaged in the business of betting or wagering” to accept a payment in connection with “unlawful Internet gambling.”

Since Tzvetkoff did not run any gambling businesses, the U.S. Attorney’s Office in Manhattan accuses him of conspiring with others who do, including the operators of such popular websites as PokerStars and Full Tilt Poker. The indictment also alleges a conspiracy to violate the Illegal Gambling Business Act. Based on the same transactions, U.S. Attorney Preet Bharara threw in two money laundering counts and a bank fraud charge, which alleges that Tzvetkoff misled American financial institutions about where money drawn from their customers’ accounts was going.

When the penalties for the four counts are added together, Tzvetkoff faces up to 75 years in prison, plus more than $2 billion in asset forfeiture, for the crime of helping Americans play poker. All this is based on a New York state offense, “promoting gambling in the second degree,” that is classified as a misdemeanor and arguably does not cover poker.

Tzvetkoff’s unindicted co-conspirators are the same creditors who lined up in Brisbane for the money they said Intabill owed them. Viewed as legitimate businesses in the rest of the world, online gambling companies are treated as criminal enterprises in the U.S., and Tzvetkoff could face life in prison for helping them. 

Jacob Sullum is a senior editor at Reason and a nationally syndicated columnist.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

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    Seriously, the guy should have been involved in a more honest line of work. Like horse racing or state lottery payment processing.

  • Fiscal Meth||

    ...or morality legislature.

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  • CaptainSmartass||

    I have a hard time finding sympathy for guys like this. He knew that what he was doing was illegal in the US, one of the worst places in the world for stupid laws being enforced. So why did he come here? He should've stayed his ass in Brisbane with all his hookers and blow.

  • BakedPenguin||

    Did you RTFA? He ran a business similar to PayPal. His "crime" was that he didn't stop people from putting money into their online gambling accounts. He was arrested because he refused to be an unpaid, non-voluntary cop, policing people's morals.

  • ||

    Agreed that setting foot on US turf wasn't the best idea given his situation, but to be fair he's the first guy to be charged with violating a 4 year old federal law. Maybe he figured he could safely flout the law without consequence like everyone else can.

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    He violated a law that only a few people have even heard of. I can see where this arrest came completely out of the blue.

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    I would say eff Uncle Sam and the horse he rode in on, but it might be illegal in the US. I'll wait til I visit Oz next month to say that.

  • JohnD||

    Yet the Feds refuse to try the Blacks Panthers that vilated the voting rights act. What a bunch of assholes. A pox on all of the Obama admin. They are nothing but crooks and traitors

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  • ||

    While he should have seen it coming, whats insidious about this is the pile on that goes. When the Feds don't have the actual underlying laws which make internet poker illegal (The Wire act's jurisdiction over poker is tenuous at best) they label the "crime" bank fraud and money laundry. They'll likely strike up a plea deal and he may just get probation, but the whole purpose of this exercise to reinforce the fallacy that internet poker is actually illegal.

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  • Almanian||

    I'm shocked they didn't trot out the old Interstate Commerce Clause chestnut. Works like a charm, every time...

  • ||

    Piling on's a time-honored law enforcement tradition. They know their initial charge might be overturned, so they add on a whole lot more. After all, the politically appointed wouldn't want to lose their jobs for falling conviction rates. Between piling on and "asset forfeiture," law enforcement's becoming a pretty good racket. Sort of like the Chicago mob used to be.

  • Richard Nous||

    What are the odds on Tzvetkoff getting 75 years?

    And do I have to go to Vegas to place my bet now?

  • ||

    @ Richard,

    suggest it to Intrade, maybe they take it up.

  • DownsizeDC||

    The on-line gambling bill couldn't even pass Congress on its own. It was attached to a port security bill. This meant that if you opposed the gambling ban, you were FOR the terrorists.

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    Geez I wish line-item veto wasn't found unconstitutional.

  • ||

    The UIGEA is so full of holes they don't dare prosecute directly. Conspiracy is as close as they came come.

    Money laundering? attached to traffic tickets these days.

    So much for the rule of law.

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    The statutory law related to payment forwarding is pretty convoluted. Ya know who helps facilitate the funding of Julian Assange in his war against the United States? Ebay, the owner of PayPal. I guess that's legal.

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