Friday brought great news for online poker players in New Jersey and around the world, as many finally received their account balance refunds from defunct poker sites UB and Absolute Poker. Just a few months ago, this development seemed highly unlikely, as nearly everyone had long ago written off the money they were owed.
While the refunds in many ways represent the end of an era, particularly in New Jersey where players have a robust set of legal online gambling options, we would all be wise to remember well the lessons that era taught us.
Coming of age in the Wild West
You don’t have to think too hard to come up with contemporary examples of tech products that exist in murky legal territory. Uber and Airbnb, for example, are both giant companies that have often operated in what industry observers would consider to be grey markets.
In the age of the Internet, new products come to life quickly that haven’t been properly addressed by lawmakers because they simply didn’t exist before. And while technology moves fast, movement on legislation to address disruptive tech can be painfully slow.
This was very much the case with online gambling, an industry that seems in hindsight like it was always destined to go through some immense growing pains.
Out of that early era came a number of gambling sites, many of which were based offshore and operating in a legal grey area – at best. Gradually the more serious companies, many of which are now operating in legal environments with government oversight, began to separate themselves.
While the complete history of online gambling in the US is beyond the scope of this article, suffice to say that by the time the Unlawful Internet Gambling Enforcement Act was passed in 2006, the industry was already moving toward a greater level of transparency and legitimacy.
UB and AP never fully straightened out
Even before the US Congress got involved, several of the world’s biggest online gambling companies had already gotten serious about planning for the future. Industry behemoths Party Gaming and 888 Holdings both went public in 2005, and a host of others followed.
When the UIGEA passed, the publicly traded companies had no choice but to pull out of the US market, and they weren’t alone in leaving. But UB and AP, along with eventual Black Friday co-defendents PokerStars and Full Tilt Poker, chose to stay.
The decision to continue allowing US customers was temporarily lucrative for UB and AP, which merged shortly after the UIGEA. But rather than focusing on legitimizing their business and planning for a future, more tightly regulated landscape, the newly merged company fell into disarray, most famously resulting in the worst cheating scandal in online poker history.
After the Black Friday indictments surfaced, it became clear that only PokerStars was fully prepared for a run on the bank. Full Tilt and AP/UB both effectively went out of business, leaving their customers wondering if they’d ever see their money again.
UB and AP, it turned out, had only a small fraction of their liabilities on hand, and in the end very few people were paid before the company went out of business entirely.
In the days, weeks and months following Black Friday, US poker players’ despair over the status of their funds reached a boiling point. Rumors swirled about Full Tilt potentially being acquired by a French investor, and PokerStars eventually did get purchased by Amaya, Inc.
And while it always seemed likely that Full Tilt players would eventually receive at least a portion of their funds, there was scarcely a word about UB and AP.
In the middle of 2011, shortly after Black Friday, distressed former customers were selling their balances on the 2+2 forums for pennies on the dollar to investors hoping for a big payday down the road. But within a couple years, those investments looked like they’d come up empty.
To the shock of pretty much everyone, the Poker Players Alliance, a poker player advocacy group, announced in April that UB and AP players would be receiving refunds later in the year.
And on Friday, September 29th, those refunds started showing up in players’ accounts.
If you were part of the AP/UB settlement, you may want to check your email/bank account https://t.co/8xrkgrzhuR
— Kevin Mathers (@Kevmath) September 29, 2017
Haven’t seen any posts about this but I just received my Absolute Poker balance from Black Friday 😄😄
— Russell Thomas (@RunGoodRussell) September 29, 2017
Why this shouldn’t happen again
It’s wonderful to finally get closure on a horrible situation for so many people, and in a way we can finally put the “old era” of online gambling behind us. While some offshore operators continue to offer unlicensed games, there’s a clear line today between the legitimate and shady sides of the industry, and many of the major markets around the world have taken action to license and regulate operators.
While the US has been slow to get in line, three states have successfully regulated online gambling and more are coming. The legal New Jersey industry has been a shining example of what can happen when compliance is taken seriously and has helped revived Atlantic City financially. NJ online gambling revenues are such that other states are taking a serious look at passing legislation of their own.
UB and AP players are finally seeing the light at the end of the tunnel, but no player in any state should have to fear for the safety of their funds or the fairness of games. All of this is baked into the New Jersey’s robust regulatory structure, and other states should be taking a good hard look at doing the same.