Online poker players face legal questions

By Ryan Nakashima

updated 4:31 p.m. ET Aug. 7, 2006

LAS VEGAS - Last week, Tao nightclub was swathed in red and black as music pulsated and go-go dancers gyrated on raised platforms along the wall. Everything from the "reserved" signs to the billiard table felt to the models' Chinese-style dresses bore the "bodog.com" label.

The only thing missing was the online gambling site's flamboyant founder, 45-year-old Canadian Calvin Ayre, who was nowhere to be found.

"He'd have girls all around him and he'd be the life of the party," said Ronn Torossian, a publicist and acquaintance familiar with Ayre's celebrating ways.

But the billionaire who graced Forbes magazine's March cover decided to make himself scarce after federal authorities arrested online gambling site BetOnSports PLC executive David Carruthers on July 16 as Carruthers transferred planes at Dallas-Fort Worth International Airport. A federal judge ordered BetOnSports to stop accepting bets placed from within the United States, and prosecutors are seeking the forfeiture of $4.5 billion, plus several cars, recreational vehicles and computers from Carruthers and 10 other indicted defendants associated with the Costa Rica-based sports-betting operation.

As the World Series of Poker was in full swing at the Rio hotel-casino, Internet poker site officials danced around an issue looming over the tournament: Is online poker legal?

Tournament organizers and the U.S. Justice Department say no. The players, thousands of whom qualified in cash-paying Internet tournaments, say yes.

"I've got no certainty whatsoever," said Ayre, speaking by telephone from Canada, days after Carruthers' arrest.

"I don't believe any senior executive of any online gaming company is going to be going into the United States for the foreseeable future," Ayre said. "It's not just me, and I've talked to a lot of them."

The World Series of Poker's uncomfortable relationship with online gambling took center stage in May 2003, when an unknown accountant named Chris Moneymaker qualified through a $40 online satellite tournament and went on to win the $2.5 million main event to become the poster child for the online poker revolution.

Advertising by poker sites on mainstream television exploded — and then the Justice Department intervened.

In a June 11, 2003, letter, deputy assistant attorney general John Malcolm warned the National Association of Broadcasters that the department considered Internet gambling to be illegal, and said, "any person or entity who aids or abets" online betting "is punishable as a principal violator."

Major networks reacted by forcing online poker companies to create "dot-net" sites, on which poker was played only for fake money and no reference or link would be made to the "dot-com" versions, where billions of very real dollars are wagered every year.

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