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April 20, 2011 1:13 PM

Online Poker Sites Keep Their Domain Names; Skadden, Cozen Retained

Posted by Brian Baxter

UPDATE: 5/11/11, 7:00 p.m. The Justice Department has reached a similar agreement with Absolute Poker, advised by Blank Rome white-collar defense practice leader Jerry Bernstein and partner Marc Rothenberg, which can be found here.

As part of a deal reached with federal prosecutors, online poker sites Full Tilt Poker and PokerStars will be able to use their Internet domain names to reimburse U.S. customers after the government's online gambling crackdown that began last week. The agreement will also allow online poker players outside the U.S. to continue using Full Tilt and PokerStars.

Preet Bharara, U.S. attorney for the Southern District of New York, announced the agreement Wednesday morning. Web sites for Dublin-based Full Tilt, Isle of Man-based PokerStars, and three other domain names were taken down last week after the government unsealed a criminal indictment against 11 individuals and a civil complaint against several companies and moved to seize their U.S. assets.

The agreements announced on Wednesday allow Full Tilt and PokerStars to use their Web sites to reimburse U.S. users who could not access their accounts after the government filed its criminal and civil actions on Friday. A U.S. citizen who in theory might have had $20,000 on deposit to play online poker with either Full Tilt or PokerStars, can now recover that money.

"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," Bharara said in a statement. "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 players."

The agreement announced on Wednesday also allows players from non-U.S. IP addresses to access the Web sites of both companies to play online poker. A person in London who wants to play online poker with either Full Tilt or PokerStars will now be able to access Web sites for both companies without being met by a domain name seizure notice by the Justice Department.

Both Full Tilt and PokerStars have agreed to shut down their services catering to U.S. online poker players while the underlying legal issues in the case are being litigated in federal court. Another online poker company charged in the government's case, Costa Rica-based Absolute Poker, still must reach its own agreement with the Justice Department.

Copies of the agreements reached by both Full Tilt and PokerStars show that Cozen O'Connor and Skadden, Arps, Slate, Meagher & Flom have been retained by each company, respectively. (Click here and here to download those agreements.) The Am Law Daily reported earlier this week that Cozen and Skadden were among several Am Law 100 firms approached to represent defendants in the government's case.

David Zornow, global head of Skadden's litigation practice and guest speaker at a recent conference on Bob Dylan at Fordham Law School, is representing PokerStars along with white-collar and regulatory partner John Carroll and consumer financial services litigation and enforcement cohead Anand Raman. The firm declined to comment on its role in the case.

Barry Boss, a litigation partner who heads Cozen's office in Washington, D.C., is representing Full Tilt. Boss did not immediately respond to a request for comment.

On Tuesday, Chad Elie, a payment processor accused of obtaining U.S. bank accounts for the three offshore poker companies, pleaded not guilty to fraud charges, according to The Associated Press. Elie, who was arrested in Las Vegas on Friday and married a former Playboy Playmate on Saturday, has turned to William Cowden of D.C.'s Mallon & McCool for counsel. (Downey Brand's Craig Denney represented Elie before a federal court in Las Vegas on Friday.)

The National Law Journal, a sibling publication, reported on Tuesday that the brewing online poker dispute was one of the conflicts that caused Akin Gump Strauss Hauer & Feld to part ways with former appellate litigator Thomas Goldstein, who left the firm in January to return to what is now Goldstein, Howe & Russell.

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