Bad news for online poker players, gambling aficionados and quite a few fighters everywhere.
Three prominent online gambling site owners, including Strikeforce and major MMA sponsor Full Tilt Poker, as well as Absolute Poker and PokerStars, were recently indicted for tricking banks into processing illegal Internet gambling proceeds.
Reuters explains further:
Eleven people, including the owners of Full Tilt Poker, Absolute Poker and PokerStars, were charged with violating U.S. anti-Internet gambling laws, according to charges filed by federal prosecutors in Manhattan. Prosecutors also filed civil money laundering charges seeking to recover at least $3 billion from the companies, which are all based overseas, court documents said. The Internet domain names of the companies were also seized. ... The criminal charges outlined a scheme by the company owners and some of their employees to direct the gambling profits to online shell companies that would appear legitimate to banks processing payments.
The Reuters report goes on to explain that the charges are a part of a crackdown on Internet gambling in the U.S. which has been illegal since 2006. Of course, that hasn't done much to stop the continued flow of a massive amount of people visiting these websites on a daily basis.
This is no longer the case as the domain names have been seized by the Department of Justice (DOJ) and are no longer operational.
What kind of effect does this have on the landscape of MMA? FightOpinion goes into more detail:
When discussing this story, you simply can't avoid the politics of it. The political climate was growing in the US Congress to work out legislation for online gambling in the States. Harry Reid, who Zuffa management helped out politically in his 2010 re-election campaign, was receptive to the idea of legalization. Several other key players, like Barney Frank, were also keen on the idea. After all, legalize-and-tax made perfect sense. The political climate became so positive that the Las Vegas casino power players like Steve Wynn and the Fertittas got involved in deals with companies like Full Tilt Poker. ... Full Tilt Poker is a Strikeforce sponsor. They are a sponsor of several high-profile MMA fighters. They also happened to become friendly with the UFC. (Remember when UltimateBet.net was thought to have an inside track and that collapsed?) ... By the way, the Manhattan prosecutor involved in this case is the same prosecutor that Dana White has publicly thanked in being aggressive in anti-piracy efforts relating to footage that Zuffa owns copyrights to.
This, quite obviously, will greatly affect the fighters more so than it will the promotions. As we all know, the amount of money to be made in mixed martial arts isn't exactly like that of other sports leagues.
When fighters base salaries are as low as $8,000 (and oftentimes lower, especially in the case of Strikeforce fighters), they rely heavily on added income from outside sponsors.
It should be noted that there are those who have made clear the fact that sponsorships are for companies .net domains. For example, while FullTiltPoker.com has been seized by the DOJ, FullTiltPoker.net, which is used for entertainment purposes only (the site only offers play money), is still fully operational.
It remains to be seen how much of an effect this will have in a broader scope but the story is worth following and there is no questioning how much of an effect this will have on the fighters.