Plaintiffs Fold on Their Full Tilt Poker Actions Following Court’s
Rejection of Class Certification and Proposed Settlement
By Elizabeth Schutte
The plaintiffs in three actions against entities and individuals involved in the Full Tilt Poker Internet
gambling operation dismissed their claims without prejudice in the U.S. District Court for the Southern
District of New York. Their voluntary dismissal came a few weeks after U.S. Magistrate Judge Kevin N.
Fox refused to certify a class and rejected their proposed global settlement with the Full Tilt defendants.
Relying on the standards set forth in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) and Comcast
Corp. v. Behrend, 133 S. Ct. 1426 (2013), Judge Fox found that the plaintiffs did not satisfy Rule 23 and
that their proposed settlement failed to provide due process to those putative class members claiming
damages. The district court refused to permit an injunctive relief settlement – one which denies class
members the right to opt out – when money damages were also at stake.
Internet Gambling and “Black Friday”
Full Tilt, PokerStars, and Absolute Poker/Ultimate Bet (collectively, the “Poker Companies”) were
the largest online gambling sites operating in the United States following Congress’s enactment of the
Unlawful Internet Gambling Enforcement Act of 2006 (the “UIGEA”). The UIGEA made it a federal crime
for gambling businesses to “knowingly accept” most forms of payment “in connection with the
participation of another person in unlawful Internet gambling.” 1 Many online poker businesses
subsequently aborted their U.S. operations, allowing the Poker Companies to step in and dominate the
market,2 which continued until the U.S. Attorney’s Office for the Southern District of New York shut down
their websites, seized their assets, and issued arrest warrants for their founders on April 15, 2011, known
as “Black Friday” within the online gambling community.
The Department of Justice (the “DOJ”) brought civil and criminal actions against the Poker
Companies and their founders, and other entities and individuals involved in the operation, alleging that
the defendants used fraudulent methods to circumvent the UIGEA and deceive U.S. banks and financial
institutions into processing billions of dollars in payments for the Poker Companies.3 The DOJ alleged, for
example, that the Poker Companies, which were each located offshore, utilized third-party payment
processors to open accounts at U.S. banks and disguise money received from U.S. gamblers as
“payments to hundreds of nonexistent online merchants and other non-gambling businesses.”4 On April
20, 2011, the DOJ entered into agreements with PokerStars and Full Tilt allowing them to use their
respective domain names for the limited purposes of reopening online poker games to players outside of
the U.S., and to facilitate the withdrawal of U.S. players’ funds from accounts held with PokerStars or Full
Tilt.5
Three putative class actions were later filed in the district court by and on behalf of online poker players
who could not access the funds in their Full Tilt accounts.
The Three Putative Class Actions Against Full Tilt
2 Dan Cypra, iMEGA: Signs Were There for Online Poker Seizures, Poker News Daily, Apr. 25, 2011,
http://www.pokernewsdaily.com/imega-signs-were-there-for-online-poker-seizures-18918/.
3 Verified Compl., United States v. PokerStars, Civ. No. 11-2564 (S.D.N.Y. Apr. 14, 2011), ECF No. 8;
Superseding Indictment, United States v. Scheinberg, Cr. No. 10-336 (LAK) (S.D.N.Y. Mar. 10, 2011), ECF No. 20.
4 Verified Compl., supra note 3, ¶¶ 2-3.
5 See, e.g., Notice of Agreement Between the United States Attorney’s Office & Vantage Limited d/b/a Full Tilt
Poker Regarding Use of Domain Name Fulltiltpoker.com, United States v. PokerStars, Civ. No. 11-2564 (LBS)
(S.D.N.Y. Apr. 20, 2011), ECF No. 11.
