At the intersection of interactive gaming and government regulation, one law firm stands out. Ifrah Law represents many of the largest igaming companies and industry associations in the world. Our corporate clients include the online poker sites Full Tilt Poker and PokerStars. We also serve as Special Internet Counsel for the Delaware State Lottery and we represent the Interactive Gaming Council, a non-profit organization representing the interests of igaming companies around the globe.

Two characteristics uniquely qualify Ifrah Law to represent igaming companies:

Our substantial experience in both criminal defense and civil litigation. This is invaluable because even civil cases can expose igaming companies to criminal prosecution. We are litigators who know the risks and how to avoid them.

Our knowledge of the igaming industry and the people who work in it. We are a firm of lawyers who share a passion for understanding our clients and their businesses. Through our representation of igaming businesses over a number of years, we have acquired an in-depth understanding of the industry. That understanding is the key to our ability to craft solutions that meet our client’s goals.

Click below for an overview of how online gaming operators can take advantage of the new online gaming opportunity in New Jersey.

 

Ifrah Law Wins Dismissal In PokerStars Class Action

When faced with an attempted class action in the plaintiff-friendly Southern District of Illinois, PokerStars turned to Ifrah Law to defend them. Not only did this case pose the risk of a multi-million dollar hit to PokerStars, but a money judgment would have opened the door for related class actions against online poker operators offering services without a license.

The plaintiffs filed the suit under the Illinois Loss Recovery Act, which allows individuals to collect losses on behalf of third parties, providing third parties fail to make their own claim within six months of losing the wager. Ifrah successfully argued that PokerStars was not liable. The court agreed with Ifrah, stating that PokerStars served as a third part service provider – only providing the forum for others to play and does not have stake decided in how the game plays out.

The Judge’s decision in this case was monumental for the online gaming industry and likely closed the door on future class actions against PokerStars. Further, this case provides precedent for other class actions that may arise against online gaming operators.

(Kelly Sonnenberg v. Oldford Group, Ltd., and Rational Entertainment Enterprises, Ltd. (No. 13-0344-Drh) (S.D. Il.))

 

Negotiating an Historic Agreement between the Department of Justice, PokerStars and Full Tilt Poker

 

Leading a First-of-its-Kind Battle to Block the Seizure of Domain Names

When the state of Kentucky went to court to try to seize the domain names of 141 Internet gambling sites, it was a shot across the bow of Internet companies around the world. If the state’s lawsuit – the first of its kind anywhere – was successful in bringing about the forfeiture of the domain names, the consequences would be severe for both Internet commerce and civil liberties.

At an initial court hearing attended only by the state’s lawyers, without notice to the owners of the domain names, the judge concluded that the websites were violating Kentucky’s gambling laws. The judge ordered the domains to be seized and their ownership transferred to the state.

When it got word of what happened, the Interactive Gaming Council – the organization that represented the owners of 61 of the domain names at issue in the case – turned to Jeff Ifrah for help. As a host of other organizations – including trade associations and civil liberties groups – mobilized to join in fighting the judge’s order, Jeff became lead counsel, coordinating the legal challenge to the seizures.

Not surprisingly, the judge turned down their request that he reverse his own order. Convinced the order was unlawful, Jeff led the defense team in taking the case to the Kentucky Court of Appeals. There, Jeff persuaded the Court of Appeals to rule that the judge exceeded his jurisdiction. The Court of Appeals ordered that the seizures be blocked.

The state appealed that ruling to the Kentucky Supreme Court, where Jeff continued to fight the forfeiture. The appeal raised significant legal issues never before decided by the court, including whether a domain name can be considered property that is subject to seizure under Kentucky law and whether a domain name can be considered a gambling device under the law.

In the end, the Supreme Court sidestepped these important questions. Instead, it ruled that the case was not properly before it because of a legal technicality. But the end of the appeal was not the end of the case. Litigation continues with Kentucky state officials. While the final outcome of the case remains to be seen, its significance will be felt throughout the Internet gaming industry.

(Commonwealth of Kentucky ex rel. J. Michael Brown, Secretary, Justice and Public Safety Cabinet v. 141 Internet Domain Names – Civil Action No.: 08-CI-1409 (Commonwealth of Kentucky, Franklin Circuit Court, Division II))

 

Obtaining Dismissal of Fraud Claims Against Online Gambling

In the first class action suit brought by former U.S. poker players, Ifrah Law went all in and won a big pot on behalf of an online poker company and individual poker pros that were defendants.

The suit involved complex fraud issues arising out of claims of Racketeer Influenced and Corrupt Organizations Act (RICO) violations. These issues resulted from the plaintiff’s demand for return of U.S. player funds held in online gambler accounts after Black Friday. On that day in 2011, the U.S. government shut down the three most popular online poker sites. More than two million citizens were playing our national card game online, and they were confronted by the seals of the FBI and Department of Justice and a notice of domain name seizure as well as blocked access to each player’s account balance.

The lawsuit demanded return of plaintiff’s money under a conversion claim, and also accused the defendants of racketeering, which would have entitled the plaintiffs to three times the damages owed.

In a closely watched argument in the U.S. District Court for the Southern District of New York, Ifrah Law held all the right cards and won a dismissal of all claims against the poker pro defendants, as well as all RICO claims against the corporate defendants. The
judge’s order was a big win for the individual defendants in this case, but also a victory
for individual defendants in other class action cases pending in New York.

(Segal et al v Bitar et al. 1:11-cv-04521-LBS (S.D.N.Y.))

 

Representing an Online Poker Operator in Nevada Federal Court

When a leading online poker company was sued in Nevada by a prominent poker professional and former company endorser, the company put all their chips on the experience of Ifrah Law.

The plaintiff was one of the first women to place highly in a poker tournament. She claimed that during the online company’s early years she was offered a one percent ownership in the firm in exchange for her promotional efforts as a “celebrity player.”

She also claimed that the ownership stake was worth $100,000 a month for every month that the company was making distributions. She sued for breach of contract, breach of fiduciary duty, breach of the covenant of good faith and fair dealing, unjust enrichment, and fraud. Her attorneys estimated damages to be $40 million, with the additional possibility of punitive damages.

Ifrah Law won a dismissal in the trial – and won three more move to dismiss orders in subsequent actions. The initial motion to dismiss contained allegations that the player’s “typhoon of litigation” was fueled by a “thirst for publicity.”

(Cycalona Gowen v. Tiltware LLC, et al. – Case No.: 2:08-CV-01581-RCJ-RJJ (United States District Court for the District of Nevada))

 

Obtaining a Historic Settlement with the Department of Justice

When the U.S. government seizes assets and funds, they are normally not very sympathetic or predisposed to giving any of it back. But in a case against a payment processing company, federal authorities in Maryland seized over $2 million of alleged
illegal proceeds in connection with investigation of illegal sports betting – and Ifrah Law helped get half of it back.

In claiming it was a front for the gambling industry, the Department of Justice was very aggressive in seizing the payment processor’s assets in California. But Ifrah law conducted a very precise forensic investigation and demonstrated to the government
that over 50 percent of the company’s proceeds were from legal, legitimate sources. We successfully argued that the scope of the seizure was overly broad.

In a result that is still turning heads in the legal industry, Ifrah Law obtained the first settlement on record where the Department of Justice agreed to refund over $1 million of proceeds that were initially represented to Court as illegal proceeds.

(United States v. Contents of Various Accounts, etc., Case No. CCB-10-774 (U.S. District Court, District of Maryland))

 

iGaming News from Ifrah Law’s CrimeInTheSuites.com, Volume 2

iGaming News from Ifrah Law’s CrimeInTheSuites.com, Volume 1