Opponents of legalizing online poker have cited a number of reasons for their resistance, including a moral objection to gambling and the dangers of giving addicts a constant, easily accessible alternative to brick-and-mortar casinos, where other safeguards could be in place.
But one Florida man has spent the past eight years on a personal mission to expose what he views as the greatest danger of online poker websites: the potential for money laundering by criminals and terrorists.
Software engineer Jim Thackston’s crusade began in November 2004, when he noticed his nephew playing online poker against someone from London.
“The first thought in my head was, what an interesting way to move money,” Thackston recalled.
Thackston began researching ways in which criminals and money launderers could use the sites to move money across international borders without being detected. He soon found that neither the government nor the online poker industry were focused on what he considered the serious threat of defined winners and losers prearranging to play at the same Internet table.
“The problem with their anti-collusion techniques is that they’re geared toward finding cheaters rather than money launderers,” Thackston said.
He even set up a website providing instructions on how to defeat online poker’s built-in protections and launder money without detection. His work eventually got him the notice of the House Financial Services Committee, whose chairman at the time, Spencer Bachus, R-Ala., was a staunch opponent of online gambling. It also drew notice from the Tampa field office of the FBI, which asked him to take down what were essentially step-by-step instructions for Internet money laundering.
Thackston has since been in contact with gaming authorities in New Jersey and other places, and his concerns have been recognized as legitimate by the FBI’s Cyber Division, which acknowledged in a 2009 letter to Bachus that online poker sites could indeed be used by criminals to transfer ill-gotten gains.
Thackston’s concerns were also among the justifications used by law enforcement authorities following the subsequent shutdown of the online poker industry in 2011. The government went so far as to label one major poker site a Ponzi scheme that transferred money from players to the site’s founders.
While online poker is now only legal in Nevada, Thackston said his concerns will re-appear with more states set to follow. He said Nevada’s population is likely too small to attract significant money laundering, but he warned that New Jersey’s offering may do so when it goes live later this year.
“There’s a fairly decent pool of liquidity in New Jersey. From math I’ve done, New Jersey could be the first [state poker website] where you could get actual money laundering,” Thackston said.
Rep. Elijah Cummings, D-Md., right, hugs Harold Schaitberger, General President of the International Association of Fire Fighters, after the Congressman spoke at the IAFF's Legislative Conference General Session at the Hyatt Regency on Capitol Hill, March 9, 2015. The day featured addresses by members of Congress and Vice President Joe Biden.