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Strikeforce Sponsor in Trouble as Government Attacks Online Poker

Yesterday, the Department of Justice seized the domains of the three largest online poker sites servicing U.S. customers - Poker Stars, Full Tilt Poker, and Absolute Poker.

The origins of the story can be traced back to late 2006, when a rider was attached to a bill on port security in the waning moments of Congressional legislation. The rider made it illegal to conduct financial transactions with businesses involved with Internet gambling.

It caused a minor crisis in the gambling community, but the dust eventually settled, and things continued, as Dana White would say, business as usual.

Now, despite insisting that playing on their sites breaks no laws, the major poker sites have suspended real money play for U.S. customers. Eleven people involved with the sites have been charged with violating U.S. gambling laws, and federal prosecutors are seeking to recover "at least $3 billion" stemming from money laundering chargers, according to Reuters.

The government's decision to attack these sites has a myriad of indirect and unintended consequences, including taking money out of the MMA economy. Gambling sites are currently banned in the UFC (despite brief appearances in 2008-2009), but Full Tilt Poker has been a major sponsor for Strikeforce, appearing on both the cage canvas and the shorts of a majority of Strikeforce's fighters. The Full Tilt logo also had a presence in many of the regional promotions across North America.

MMA agent Ken Pavia explained the impact to MMA Junkie:

"The online poker companies don't have a complete handle on it at this time, but they're doing their due diligence to find out what the full impact is," Pavia said. "In the short-term, it will severely impact fighters' sponsor revenue, which traditionally matched their show pay for our televised clients. I would venture to say the poker industry is equal to apparel industry as the No. 1 sponsor of fighters outside the UFC."

The article later quotes Jason Genet, who explains that the sponsorships are for companies' .net domains. The distinction being that the .net are for "educational" and "entertainment" purposes only, and do not offer real money play. That being said, it takes no stretch of the imagination to conclude that these sites were created to bypass advertising restrictions. (Though I should note that these sites have not been seized by the government.)

Regardless of the distinction, it's hard to imagine Full Tilt Poker continuing to throw money at promotions and fighters without a customer base in this country.