Casino City – A special agent with the Nevada Gaming Control Board infiltrated a Bitcoin-fueled poker website to help launch what authorities on Tuesday said was the first state-level criminal prosecution of illegal online poker.
“The industry must be licensed and controlled,” Attorney General Adam Laxalt said at a news conference, while flanked by A.G. Burnett, chairman of the Nevada State Gaming Control Board, and Tony Alamo, chairman of the Nevada Gaming Commission.
An arrest warrant was issued against Bryan Micon, 36, in Las Vegas Justice Court on Monday on one count of operating an unlicensed interactive gaming system.
Laxalt added that the charge, which carries a penalty of up to 10 years in prison and a $50,000 fine, marks the first prosecution of a poker site that used the digital currency.
“Defending Nevada’s worldwide reputation as the gold standard of gaming integrity is a paramount concern to tens of thousands of Nevadans employed by the industry and the 41 million tourists who visit the state each year,” Laxalt said.
Court papers filed Monday state that Micon operated Seals with Clubs, which accepted Bitcoin digital currency, between March 1, 2014 and Feb. 9, 2015 “without first procuring and thereafter maintaining in effect the required licenses.”
The Gaming Control Board first learned of Seals with Clubs in August 2013, when a Belgian resident complained about the site, according to an affidavit for arrest.
In Skype conversations observed by gaming agents, Micon estimated that Seals with Clubs earned $10,000 to $12,000 profit each month. Authorities at the news conference declined to say how much of the digital currency was regularly wagered on the site.
Agent Ricardo Lopez created an account on the site in early February 2014 and used digital currency to start playing poker on the site the next month.
“I placed bets using my chips, and won some hands while losing others,” Lopez wrote, noting that the site had taken a rake, or a percentage of the pot from certain hands. “I had successfully purchased Bitcoin using U.S. currency and then gambled the Bitcoin on the website sealswithclubs.eu on two separate dates for a total of 30 hands of poker.”
Lopez compared the Bitcoin transaction to purchasing chips at a casino cage and gambling with the chips at a poker table.