Thursday, January 25, 2007

A Game of Incomplete Information

“Poker is a game of incomplete information.”

That’s from Harrington on Hold ’em, of course. Harrington’s quote about the game of poker seems highly applicable to the current state of online poker in America, generally speaking. Americans who play online poker today find themselves confronted with a constant stream of incomplete information. We are unsure about the future processes by which we will transfer money to and from poker sites. We are unsure about the integrity of certain sites and the alternatives to Neteller we are having to explore. We are even unsure about how best to proceed in the fight to save online poker (e.g., witness forum debates about the efficacy of joining the Poker Players Alliance). Compounding everything, falsehoods about the current status of the UIGEA continue to be perpetrated as well.

Here’s a quick list of a few of the areas where online poker players currently find themselves receiving incomplete information:

About online poker sites

A couple of posts back I complained about how the poker sites on which I play seemed as though they were being less than forthright with me about a certain aspect of their operations. My question concerned how exactly each site managed the money in players’ accounts -- by no means a question of great urgency for me, but an indicator of sorts of how the climate of information-sharing has changed since the passage of the UIGEA last October. Whereas before sites saw it needful to be as transparent as possible with customers regarding such issues, such openness no longer appears to be the case.

The most recent episode of the poker podcast Rounders (1/21/07) featured an interview that seemed to confirm what I was trying to say in that post. Mike Johnson and Adam Schwartz interviewed a person named Chris -- an executive at Cake Poker, a relatively-new poker site that currently hosts a modest number of players. Chris was a thoughtful commentator on the situation (even if we didn’t learn his last name -- more incomplete information!). Speaking of one effect the legislation has had, Chris said “It’s kind of futile, what they’re trying to do, because it is just going to push . . . [the online poker industry] underground. It was gaining some respectability and some, you know, official acceptance and recognition, especially when they [were] publicly listed companies. Now . . . nobody can go public. Now they all have be go private, and there’s no due diligence out there right now when you see . . . you know, at least Neteller would release their public records. At least PartyGaming would release their public records, their earnings, what they were spending, those kinds of things. Now you just have to trust what a company says again. It goes back to the way it was in 1999 and 2000, almost.”

Co-host Schwartz pointed out how a couple of sites operating then made off with players’ money. “A couple did,” acknowledged Chris. “And in the end, this [i.e., the unlikelihood of sites cheating customers] was the good thing [about online poker, because] it was starting to get acceptance and recognition . . . that’s the worst part, now [i.e., that such transparency is no longer the case].”

About third-party vendors

Unlike a lot of Americans who play online poker, I am not currently exploring ways to withdraw my money from any of the sites on which I play. Those who are have encountered a lot of difficulty -- particularly if attempting to move money to or from Neteller. I’ve read and heard stories about various problems encountered by players attempting to transfer funds, to use their Neteller debit cards, to contact customer service, and so forth.

Granted, forum threads aren’t always the most reliable place to research the situation -- amid the reports of players’ woes, I’m also see mind-boggling speculation that the DOJ may next seize funds in Neteller accounts. Can’t really imagine that as a possibility, but such worries aren’t entirely out of hand, I suppose, given the present state of uncertainty. We hear about ePassporte being a suitable alternative for Neteller, but we also hear about the company’s low rating (an “F”) from the Better Business Bureau. As I mentioned before, it is very difficult to play this here hand confidently until more information becomes available.

About the Poker Players Alliance

I am a member of the PPA. I sent in my dues, received my T-shirt and pin, and support their efforts. However, many online poker players are skeptical about the organization’s ability to represent online poker players’ needs and concerns, never mind actually help counter the effects of the UIGEA on online poker. In Two Plus Two’s statement regarding the PPA -- available here -- an outside law firm hired to review and analyze the PPA concluded they did “not believe Two Plus Two can actively encourage the financial support of the PPA because of the organization[’]s lack of transparency.” In other words, the chief criticism here appears to be incomplete information about how exactly the PPA operates. (EDIT [added 2/1/07]: On January 29th, The Poker Players Alliance posted a copy of its 990 form for 2005, fully disclosing its use of members' fees.]

I have to admit I have not read through all of Two Plus Two’s statement, nor have I followed up on either of the lengthy threads it engendered (available here and here). Perhaps in part because I haven’t read through the criticisms, I remain optimistic about the PPA and its future plans. I find PPA President Michael Bolcerek’s statement on “The State of Poker” (issued earlier this week) somewhat encouraging. Though, of course, I admit that here, as elsewhere, I am only operating on partial, incomplete information.

About the Unlawful Internet Gambling Enforcement Act

Finally -- why do people keep talking about waiting 270 days until the UIGEA goes into effect? The UIGEA is in effect -- it became law on October 13, 2006 when the bill was signed by President Bush. Yet I keep reading and hearing people who theoretically know something about online poker claiming the law doesn’t really mean anything until this summer. Fred Mourey, the host of Joe Average Poker, has made this mistake about once per show since October. On the 1/16/07 episode, he again asked co-hosts Robin Farley and Charlie Knox to confirm his understanding. “The actual legislation still has not gone into effect, right?” he asked. “No,” answered Farley, “I believe that’s on July 10th . . . that’s the final date the banks have . . . .”

There was an equally frustrating conversation about the Neteller situation and the UIGEA on The Circuit this week (during the 1/21/07 episode). According to guest co-host Jon Friedberg, “there is a 270-day grace period from the day the bill got signed which I think was early November, or late October or something . . . ? So there’s still a good, you know, six, seven months or whatever that time frame is that Neteller and the U.S. financial institutions are legally allowed to continue conducting transactions . . . .” “Right,” agreed host Konan Luce.

Wrong. Among other things, the Act outlines how “designated payment systems” and “financial transaction providers” (meaning banks, credit card companies, or any other money transfer system) have been given 270 days from the date the bill is signed to implement measures to stop money from going to online gambling sites. To be even more specific, federal regulators have been given those 270 days to forward to banks, credit card companies, and money transfer systems guidelines for policing against transactions related to online gambling. (Whether such guidelines will be delivered on time is unclear.) In other words, there is no “grace period” here. The law is in effect. Anyone breaking the law after October 13, 2006 is at risk of being prosecuted. (Unless the law is repealed or amended, that is.)

“How much information is hidden and how much is available greatly affects the interest and playability of a game,” says Harrington. About sums it up, I’d say.

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