Top 10 Online Poker Stories of 2007 (2 of 2)

Mentioned last post how these silly lists seem to proliferate with higher than usual frequency once we near year’s end. For example, last night I caught a bit of a program called “VH1’s 100 Greatest Songs of the 90’s.” Ugh. What a miserable decade, music-wise. I doubt there are a hundred songs total from that period I could recommend without qualification. I guess I’ll take the Breeders’ “Cannonball” (#83) and maybe Beck’s “Loser” (#22) (although he’s done much better). You can have the rest.

I also mentioned previously how subjective this here list necessarily is. Besides reflecting my own personal interests, the stories that made it are more or less American-centric as well. Thus are legal concerns especially prominent here in the upper half of the list.

5. The Growth of the Poker Players Alliance

Most of us first started hearing about the Poker Players Alliance a year or so ago, shortly after the UIGEA passed. Some of us even joined up. At the start of 2007, the PPA boasted somewhere in the neighborhood of 135,000 members -- probably ten times the number they had in early 2006, but a far cry from what was needed to become a truly effective lobbying organization. As of the moment I published this post, the PPA claims its membership to stand at a grand total of 845,884. Still not NRA-type numbers (i.e., four million-plus), but definitely a number that has some chance of getting lawmakers’ attention.

In February the PPA appointed local “officers” in each state to help organize members. Then in March former Senator Alphonse D’Amato was brought aboard to serve as a spokesperson. I wrote a post around that time evaluating D’Amato’s effectiveness as someone charged with articulating the PPA’s various messages. (I wasn’t entirely laudatory.) I also wrote another post in April in which I speculated a bit about the PPA as a whole.

The emergence of various proposed legislation over the spring and summer served to focus the PPA’s efforts somewhat. Several PPA-sponsored visits to Capitol Hill took place during the course of the year, and the PPA’s presence was also felt at two different House hearings on internet gambling (in June and in November).

Not everyone in the poker community is equally convinced the non-profit organization (now led by Exective Director John Pappas) is itself entirely free from external political pressures as it pursues its mission to defend poker players’ rights. In any event, the PPA’s growth into a legitimate lobbying organization most certainly should be regarded as a significant development by Americans (and even non-Americans) who play online poker.

4. Barney Frank Introduces the IGREA

As early as February, we were starting to hear that some House representative might be about to introduce legislation designed to counter the effects of the UIGEA. Rep. Barney Frank’s (D-MA) name was the one most often mentioned. Frank had already well established himself as an opponent of the UIGEA, and in fact had appeared on the Pocket Fives podcast during the spring of 2006 to speak out against ongoing efforts to make online gambling illegal. I wrote a post in February -- “The Frank Approach” -- in which I tried to anticipate what sort of legislative strategy might be used to combat the UIGEA. Wrote another in March inspired in part by Frank’s comments that he and others were still in the “thinking stage” as far as new legislation went. Finally, on April 26, 2007, Frank introduced his bill, called the Internet Gambling Regulation and Enforcement Act (H.R. 2046).

Rather than repeal the UIGEA, the IGREA (if passed) would essentially supplant the UIGEA, rendering the former bill utterly ineffectual. Frank’s bill essentially outlines a licensing program whereby sites would apply for the right to offer online gambling, rights that would only be granted if those sites followed a number of specific provisions. I discussed the ins and outs of Frank’s bill at length in a post in May, titled “The Idea of IGREA.”

Soon after it was proposed, Frank’s bill only attracted a dozen or so co-signers. The latest count shows the bill having 45 co-signers, although that list includes the late Julia Carson (D-IN), who sadly passed away last week. That’s out of 435 members -- still a hell of a long way to go before it would be reasonable to bring the bill up for a vote in the House (and then go to the Senate, and then avoid a veto by the President). Even so -- as I’ve said here before -- whether or not the IGREA (or any of the other bills that have been proposed) gets anywhere, I do think the debates Frank’s bill has provoked have been considerably beneficial to those hoping to protect Americans’ rights to play online poker.

3. Neteller Suspends Services to U.S. Customers

On October 19, 2006, Neteller -- at the time the single most popular means of transferring money to and from online poker sites for American players -- announced its intention to comply with the Unlawful Internet Gambling Enforcement Act which had been signed into law the week before. In a press release Neteller noted that even though they are located outside the U.S. they would nevertheless “comply with the Act and its related regulations as if it were subject to the Act’s jurisdiction.”

All was more or less well for a couple of months, then on January 15, 2007, former Neteller executives and founders Steve Lawrence and John Lefebvre were arrested and charged with laundering conspiracy. The next day, shares of Neteller stock were suspended from trading on the London Stock Exchange. Then late the following day -- January 17th -- Neteller announced that “due to recent U.S. legislative changes and events, effective immediately, U.S. members are no longer able to transfer funds to or from any online gambling sites.”

While the arrests weren’t related to the UIGEA -- indeed, not a single arrest has been made yet for anyone violating the terms of that law -- it is clear the existence of the Act helped create conditions to pressure Neteller to withdraw from the U.S., just as it had with PartyPoker and all of the other online poker sites not subject to the Act’s jurisdiction. I wrote one post back in January, “Playing Without a (Net)eller” -- which discussed the situation and tried to anticipate a few of the consequences of not being able to fund online poker accounts. One consequence I didn’t foresee at the time was how long it would take Americans to get their frozen funds back -- about seven-and-a-half months, it turned out. Since January most Americans have found somewhat functional alternatives to Neteller, but online poker clearly hasn’t been the same since the financial transaction provider made its hasty exit.

2. Absolute Poker Cheating Scandal

Was mid-September when we first started to hear the initial rumblings associated with this one. Some dude had won the 9/12/07 $100K Guarantee over on Absolute Poker having called a huge turn bet with just ten-high. Sounded like the winner had somehow been able to see the loser’s hole cards, although at the time that seemed too fantastic to be true. I wrote a post a couple of weeks after the event speculating perhaps the site had been hacked into from the outside. Still, even then, theories were beginning to be advanced regarding an “inside job.”

Then in October, thanks to the efforts of a number of shamus-types (and a mistakenly emailed Excel file from Absolute), the case broke wide open. It became clear that not only had cheating occurred, it had been very likely perpetrated by individuals managing the day-to-day operations of the site. Absolute’s piss-poor handling of the matter only exacerbated the situation. Their “announcements” came intermittently and via strange sources (e.g., Mark Seif’s personal Bluff blog, forum posts made by individuals not associated with AP, emails sent to select individuals). Absolute initially denied any cheating occurred, then admitted something had happened, then spoke of an audit being conducted by Gaming Associates on behalf of the Kahnawake Gaming Commission.

Wrote one lengthy post back on 10/19 -- “Absolute Crap” -- that provides more details, as do these three follow-ups, “Would You Like to Leave Absolute Poker?,” “World Upside Down,” and “Update on the Updates.”

Speaking of updates, findings from that audit were due on December 7th, although we’ve yet to hear anything about what the Gaming Commission found. Meanwhile, the KGC no longer lists Absolute Poker among its list of “gaming operations that hold a valid and subsisting permit issued by the Kahnawake Gaming Commission.” Until very recently, AP had continued to list KGC as having licensed their operations; today, AP describes themselves as “undergoing a licensing process” with the KGC.

All of which means for the person currently playing on Absolute Poker, he or she is playing on a site with absolutely no third-party assurances that the games are “fair and honest to the player” and/or “all winners are paid.” Of course, given the current state of affairs in online poker (i.e., no regulation), no site is obligated to provide such assurances. A situation that is helped in no discernable way by . . .

1. The Unlawful Internet Gambling Enforcement Act of 2006

Like mold creeping around an unkempt shower stall, the UIGEA spent 2007 slowly inching its way toward actually being enforced. Back in July we marked the passing of the much-cited “270 day period” that began the day the UIGEA was signed into law by President Bush back in October 2006. Wrote a post then to mark that occasion, then another one in October when the Board of Governors of the Federal Reserve System finally forwarded those regulations about three months after the original due date.

The so-called “commenting period” on the regulations ended last week, and now we find ourselves waiting through another period of reevaluation (likely to last another 180 days) until the finalization of the regs. Meaning that barring any other legislative happenings, the UIGEA may well begin to be enforced sometime next summer. Meanwhile, some banks might well go the “overblocking” route and start forbidding clients’ transactions with businesses that appear in violation of the UIGEA, whether or not those businesses really are, an issue I wrote a bit about back in November.

Some may regard the UIGEA a story from 2006, not 2007. Seems clear to me, though, that just about every other story on this here top ten came about either directly or indirectly because of the existence of this yet-to-be-enforced law. So atop the list it goes.