Here Comes the Flood: Newsweek on Online Poker

A long cover feature about online poker from the latest issue of Newsweek became available online this morning, and it has already captured a lot of attention in the poker world. Titled “How Washington Opened the Floodgates to Online Poker, Dealing Parents a Bad Hand,” the article reviews recent legislative history regarding online poker in the U.S. while advancing a view that the current, nascent era of state-by-state legalization heralds a potentially negative future.

Most in peril are the youth of America, as emphasized by the cover image of a young boy holding an iPad with a poker hand displayed. There’s perhaps a humorous incongruity between his rueful look and the royal flush he “holds.” In any case, it’s not a subtle image. Nor is the article that subtle when it comes to tipping its hand (so to speak) with regard to online gambling.

The author is Leah McGrath Goodman who earned some notoreity back in March of this year after writing another cover story purporting to identify the inventor of Bitcoin by name -- a pretty big scoop given the fact that his identity had been previously hidden. The outing of Dorian Nakamato as Bitcoin inventor “Satoshi Nakamoto” spurred debates about ethics in journalism, then the adamant denial by Nakamoto to the Associated Press that he was the inventor of Bitcoin fueled further controversy. (Another person claiming to be “Satoshi” later denied he was Dorian.) While Newsweek stood behind the article, the question of the founder’s identity remains uncertain.

I mention that earlier article because part of the resulting backlash against it involved the Bitcoin community being critical of Goodman’s understanding of the cryptocurrency, as well as Goodman lashing back on her Facebook page at the “fanatical Bitcoiners” whom she said “will see this all in a different light once they reach puberty.”

In her new article, Goodman again comments at length on a subculture that includes a number of passionate defenders, even if none of them is represented in her piece.

Goodman speaks to a law professor who opposes the Department of Justice’s Office of Legal Counsel’s undue influence over law enforcement, a Republican member of the House from Utah who oppposes online gambling, a professor of child psychology and psychiatry who warns of 18-to-25-year-olds’ susceptibility to gambling addiction and who has knowledge of an instance of an underaged player losing money playing poker online, a psychiatry professor researching addiction who likens gambling disorders to substance abuse, and the executive director of the National Council of Problem Gambling who expresses similar concern about gambling addiction.

The article begins with a summary of the memorandum by Virginia Seitz of the DOJ’s Office of Legal Counsel first made public in December 2011 that opined the Wire Act only applied to sports betting and not other forms of gambling, thus helping create conditions for certain states to consider and in a few cases pass online gambling bills.

The DOJ’s Office of Legal Counsel is further introduced in a dim light, starting with a winky parenthetical note referring to its writing “justifications of drones and waterboarding.” Then comes the law professor complaining about the Office of Legal Counsel’s opinions being “treated as legally binding,” followed by the Utah House member’s fears about online gambling “reaching all the states.” He, too, is concerned about the Office of Legal Counsel (“an office in the bowels of the DOJ”) having so much power. (Incidentally, no reference is made in the article to how the UIGEA became law.) The Congressman is also skeptical about geolocational technology and about preventing children from being able to gamble online.

Next comes the academics’ observations about gambling addiction, followed by an overview of the current status of legislative efforts regarding online gambling in the U.S. The last part of the article goes back to tell the story of how we got here, summarizing Black Friday, the subsequent settlements, and current efforts by lobbyists and those contributing to politicians’ campaigns with an interest in the online gambling issue (with a conspicuous lack of perspective regarding Sheldon Adelson).

While mostly letting others speak of the evils of online gambling, Goodman does frequently target both Seitz and President Obama, highlighting their connection via the Chicago law firm Sidley Austin where both have worked. We learn that Seitz has left the DOJ and is planning to rejoin Sidley Austin to practice law. Thus does discussion of the Sidley Austin firm having “expanded its deal-making practice in the gambling space, which now includes major markets in North America, Europe and Asia” indirectly -- and speciously -- suggest that Seitz might have had a personal motivation for promoting online gambling. (Goodman did speak to Seitz, too, who reminded the author that the memo she wrote was an opinion.)

Obama’s acceptance of contributions from the gambling industry is also given a lot of attention near the end of the article, again kind of indirectly (and weirdly) suggesting that the nation’s growing interest in passing online gambling legislation helps support a larger goal of the current administration.

Many of the points shared in the article involve issues with more nuance than the commentators suggest. For instance, the professor of child psychology and psychiatry tells of a college student describing to him the “general progression” some take with Facebook games in which they start out playing them “purely for fun,” then some go “to the next level, where it’s for fun and money,” then some of those move further to “where the fun has disappeared and they are doing it just for money.”

Cool story, bro, but hardly as representative as it is made to appear. Nor does it account for the many other factors that contribute as causes for gambling addiction. Nor does it acknowledge that Facebook games are not the same as the regulated forms online gambling currently available in three U.S. states. In other words, in this article it is essentially a non sequitur, although it might have been useful to share in a feature about social gaming.

Speaking of there only being three states on board at the moment, to say the “floodgates” have been opened in the U.S. with regard to online gambling is so far from being true it can only be understood as either (1) a lethargic reliance on clichéd language (one of two in the headline), or (2) propaganda. Three states have passed laws, and in none of them is online gambling thriving by any means. And only a few others are tentatively considering such laws (with very modest prospects), while many other states never will come close to considering such.

(And by the way, why are we highlighting poker in that headline and not other forms of gambling? Makes for a better photo?)

There’s a lot, then, that is potentially misleading here thanks to the article’s unapologetic bias, something that comes out again in the very last last line which also incidentally includes another obvious inaccuracy. Referring to the DOJ’s repayment of Full Tilt Poker players (I received mine in June), Goodman derisively alludes to “Americans who had money in their Full Tilt Poker accounts on Black Friday, even though at the time those people should have known it was illegal to gamble online in the U.S.”

It wasn’t, of course, illegal for Americans to play on Full Tilt Poker -- indeed if it were it seems preposterous to think the DOJ would bother to help facilitate the return of players’ funds. The snide comment reminds the reader of the perspective informing the entire article, one that instinctive elides gambling with other illicit and illegal activity, deserving of punishment not reward.

That’s not even one of the other “11 Serious Problems With Newsweek’s Weird Tirade Against Regulated Online Gambling” that Chris Grove has already compiled over at the Online Poker Report. Others are already chiming in, too, with articles and over Twitter. And Goodman is responding, occasionally sounding a lot like she did before when dismissing the “fanatical Bitcoiners” as too immature to share her own wise perspective:

I’ll cut Goodman a break and conclude that here she’s mostly intending to echo Lance Bradley’s criticism of her methodology with a facetiously imitative rejoinder. Even so, her response does remind us that by speaking in favor of online gambling -- or even just asking those who oppose it to clarify their positions -- you risk being labeled as in favor of exposing children to danger. Or being grouped with others who support morally dubious behaviors. Or worse.

To reply to “How Washington Opened the Floodgates to Online Poker, Dealing Parents a Bad Hand” with yet another cliché, I tempted just to call it fear-mongering. But I’ll end with a fear of my own, namely that many will read and agree with Goodman’s blinkered position about online gambling -- especially poker -- and thus be likely to dismiss those trying to point out its flaws as “fanatical,” too.