Kentucky Seeks Biggest Rake Back Deal Ever from Full Tilt Poker

Just yesterday I was drinking a soft drink, a bottle of Mello Yello wrapped in an “old-school”-ish label that looked a little like what was used when the drink was first introduced back in the late 70s. At one point I idly looked down at the “nutrition” information (those are scare quotes there) and noticed the disclaimer in bold letters above -- “CONTAINS NO JUICE.”

Being a poker player, these words had a pleasant ring to them. No one likes the “juice” -- i.e., the money taken out of buy-ins or the “rake” dragged by the house to run their games.

A little later in the day I started to hear a few rumblings about a lawsuit that had been filed by the Commonwealth of Kentucky against Full Tilt Poker a couple of weeks ago. That’s in addition to the rumblings of borborygmi in my stomach, of course.

(Took over four years to use that word in a post. Drawing from an experience working in a pediatric gastroenterologist’s office there. Maybe one day I’ll be able to use “hepatosplenomegaly.”)

Sounded like in this lawsuit the focus here was in fact on the “juice” or “rake” taken by Full Tilt from the games. I continued to listen.

This wasn’t the ongoing seizure-domain case that the Kentucky Supreme Court recently overturned (again) “due to the incapacity of domain names to contest their own seizure.” In that one, one of the defendants, a representative of True Poker (truepoker.com), has filed an affidavit saying that an employee of the company that owned the site (Yatahay Limited) is a member of the Interactive Media and Entertainment Gaming Association (iMEGA) and thus iMEGA does in fact technically have standing there to represent the defendants. The Kentucky Supreme Court is still brooding over that one.

Nor was this the story from just a couple of days ago about a federal grand jury in Manhattan investigating Full Tilt Poker and perhaps preparing to bring indictments against its owners over some sort of money-laundering violations. A lot that is being unsaid in that story thus far, although both Howard Lederer and Chris “Jesus” Ferguson were named as potential targets in the report.

No, this was something new. Another, novel legal tactic designed to bring down online poker in the U.S., it seemed. Shortly after those initial rumblings, the story broke in earnest -- I first saw it over on Poker News Daily. Indeed, in a complaint filed on March 25, 2010, Kentucky sued Full Tilt Poker for allowing its residents to play on the site.

And indeed, it’s about the rake. Kentucky wants its rake back. And then some.

The 14-page complaint begins with a characterization of “The Full Tilt Defendants” and what the Commonwealth believes they have done to deserve this legal action. Reference is made to an entity called “Pocket Kings Ltd” in Dublin, Ireland, which is said to have operated with “certain other unknown entities” to have “acted in concert in a joint venture to facilitate, host, operate, and profit from... Full Tilt Poker.” The arrangement is characterized as “a series of shell companies” that has been constructed “to conceal [the defendants’] identities and avoid their legal responsibilities.”

Then comes a long list of actions the Full Tilt Defendants “purposefully and knowingly” have done, mostly concerning hosting online poker games available to Kentucky residents -- 13,000 of them, as recently noted by iMEGA in the Kentucky Court of Appeals. And, importantly, having “take[n] a percentage of the amount bet, won or lost as the ‘rake,’ ‘take out’ or commission for hosting the poker games” for their own pecuniary gain.

Along the way, the actions of the Full Tilt Defendants are characterized as “tortuous.” That would mean purposefully circuitous, not causing torture or suffering (in other words, what Kentucky is trying to do to online poker players.)

Also, there is a sort of funny, comprehensive reference to the Kentucky players as “losers.” No, that’s not a comment on their poker skills, but a technical reference to KRS 372.020, that part of the state’s civil law that says if in a gambling wager “a person loses to another at one (1) time, or within twenty-four (24) hours, five dollars ($5) or more, or anything of that value” that person is entitled to recovering twice its value plus court costs and attorney’s fees. Accordingly, the Full Tilt Defendants are described as “winners” here.

But wait. KRS 372.040 adds that if “the loser” doesn’t sue “the winner” within six months “and prosecute the suit to recovery with due diligence, any other person may sue the winner and recover treble the value of the money or thing lost” plus court costs and attorney’s fees, if that suit is brought within five years of the wager/payment having occurred.

And that’s what is happening here. Since no one else has sued Full Tilt to get their rake back, Kentucky is doing it. They are suing to get that rake back for the period covering March 25, 2005 through March 25, 2009.

And yes, they want treble. And that means trouble.

Not just for Full Tilt, actually. The remainder of the complaint lists all of the other sites Kentucky intends to go after as well -- the “Other Unknown Defendants” who operate those other sites hosted by the contested domains in that other suit. “As the name and place of residence of the Unknown Defendants are discovered,” so goes the threat, “this Complaint with be amended accordingly.”

Wild stuff. No idea whether or not this suit has something going for it or if it “contains no juice” (so to speak). Not really sure how it is that Kentucky can sue to recover what Kentuckians lost to the rake. (Nor how they expect to go about computing that amount.) In any event, I can’t help but think that whatever happens with regard to the suit, it cannot possibly be good either for Full Tilt Poker or for online poker, generally speaking.

Put that with the impending June 1 deadline for banks to begin complying with the Unlawful Internet Gambling Enforcement Act of 2006, and I’m starting to hear a different sort of rumble -- that of U.S. players seriously contemplating removing their funds from their online poker accounts.

Such is online poker for Americans. Never mellow.

More Uncertainty: Legality and Online Poker

When it comes to “legal stuff” and online poker, I never feel entirely comfortable offering my opinions. Or even simply reporting what the hell is going on. I mean, I think I am a decent reader and even once in a while stumble on a good ideer or response to this or that. But when it comes to commenting confidently on this particular subject, my first instinct is usually to try to change it.

The fact is, current state and federal laws regarding online poker/gambling here in the U.S. are ambiguous at best, and the process by which new laws and regulations come to be is often also mysterious for most of us. Rarely does anything seem perfectly clear, and when it does, such moments of clarity are often frustratingly fleeting. There’s always an appeal, it seems. And an appeal of the appeal. And so forth. Never mind “running it twice.” These guys appear willing and able to run it a hundred times if they have to, with the rules changing each time along the way.

This week came a couple of stories regarding some of many ongoing legal machinations, neither of which necessarily offered any further clarity for us on this subject. Or comfort. One was a ruling from the Kentucky Supreme Court on the Commonwealth’s efforts to seize 141 domains hosting online gambling sites. Sounds like that one has turned the other way once again. For now, that is. (It’s always “for now.”)

If you recall, it was back in September 2008 that we first heard that a Circuit Court judge had granted Governor Steve Beshear’s order to “seize” the domains which hosted sites allowing Kentucky residents to gamble online. Seemed like a pretty obvious usurpation of authority, as though somehow Kentucky could rule the entire interwebs and take control of sites according to its own predilections.

A hearing was held the following month, and the Circuit Court ruled in favor of Beshear et al. If the offending domains didn’t start blocking Kentucky from accessing the sites they were hosting within 30 days, the domains would be forfeited to Kentucky. A “forfeiture hearing” was then scheduled, then delayed. Then the case wound up in the court of appeals, where it was determined Kentucky wasn’t king of the internet after all.

The sucker then went to the state’s Supreme Court -- an appeal of the appeal -- where it has been for the last long while. Finally, this week the Supreme Court ruled that, in fact, the ruling in the Court of Appeals didn’t hold “due to the incapacity of domain names to contest their own seizure.”

In other words, the owners of the domains -- who remained “anonymous registrants” and were represented by others -- have to come forward and defend themselves (says the Ky. Supreme Court). So the decision in the Court of Appeals has been reversed. (Full decision here.)

The Poker Players Alliance has commented, saying it “understands the technical nature of the decision” made by the Supreme Court, and that it “remains confident that, once that issue is cured, the Supreme Court” will see the light and uphold the previous decision of the Court of Appeals to deny Kentucky the right to seize the domains. I like the choice of metaphor there -- what we are looking at here is in fact an illness than needs to be “cured” before we can go forward.

Is this incurable, though? Who knows?

The other item of special note this week concerned House Representative Barney Frank (D-MA) telling PokerNews that he did not anticipate another delay would be granted for implementation of the final regulations of the Unlawful Internet Gambling Enforcement Act of 2006.

Another story that sounds, well, a little sick-making.

If you recall, those final regs were set to go into effect on December 1, 2009, but the feds granted six more months to consider other legislation, meaning the current deadline for U.S. banks and financial institutions to start blocking transactions with online gambling sites is now June 1, 2010.

Earlier this year, Rep. Jon Kyl (R-AZ) -- one of the first authors of the legislation that ultimately became the UIGEA -- decided to use his standing in the Senate to start blocking the President’s nominees to fill positions in the Treasury Department. Frank told PokerNews that Secretary of the Treasury Timothy Geithner has said he wouldn’t allow any further delays specifically because of Kyl’s tactics.

Frank remains confident, however, that even after compliance with the UIGEA becomes mandatory in June, its standing will be tenuous. “Once it goes into effect, banks are going to raise hell,” he told PN, anticipating the banks’ subsequent complaints will lead to the UIGEA’s repeal.

As I have written about numerous times here, even if the UIGEA is an ambiguous, murky law that probably couldn’t hold up to any court challenges, its going into effect is nevertheless going to have consequences on U.S. players of online poker, knocking many out of the game due to increased difficulties getting money onto the sites.

When I appeared on Lou Krieger’s “Keep Flopping Aces” podcast last month, he asked me what I thought would happen with regard to the UIGEA during 2010. I told him my sense was that I did not feel very confident that it would be repealed this year, nor did I think any other legislation would likely be passed.

By way of explanation, I said hoping for either a repeal or the passage of new legislation was sort of like pulling for a poor player in a poker tourney to win. He’d need a lot of breaks just to reach the final table, then still more examples of good timing and fortuitous cards to win in the end.

Of course, using that analogy served a particular purpose for me -- it enabled me to avoid speaking more particularly about things about which I have little clue.

In fact, I suspect most of us are essentially short-stacked when challenged to understand “legal stuff” and online poker.

Kentucky Still Hoping to Be Master of Your Domains

So you might have heard something yesterday about that Kentucky domain seizure case having popped up once again. With regard to the proverbial that, what, you might be wondering, is, as they say, up?

That purposefully murky-sounding lead is hopefully understood to be symbolic of the murkiness that surrounds this sorta-baffling-yet-undoubtedly-meaningful case. To review...

Back in October 2008 came a Franklin Circuit Court case between the Commonwealth of Kentucky (the plaintiff) -- represented in court by J. Michael Brown, Secretary of the Justice and Public Safety Cabinet and in the media by the state’s governor, Steve Beshear -- and “141 Internet Domain Names” (the defendants). In the case, Judge Thomas D. Wingate somewhat preposterously ruled in favor of the plaintiff, meaning those 141 sites needed to block access by Kentucky residents within 30 days or the domains would be forfeited to Kentucky, sort of like foreclosed homes or something. No shinola!

According to the ruling, if access wasn’t blocked, Kentucky got to take the domains on which the sites resided and do with them whatever they wanted. All of the domains were gambling related, and included several (but not all) online poker sites, including Absolute Poker, Bodog, Cake Poker, Doyle’s Room, Full Tilt Poker, PitBull Poker, PokerStars, Reefer Poker, UltimateBet, and others. In fact, both Cake and the Cereus network (Absolute and UB) immediately began blocking Kentucky residents’ access in response to the ruling.

That ruling was appealed, however, and after a few delays was heard in January 2009 at which time the Court of Appeals overturned the decision. Although that reversal cited multiple problems with the original case, the big one appeared to be the mistaken assumption that an internet website constituted a “gambling device” -- a technical requirement that is part of Kentucky’s anti-gambling law. The Commonwealth immediately responded by saying it planned to appeal the appeal -- this time taking the case to Kentucky’s Supreme Court. And that is what finally happened yesterday.

Incidentally, just before yesterday’s hearing, Full Tilt Poker went ahead and took their case to court in the U.K. -- where the domain registrar (Safenames) used by Full Tilt resides -- to settle the matter of whether or not Kentucky could seize its domain. The U.K. court ruled that since “Kentucky’s proceedings are not enforceable in English law,” Kentucky had no right to seize Full Tilt’s domain. The poker site hadn’t been sure whether or not Safenames would comply should Kentucky in fact win its case, and so went ahead with the preemptive measure.

Am assuming, then, that while fulltiltpoker.com continues to be included among the 141 domains at issue here, if it turns out there is some sort of reversal of the reversal by the Kentucky Supreme Court, Full Tilt Poker is already set to keep its domain from being seized even if it continues to allow Kentuckians’ access.

I watched yesterday’s hearing, which lasted an hour-and-a-half or so. You can watch it, too, if you are interested. You can find an embedded video of it over at Pokerati by clicking here. To the left there is a shot of one of the judges scratching his head while listening to the testimony. Indeed, the whole sucker is most certainly a head-scratcher.

The fun began with the hilarious Eric Lycan, the attorney representing the Commonwealth’s side, pointing out how none of the owners of the sites hosted on the domains were present in the courtroom, further speculating that they preferred to remain in hiding, operating from afar their “illegal gambling trade associations.” I kid, of course. The dude was as humorless as one would expect.

Lycan then offered various, also unfunny analogies between the situation being discussed and that posed by drug trafficking and pornography. (He’d eventually mention human trafficking later on while making a point as well!)

The judges didn’t really seem to buy any of those comparisons, noting that the Court of Appeals had said the domains were “intangible property” when denying they could be regarded as “gambling devices.” The judges also questioned why the seizure of the domains was needed here. Why not, instead of trying (vainly?) to make the domains inaccessible to the entire world, simply block access in Kentucky?

That was a strategy also suggested by those representing the 141 domains -- Bill Johnson (representing Sportsbook.com), Jon Fleischaker (iMEGA), and John Tate (VicsBingo.com, Interactive Gaming Council). The Commonwealth could have tried to make online gambling illegal if they wished, they argued, but have instead adopted this less direct, less sincere approach that tries to skirt the usual legislative process. The Commonwealth “had no subject matter jurisdiction,” they said, and so Judge Wingate should have immediately dismissed the case.

It should be noted that the good guys were just as humorless as Lycan. Indeed, they were appalled, and made that feeling clear throughout. Although I have to admit I did smile for a moment when Tate noted that he represented VicsBingo. Such a silly word -- “bingo” -- to be uttered so earnestly there in the Supreme Court.

Lycan got one last say before the hearing concluded, and he reiterated the Commonwealth’s view that the operators of the sites are the “real criminals,” adding that every bet in every poker game represents a “contractual obligation,” and, since these contractual obligations were involving Kentucky residents, the state’s law against operating gambling was being broken here.

Apparently there will be a lengthy wait before we discover what the judges ultimately thought of the respective arguments, as a decision is not expected to be handed down for 2-4 months. The Commonwealth’s case remains mighty sketchy, and it continues to appear as though if it weren’t for one curiously-oriented circuit judge (Wingate), this thing would’ve never gotten as far as it has.

But as long as the case remains alive, there remains still another layer of uncertainty with regard to the fate of online poker here in the “land of the free.”

Kentucky Not King of Internet After All

Remember that case in Kentucky a couple of months back involving the seizure of 141 domains hosting online gambling sites? The one in which Franklin Circuit Court Judge Thomas D. Wingate ruled -- incredibly -- that the Commonwealth of Kentucky was justified in requiring those sites to block access by Kentucky residents or risk forfeiting the domains? And a few of them -- including the Cereus network and Cake Poker -- went ahead and did just that?

Last we heard, that decision had been appealed. This afternoon came the decision, and by a 2-1 vote among the three judges hearing it, the appeal was granted.

The Court of Appeals’ ruling does mention the jurisdiction question, but it appears it was the argument that a domain name was a “gambling device” that ultimately sunk the original decision. Reading through the judges’ explanation for why that argument is insufficient, you can just sense the judges -- at least the two who were in the majority here -- shaking their heads at the faulty logic that enabled Judge Wingate to arrive at such a weak conclusion:

“Suffice it to say that given the exhaustive argument both in brief and oral form as to the nature of an Internet domain name, it stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a ‘machine or any mechanical or other device... designed and manufactured primarily for use in connection with gambling.’ We are thus convinced that the trial court clearly erred in concluding that the domain names can be construed to be gambling devices subject to forfeiture....”

And that is that. As the judges say, “Because we have concluded that petitioners are entitled relief on the above-stated basis, we decline to address other issues presented in the briefs and/or argued at oral argument.”

If you recall, the bulk of that decision (about three-fourths of the 44-page document) was taken up with a long “Discussion of the Issues.” (I summarized most of that original decision here.) That “Discussion” included the whole “gambling device” claim, but also touched on all manner of other issues, too, including arguments justifying Kentucky’s jurisdiction over the 141 domain names.

There was also a section in there addressing the question of whether poker is indeed gambling. With regard to that latter issue, Judge Wingate had determined that since “in the end, no matter how skillful or cunning the player, who wins and who loses is determined by the hands the players hold,” poker was indeed gambling.

But, like I say, the judges here aren’t bothering with any of that.

The judges do add a few parting shots, too, in the decision. One of the consenting judges explains how he’d also have granted the appeal since circumstances for the forfeiture of the domains weren’t met. And the dissenting judge also throws in his two cents regarding the “gambling device” question, weakly arguing that since computers are built by humans, and humans also write the software, we can therefore consider the whole kit-and-kaboodle a “device” and thus regard it as such in legal contexts. Luckily his two colleagues thought otherwise.

This ruling will be appealed, too (in the Kentucky Supreme Court). And I suppose anything could happen there, but it seems pretty doubtful this one is gonna get reversed yet again.

Good news for online poker players in Kentucky, then, as well as for those in other states, too, where similar seizure-type action might’ve been tried had this one not been successfully thwarted.

Catching Up (Various & Sundries)

Spent some time yesterday updating my list of subscribed-to blogs over in Bloglines. There had been a few blogs in the blogroll (see lower right-hand column) that I had yet to add. Although there are a couple of folks listed down there who’ve gone a few months without posting, most all of those listed are active. And worth yr while!

I generally check in on Bloglines a few times a day, and that’s where I get most of my poker-related news. I’ll stop by a few additional sites, and will peruse a couple of the forums to see what else is going on, but the blogs are generally my primary source of pokery info.

There have been a few items in the news since the World Series of Poker Main Event finally wrapped up a week ago, dominated, of course, by that little bit of unpleasantness regarding the finalization of the regulations for the Unlawful Internet Gambling Enforcement Act of 2006. I continue to see the actual significance of that being debated in various places on the web. Another bit of news stemming from that was that the Poker Players Alliance is presently contemplating a lawsuit against the federal government over the UIGEA. PPA Chairman Alfonse D’Amato emailed members regarding the suit, and yesterday the organization began contacting those who had expressed interest in perhaps participating in such a suit.

You probably noticed that the much-anticipated 60 Minutes segment reporting the Absolute Poker-UltimateBet insider cheating scandals (and whatever else might come up in the context of that report) did not air on November 9th as it had been reported that it would. Nor did it air last Sunday.

The segment was originally set to air on October 26th, but got bumped in favor of a segment on the economic crisis. It was then rescheduled to Nov. 9th, but this time producers decided instead to show a post-election segment reporting on and analyzing the successful Obama campaign strategy. I don’t think it was on the schedule this past Sunday (Nov. 16), but the show ended up taking two segments to interview the president-elect. So no poker.

Within the online poker community, this story shifts in emphasis constantly as new details emerge and/or further reaction gets shared. For instance, UB apparently did manage to begin paying back cheated customers by the due date prescribed to them by Tokwiro Enterprises last month. And I guess Annie Duke and Paul Leggett have starred in a series of infomercials designed to bolster UB’s image once again, though I have to admit I haven’t bothered to look at those. Nor do I think I will.

I haven’t run across any inside dope saying when (or if) the segment will finally air. Seems like the segment should come sooner than later, but obviously the 60 Minutes producers (understandably) believe there are more important issues to cover these days. Here’s the page where the show lists what is “Up Next,” in case you’re curious.

Another item that popped up at the end of last week concerned that domain-seizure case in a Kentucky Circuit Court. You remember how that Franklin Circuit Court preposterously ruled back in October that those 141 domains hosting gambling websites had to block Kentucky residents from accessing those sites within 30 days (or by November 15th or thereabouts) or the domains would be permanently forfeited to the Commonwealth of Kentucky. That “forfeiture hearing” was delayed until December 3rd, and then the case ended up in appeals court, where a further stay was granted until December 12th. So we get to wait a few more weeks to find out if Kentucky in fact rules the intertubes.

There’s been some hubbub over Clonie Gowen’s lawsuit against Full Tilt Poker. Have only been mildly following that one. Seems like the most interesting part of that story concerns the possible negative side effects of the lawsuit making public all of the company’s machinations (and ownership structure). I’ll let you head over to Pokerati for the latest on that one.

You’ll also find over there on Pokerati they are running a poll to discover who is the “best true poker pro blogger,” a contest in which our buddy (and underdog) the PokerGrump is presently crushing the competition. We’re all wondering what exactly he’s gonna do once elected.

Finally, let me pass along the news of the return of PokerListings’ Run Good Challege, a.k.a. RCG 2 Electric Boogaloo. The same crew of bloggers from the first RGC are back again for this one -- including me, yr humble gumshoe -- with a few others having been added, including pros Liz Lieu, Christina Lindley, and WSOP bracelet holder Jason Young.

Here’s the full line-up: David G. Schwartz, Change100, Liz Lieu, Dr. Pauly, Christina Lindley, Amy Calistri, the Spaceman, the Poker Shrink, Craig Cunningham, Michele Lewis, LuckBox (from Up for Poker), California Jen, Kid Dynamite, Benjo, Pokerati Dan, the Wicked Chops entities, Jason Young, and Matt Showell and Dan Skolovy from PokerListings. And me.

Hope I got all them links right. At least I know I have them correct over in my Bloglines.

Chance, Though Not the Only Element of the Franklin Circuit Court, Is the Element Which Defines Its Essence

Okay, so I’m paraphrasing. Even so, that seems to sum up what was signified by yesterday’s order from the Franklin Circuit Court to allow the state to seize 141 domains hosting gambling sites if the sites do not block Kentucky residents’ access.

“Disappointed” was the word the Poker Players Alliance used in its response to yesterday’s order. The PPA is disappointed in the way the order dismisses the notion that poker is a skill-based game. The PPA is also disappointed in other implications of the ruling, saying it has “set a dangerous precedent for censorship on the Internet.” A lot is up in the air at the moment, it seems. Hard to tell how much of this here ruling is even enforceable (never mind constitutional). I suppose we’ll find out in the coming weeks.

I’d probably use other words, too. Outraged. Appalled. Dismayed. Others come to mind as well.

The milder “disappointed” I’ll reserve to describe my play in yesterday’s LeTune Challenge, another one of those blogger tourneys to which I was fortunate enough to be invited. This one was hosted by RakeBrain, and 30-plus bloggers were recruited to play a “HA” (pot-limit hold’em/pot-limit Omaha) tourney over on Full Tilt Poker.

Got to play a bit with my bud Spaceman against whom I was also pitted in that Run Good Challenge last month. After getting moved to his table, he immediately commented that I probably liked the fact that PLO was in the mix. I said something facetious about the glass being half-empty.

The fact is, I don’t really like PLO tourneys that much. The game’s too volatile, really, for tournament play. At least it feels that way to me. Was recently listening to Jeff Hwang talking about the same subject on the latest episode of Howard Schwartz’s Gamblers Book Club podcast. Hwang is the author of the terrific Pot-Limit Omaha Poker: The Big Play Strategy and has also started contributing strategy columns on PLO to Card Player. When Schwartz asked Hwang about his tourney record, Hwang said he mainly played cash games, and that he felt PLO wasn’t a game that was very well suited for tourneys.

A debatable issue, I suppose. All I know is, I’m much more comfortable playing PLO in a ring game than in a tourney.

I played okay for the first hour or so. I’d built up to around 2,000, then had a hiccup of a hand versus PokerPeaker. We were playing hold’em. It folded to my button, I raised with A-7 offsuit, then PokerPeaker repopped it from the small blind. After his reraise, he had less than 300 chips behind, and I rashly put him all in only to see his Big Slick. An ace and king both flopped, and I’d stupidly thrown away a third of my stack.

One orbit later we were still playing hold’em. I was on the button again with pocket eights and again open-raised. This time LawChica repopped it from the big blind, and I had no choice but to go with it. When LawChica also turned over A-K, I was starting to feel a little snake-bitten, but my eights held up and I was back in bidness.

Made it to the first break with 2,434, putting me 11th of the 19 remaining. Held steady for awhile, then completely mangled a PLO hand to knock me back down to about 1,000. Made at least three mistakes on the hand, maybe four. This, frankly, is the hand where I’d most readily use the word “disappointed.” It is also a hand that proves beyond doubt that the Franklin Circuit Court is dead wrong when it says “no matter how skillful or cunning the player, who wins and who loses is determined by the hands the players hold.”

I had 2,334 when the hand began. It was folded to me in the cutoff where I had been dealt . First mistake was even playing this weak-ass cheese. I was vaguely influenced by the fact that Fuel55, sitting on my left, was AWOL, and so I essentially had the button if I wanted it. So I limped for 120. That was the second mistake, I think. Shoulda raised if I’m playing at all there.

So me and both blinds -- LawChica and PokerPeaker -- see the flop come . They both check, and I bet the pot with my top two pair. They both call, and I even say out loud “straight draw.” Another trey comes on the turn, and they both check again. I’m frozen, and make my third mistake of the hand by checking as well. I have to bet there if I’m going to proceed at all in this hand.

The river brings the , and both check again. Mesmerized by the pair on board, I somehow forget about the straight draws and make a horrible bet of 950 (about two-thirds the pot). Both LawChica and PokerPeaker call, and both show 10-9-x-x to split the booty.

Just terrible, that bluff. Bet just the right amount to solicit the calls. But so it goes. I pick up A-A-x-x single-suited soon after and push, and double up a just-arrived Fuel55. Left with less than 500, I push again with K-Q-J-7. This time LawChica has the aces, and when an ace flops I’m out the door in 16th.

Thanks again to RakeBrain for the invite! Would’ve liked to have had that one hand back, but to be honest I think my chances were less than favorable getting to the top four paying spots anyhow.

Unless, of course, as the Commonwealth of Kentucky insists, “Chance, though not the only element of a game of poker, is the element which defines its essence.” If that were true, well then, we all could win!

Kentucky Takes It Down

Blue moon of Kentucky, keep on shining,
Shine on the one that's gone and proved untrue;
Blue moon of Kentucky, keep on shining,
Shine on the one that's gone and left me blue.

That is the first verse of Kentucky’s official state bluegrass song, “Blue Moon of Kentucky.” I suppose the moon will shine over Kentucky Governor Steve Beshear tonight, even after he’s gone and left online poker players blue.

Just saw the news over on Pokerati. In the case of the Commonwealth of Kentucky (represented by J. Michael Brown, Secretary of the Justice and Public Safety Cabinet) versus “141 Internet Domain Names” (the defendants), the Franklin Circuit Court has ruled in favor of the plaintiff. No shinola!

That means all of the gambling websites accessible via those domains must block Kentucky residents from doing so within 30 days, or the domains will be permanently forfeited to the Commonwealth of Kentucky.

This is very bad news. And not just for Kentuckians.

You can read the 44-page decision here. Or, if you aren’t into that, here’s a quick summary of what the decision says.

After identifying the parties involved and their representation, we get a “Statement of Facts” that summarizes the previous hearings regarding the matter, as well as the Circuit Court’s order to seize the domain names (temporarily) on September 18th. Then comes the lengthy “Discussion of the Issues” which takes up about three-fourths of the order’s length. This section is divided into subsections, each of which is introduced by a question.

To the first question “Does the Court have subject matter jurisdiction over a civil forfeiture action involving internet domain names?” the court found that Kentucky “presented overwhelming evidence” that gambling is indeed prohibited within the state’s borders, and that the defendants (the 141 domains) “have been and are being used in connection with on-line or internet gambling activities available and accessible within the Commonwealth. So the answer to that first question -- according to the Court -- is yes.

Then comes the question “Does the Court have in rem jurisdiction over the Defendants[’] 141 Domain Names?” To answer that, the question of whether or not the domains are “property” is addressed. Somehow the Court determined that since “Property is about the relationships of people with respect to things, both tangible and intangible,” that, yes, indeed, the domains are property. Then comes the question “Do the Defendants[’] 141 Domain Names have a presence in Kentucky?” There, too, the Court said yes, arguing that the “141 Domain Names transport the virtual premises of an Internet gambling casino inside the houses of Kentucky residents.”

Seems preposterous, I know. But that’s what the order says.

The order then asks a couple of questions about how the domains are used, and whether or not gambling is occurring on them. To the question “Are [the] Domain Names, by reason of their illegal or unlawful use, gambling devices?” the order says yes, they do “fall within the meaning of a gambling device” as defined by state law “and are subject to seizure and possible forfeiture as a gambling device.”

Then comes a very interesting question for us: “Is poker gambling as defined by KRS 528.010(3) [i.e., Kentucky state law]?” Takes less than a page to say yes, poker is gambling. The answer concludes by saying that “Chance, though not the only element of a game of poker, is the element which defines its essence. In the end, no matter how skillful or cunning the player, who wins and who loses is determined by the hands the players hold.”

I have said ever since the UIGEA was passed that I wouldn’t be at all surprised to see the courts describe poker this way -- as “a game subject to chance” -- if given the opportunity to address the “skill-vs.-luck” question. Of course, as those of us who have considered the question thoughtfully all know, that two-sentence summary hardly covers the issue. In any event, in terms of legal definitions, we have here a pretty unambiguous conclusion that poker is gambling.

There’s more regarding the status of the forfeiture and the respective “standing” of the plaintiff and defendants, and why the Court isn’t granting any of those motions to “dismiss” or “set aside” the order. Then comes the conclusion, in which the Circuit Court says that it does “note that Opposing Groups and Lawyers argue any judicial interference of the Internet will create havoc.”

But they are Not Impressed. “This doomsday argument does not ruffle the Court,” comes the response. (I am not making this up.) “The Internet, with all its benefits and advantages to modern day commerce and life, is still not above the law, whether on an international or municipal level. The challenge here is to reign in illegal activity and abuse of the Internet within the framework of our nation’s and Commonwealth’s existing common law norms and principles, until expressed guidelines from state and federal legislative bodies say otherwise.”

Thus, the motions to dismiss and or set aside are “DENIED” and the seizure of the domains is upheld in an “AMENDED” state -- namely, with the added proviso that each domain “installs the applicable software or device, i.e., geographic blocks, which has the capability to block and deny access to their on-line gambling sites through the use of any of the Defendants[’] 141 Domain Names from any users or consumers within the territorial boundaries of the Commonwealth.” And if they don’t within 30 days (i.e., by November 15th), the domains are permanently forfeited to Kentucky.

I assume appeals are on the way. And perhaps (some of) the sites already have other back-up plans in place.

But very bad news, this. That most of the sites will go ahead and block Kentucky is probably a given. What is also probably a given will be other states’ following suit with similar attempts to seize the domains.

A “doomsday” of a different sort?

Kentucky Fried Court Case

Ever see The Kentucky Fried Movie? All-time fave. Came out in 1977, brainchild of the same crazies who’d go on to do Airplane!, Top Secret!, and The Naked Gun. Buncha hilarious R-rated skits lampooning 70s pop culture.

Somewhere in there comes a trailer for a faux disaster flick -- in the tradition of Towering Inferno and Earthquake -- called That’s Armageddon. Came to mind sometime mid-afternoon yesterday, about the time the Dow was down 800 points for the day.

As chaos reigns and the world crumbles down around them, a man and woman at some sort of romantic crossroads try to negotiate what to do next:

Man: What are you saying?
Woman: Leave her... come back to Montana with me.
Man: I could no sooner run away from her than myself.
Woman: I’m not asking you to run, I’m asking you to face reality!
Man: Whose reality, yours or mine?
Woman: My reality AND yours, that’s whose!
Man: What are you saying?
Woman: Leave her... Come back to Montana with me!
Man: I could no sooner run away from her than myself!
Woman: I’m not asking you to run, I’m asking you to face reality!
Man: Whose reality, yours or mine?
Woman: My reality AND yours, that’s whose!
Man: What are you saying?

The trailer is only a couple of minutes long, but we come back to them again later. They’re still stuck in the same loop.

One assumes sincere efforts will be made to face reality this morning at 9:30 a.m. in a Franklin County Courthouse in Frankfort, KY. That’s when Circuit Court Judge Thomas Wingate will once again hear the Kentucky Justice and Public Safety Cabinet’s argument that they should be allowed to seize 141 domains hosting online gambling sites -- including some of our favorites -- if those sites refuse to block Kentucky residents’ access. (Incidentally, a couple of sites have apparently already pulled out of Kentucky, including Goldencasino.com.)

Various others should be on hand as well to argue the opposite view that the Commonwealth of Kentucky doesn’t have jurisdiction here over the domains, and thus to allow such a seizure would be unconstitutional.

An emergency “summit” was held yesterday afternoon at the Capital Plaza Hotel in Frankfort for groups opposed to the seizure of the domains to get together to discuss today’s hearing. The summit was hosted by the Bluegrass Institute, a non-partisan group that describes itself as an “independent research and educational institution offering free-market solutions to Kentucky's most pressing problems.”

The summit brought together representatives of the Poker Players Alliance, the Internet Commerce Association, Interactive Media Entertainment & Gaming Associates, Americans for Tax Reform, among others. It is expected that these same folks will show up for this morning’s hearing, along with a lot of other interested parties, possibly including representatives of some of the online gamblinge sites currently hosted on the 141 domains in question.

I wrote a little about this attempted power play a couple of weeks ago when the news first hit. Still tend to think it would be highly unusual for this case not to be dismissed, but who knows, really?

Will be very curious to follow the news outta Frankfort today. The PPA’s “Selected Coverage of Kentucky Governor Steve Beshear’s Actions Against Internet Poker” should be a good place to go for the latest, I’m thinking.

Of course, these sort of end-of-the-world type threats seem to have been the norm for those of us who like to play online poker. For the last two years or so, anyhow. “Again?” we say, then shrug...

“That’s armageddon!”

Running on Empty

What a weird week. I happen to live in a part of the country where we are experiencing a genuine gas shortage. Driving home from work yesterday, I passed a half-dozen stations, none of which had any gas to sell. Meanwhile, that needle is edging uncomfortably closer to “E.”

A bit like trying to play with a short stack, this kind of vague sense of desperation. I’m gonna have to do something! But my options seem severely limited.

Speaking of running on empty, I wanted to follow up on that civil action going on over in Kentucky. Would like to think Ky. Governor Steve Beshear (and the “Commonwealth”) haven’t much fuel to get this one going. But the more I read about it, the less sure I am that’s the case.

For those of you following along at home, the hearing that was scheduled to take place yesterday afternoon in a Franklin County Circuit courtroom in Frankfort regarding the possible forfeiture to the Commonwealth of Kentucky of 141 internet domain names currently hosting online gambling sites was delayed until today (Friday) at 3:30 p.m.

Reading around some yesterday on the forums and various websites, I think I’m getting a little better picture of the logistics of all of this. The Poker Players Alliance has gathered together links to various articles and forum discussions in one handy place. There’s also a link in there to that five-minute audio clip of Kentucky governor Steve Beshear announcing the civil action from earlier this week.

Kentucky -- led by the governor -- wishes to prohibit users with Kentucky-based IP addresses from accessing the online gambling sites currently hosted on those 141 dot-coms. In the statement (from the audio clip), Gov. Beshear also mentions wanting to try to get the sites to “pay damages” to Kentucky for having “siphon[ed] off money from regulated and legal games such as Kentucky’s thoroughbread racing industry, our lottery, and charitable gaming activities” (which gives one a pretty clear idea who is really motivating this effort). He suggests the sites have managed to grab “tens of millions of dollars” from Kentucky residents via what he regards as “illegal activity.”

Actually, it doesn’t appear as though this stated desire for damages is really part of the civil action (I don’t see it mentioned anywhere in the order, anyhow). More likely just a threat suggesting what might happen should things not go their way today. But what does seem clear is should the 141 domains not agree to block Kentuckians access to the sites, Kentucky wants to seize the domains altogether (and, one would presume, shut down the sites).

Now why we have already seen headlines saying things like “Ky. Seizes Domain Names of Web Gambling Sites”? Well -- and this is truly surprising to discover -- apparently control of the 141 domains has already been granted to the state of Kentucky. That’s what we are seeing being reported here and there. That’s also what Gov. Beshear says happened in his statement. An order to seize the domains was filed last week, and the Circuit Court judge granted it. Seems very odd that could be possible -- that a state circuit court judge could even have the ability to grant such a request. But it also seems that is where we are at the moment.

This afternoon’s hearing, then, is a “forfeiture hearing,” meaning what is to be decided is whether or not the original owners of the domains are going to have to give up control of those domains permanently to the Commonwealth of Kentucky. And if the sites are unwilling to block Kentucky residents’ access, that is when the Commonwealth will request the domains be handed over in order to stop once and for all them Kentuckians from playing their online bingo.

Like I say, what is really weird here -- and genuinely troubling -- is that ownership of the domain names has already been transferred, per the Circuit Court judge’s granting of last week’s order.

What happens if somehow the forfeiture is granted? Some of the smaller sites will likely give up their operations, I’d think. The larger ones will surely gravitate to new domains, much like Bodog did about a year ago. (That was a totally different matter, incidentally, involving a lawsuit regarding a patent infringement claim and a failure by Bodog’s representatives to appear in court, resulting in Bodog losing the Bodog.com domain.)

Also, while I’m not completely clear on how it all works, I think it may be true that for some (most?) of the sites, the actual “poker room” where we play isn’t technically hosted on the domain, and so it may well operate normally, though the websites (from which one downloads the software) would no longer be up.

All of which is to say, even if the domains get forfeited, we’re still playing poker. In other words, we’ll find the sites. Including those of us who live in Kentucky. But in an already uncertain environment of online poker, suddenly everyone will be on the run.

Hopefully we’ll all have enough gas to get where we wanna go.

(EDIT [added 9/27/08]: As those of you following the case have probably heard, a continuance was granted in court on Friday, giving all parties another week to prepare their cases. Sounds like several [not all] of the sites are desirous to fight the attempted seizure of the domains. Another issue here is the need for the owners of those sites to identify themselves. For more on the continuance, read here.)