Oh, Yeah... Online Poker

Was asked yesterday about what the election of Donald Trump as the next U.S. president might mean as far as online poker in the United States is concerned.

It’s a good question, although as I thought about it I quickly realized that if I were to make a list of issues to be concerned about regarding Trump’s taking over, there are probably 70 or 80 others I’d rank higher importance than online poker. Then again, it is an issue I am at least attentive to, given how much of my life is affected by the vagaries of poker’s place in the culture.

My first instinct was to say it probably didn’t matter much at all who won on Tuesday, as neither Trump nor Hillary Clinton were going to be huge proponents of any sort of federal regulation permitting online gambling and/or poker in the U.S.

I remember my shuttle ride from Atlantic City to the Philly airport last weekend. My loquacious driver was a Trump supporter, and even had a little Trump/Pence sign he held up and shook at me when making one of several points about the current state of his state and of the nation as a whole.

Thanks to the event from which he was driving me -- the inaugural PokerStars Festival New Jersey series -- we’d gotten onto the topic of online poker in the U.S. He was insistent Trump was the candidate to support for those wanting online poker up and running again. I expressed doubt, though, saying I wasn’t sure either candidate was going to be all that excited about such a cause.

I was thinking in part of the possibility of someone like Sheldon Adelson, the deep-pocketed Trump supporter and anti-online gambling lobbyist, perhaps influencing a Trump regime in a certain unpleasant direction. Then again, there’s New Jersey governor Chris Christie now standing by Trump’s side who signed NJ’s online gambling bill into law three years ago. Meanwhile VP Mike Pence has openly supported the Adelson-backed Restoration of America’s Wire Act (RAWA), if that might be said to tip the balance.

In any event, the Obama administration obviously has not viewed online gambling a cause to support, and if you think about certain measures like the surreptitious “Operation Choke Point” that targeted online gambling (in part), the evidence suggests an outward (if not so evident) antagonism toward it. I wouldn’t imagine a Clinton administration would have been so excited to adopt an alternate position than the current one allowing for the slow, slow trickle of state-by-state legislation with no federal push.

Like I say, it probably doesn’t matter much. The Unlawful Internet Gambling Enforcement Act -- the 10-year anniversary of which just recently passed -- has effectively reduced online poker in the U.S. to the point of near-insignificance, at least on the federal level. That could change one day, but just as I felt a week ago, there’s no more reason to think that it will anytime soon.

Even so, there’s a whole lot else to worry about first.

Image: “poker-online-logo” (adapted), texasholdempoker. CC BY 2.0.

The UIGEA: 10 Years Ago Today

Ten years? Ten? Hmm... can we even remember that far back?

A couple of weeks’ worth of dread preceded the president signing the bill into law. There’d been a few months of less specific fretting, too, as I recall, although few seemed genuinely concerned.

In July 2006 this blog was only three months old. A lot of my posts to that point had been about playing poker -- online poker, that is. Not unlike many of the other hundreds of poker blogs at the time. Occasionally I’d write about other things -- hard-boiled novels, for instance -- as well as other poker-related topics emanating from “the rumble.”

I did notice that month the passage of a bill in the U.S. House, something called the “Unlawful Internet Gambling Enforcement Act,” and wrote a post here at the time about it titled “Raising a Glass to the Return of Prohibition.” I can’t honestly say that when writing that post I was all that concerned about my ability to play online poker being curbed at all, though.

One reason why I wasn’t so worried was the fact that the bill the House had passed wasn’t the much harsher seeming “Internet Gambling Prohibition Act,” the one certain legislators had been working over for the previous decade or so. Rather the “UIGEA” -- the acronym some of us would become very familiar with (and others consistently screw up) -- was only focused on credit card companies and financial transaction providers, meaning playing online poker wasn’t a problem. And, well, getting money to and from the sites didn’t seem like it would be a problem, either, or at least all that seemed too abstract at the time to bother us.

Besides, the sucker still had be passed by the Senate, then signed by the president. And pretty much everyone in the poker world who’d actually been following these attempts at legislating online gambling were predicting that wouldn’t happen.

We made it to the end of September 2006, then woke up one Saturday morning to realize the unthinkable had happened. The UIGEA had been snuck onto another piece of legislation and passed through the Senate with hardly any resistance at all. I wrote a post that morning titled “Deals in the Dead of Night” remarking on the event, still naively occupying a position of only moderate concern.

I noted at the time how it was already a given that then-president George W. Bush would sign the bill into law, but could only muster the opinion that “then things should get more interesting” once he did.

I’m remembering the following two weeks. It was that Monday, October 2nd, that PartyPoker (now styled “partypoker”) announced it would be cutting off the Americans. Somewhere mid-week I remember having a phone conversation with Party support and having it confirmed that yes, indeed, I would have to withdraw my funds as I wouldn’t be able to play on the site once the bill became law.

Like everyone else I began to wonder if all the other sites would follow suit, but both PokerStars and Full Tilt Poker were quick to confirm they wouldn’t be pulling out of the U.S. It all seemed a lot more uncertain, then, as we got the news that week that the UIGEA would be signed by Bush the following Friday the 13th, a suitably ominous-seeming day for the event.

We got to October 13, 2006, and while sitting at a desk with a banner reading “Securing the Homeland” Bush indeed signed the “SAFE Port Act” into law. In his comments Bush spoke of how the law “will make this nation more prepared, more prosperous, and more secure.” He went on to thank various legislators, reiterate the importance of protecting Americans from terrorism and making our borders and seaports secure, and winning the “war on terror.”

In his comments Bush didn’t mention the internet at all, nor the UIGEA which had been sneakily appended to the bill before its passage. It seemed almost like he might not even be aware of it.

Some of us were aware of it, though. And gradually more and more of us would become aware of it, especially four-and-a-half years later when Black Friday suddenly occurred as a kind of a belated next step in the UIGEA’s “long game.”

And now, exactly one decade after the UIGEA was signed into law, all of us here in the United States who’d like to play poker online (as they do in much of the rest of the world) are necessarily aware of its consequences -- even if we don’t know the reason why.

Photo: georgewbush-whitehouse.archives.gov

Poker’s “Non-Level Playing Field”

Saw early Friday that news about DraftKings and FanDuel both filing lawsuits against the New York Attorney General Eric Schneiderman following his declaration earlier in the week that both sites would need to skeddaddle from the Empire State.

Can’t say I’ve studied both lawsuits too closely (you can find both here at The Boston Globe). Unlike in past years when proposed bills and legal action regarding online poker would provoke several hours of reading and link-chasing in an effort to get a handle on every last detail, the DFS saga can’t really capture my attention as thoroughly.

I did read both, though, as well as several articles surrounding this new development in New York. Both lawsuits seek injuctions against Schneiderman to stop him from stopping them from operating in his state, and both sites make similar points to support their arguments. The tone is more strident in the DraftKings one, I think, or at least that’s my impression. And there’s one other item unique to the DraftKings suit that kind of stands out for poker players bothering to sort through these DFS defenses.

In his declaration last week, Schneiderman announced that a review by his office “conclude[d] that DraftKings’/FanDuel’s operations constitute illegal gambling under New York law.” (Last month the Nevada Gaming Commission likewise ruled DFS to be gambling and thus subject to that state’s licensing procedures.) Schneiderman also highlighted other objections to allowing DFS in NY -- “not on my watch,” he writes -- including describing DFS as “neither victimless nor harmless” in its effects and charging that the sites “consistently use deceptive advertising.”

Responding to the characterization of dailiy fantasy sports as gambling, DraftKings in its lawsuit goes down the road of trying to emphasize DFS’s skill component. FanDuel does this as well in its lawsuit, but in a more general way that doesn’t overstate their position or introduce too many non sequiturs (as far as I can tell).

But get this from DK...

“DFS is... fundamentally different than other games about which the issue of skill versus chance has been previously debated, such as poker,” notes DraftKings. “Unlike poker, where players start each hand on a non-level playing field based on the cards they are randomly dealt, in DFS, each user starts in the exact same position and has complete and total control over the lineup the user chooses, within the consistent constraint of the salary cap.”

Set aside for the moment what is being said in the second half of that sentence about DFS and how everyone starts similarly with the same player base from which to choose, the same salary cap, and the same “complete and total control” over their entries. Look at the first half and how poker is being described. Is that not one of the strangest ways of highlighting the chance element of poker (and minimizing its skill component) anyone has ever tried before?

A hand of hold’em does certainly begin with the deal, and it cannot be denied that each player’s hand is going to be unique, thus creating what might be called a “non-level playing field.” You could also talk about the players’ different positions and uneven stack sizes making the playing field “non-level,” too. But to do so absurdly reduces the game of poker down to a single hand, ignoring the fact that the game is almost never actually played that way.

Over the course of many hands, the chance element introduced by “the cards they are randomly dealt” more or less evens out (more so with the more hands played, of course). Inequalities of position are also removed with the rotation of the dealer button. And if we want to talk about stack sizes, in a tournament players start with the same number of chips, and in a cash game there’s always the option to buy in for the maximum.

The playing field in poker is entirely level. The cards can introduce an element of chance that make it possible for the more skilled player to lose to the lesser skilled one. I think it’s safe to say something similar happens in daily fantasy sports every single night. After all, even if DFS players have “complete and total control” over who they select when completing their line-ups, they hardly have control over how those players perform.

In fact, if we really wanted to pursue a comparison here, DFS is essentially the reverse of poker. In poker you cannot dictate what cards you are dealt, but from there you do have “complete and total control” over your actions, with those actions necessarily affecting whether (and how much) you win or lose. Meanwhile in daily fantasy sports you do get to choose your “hand” or the line-up you set, but once the games begin there’s nothing you can further do to improve your chance of success (or to lessen your chance of failure).

Both involve skill (differently). Both involve luck (also differently). And both are gambling.

Not going to go further into the details of the lawsuits nor the many other ways DFS and poker are both similar and different. Was just struck by that one errant characterization of poker by DraftKings, seemingly out of place within the larger argument for DFS’s skill component.

There is one way, though, that poker has definitely suffered from having to be played on a “non-level playing field.”

Legally.

Remember a Day, Before the UIGEA

Fantasy sports actually came up as a topic during last night’s debate among Republican presidential candidates, although only long enough for one candidate (Jeb Bush) to make a weak joke about his own fantasy football team then add a generic reference to the need for regulation, and another (Chris Christie) to complain about it being a trivial issue then add a generic reference to the need for the federal government to leave fantasy sports alone.

It reminded me a little of people in poker back in the day sometimes wondering -- usually in a humorous way -- if online poker was going to come up in debates or speeches. Of course the topic never would, being so tangential, so it was kind of remarkable to think that daily fantasy sports (DFS) had made its way far enough into the cultural center to get that mention last night.

Of course, it took a few weeks worth of drama including lots of legislators on both the state and federal level wanting to examine DFS for that to happen. Against that backdrop, ESPN shared an interesting article yesterday titled “The true Congressional origin of daily fantasy sports” that provides some historical perspective on the legality of fantasy sports, in particular looking at the years preceding the passage of the Unlawful Internet Gambling Enforcement Act of 2006 which some have argued made the DFS industry possible, even if the bill’s authors never quite envisioned what that industry has become.

After looking into that history for several weeks, ESPN points out how the inclusion of fantasy sports as a so-called “carve out” in the UIGEA wasn’t actually the result of lobbying by the NFL or other sports leagues (as many have stated). About a month back I posted a list of UIGEA-related items here without comment that perhaps suggested as much, but according to ESPN this really wasn’t the case.

In that post I quoted the line from the UIGEA stating how “the term ‘bet or wager’... does not include... participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization.” Remember the UIGEA prohibits businesses from facilitating the funding of “unlawful Internet gambling” which refers to placing, receiving, or transmitting a “bet or wager” online, so saying fantasy sports doesn’t involve bets or wagers means funding online fantasy sports is not prohibited.

The whole idea for what eventually became the UIGEA arose in response to the growth of the internet in the 1990s and the initial appearance of gambling sites, including both poker and sports betting sites. But as the ESPN article points out -- and as many others have been explaining, too, especially over recent weeks -- the “fantasy sports” being exempted back in the late 1990s when legislators first began sharing early versions of online gambling-related legislation wasn’t at all like DFS.

There are references in the article from various folks (including legislators) characterizing those earlier fantasy leagues as being similar to friendly home games in poker -- that is, mostly between friends and for small stakes. There’s also a distinction made between longer (e.g., season-long) fantasy sports contests and shorter ones such as what has become the daily or weekly games. Only one brief exchange between former Arizona senator Jon Kyl (one of those often called an orginal “architect” of the UIGEA) and an attorney alludes to the possibility of shorter-interval fantasy sports contests, and that’s only in passing (and without any subsequent effect on how the law was ultimately worded).

Interestingly, the Department of Justice offered an opinion in 1999 that there should be no fantasy sports exemption in any federal legislation regarding online gambling. Then the topic wasn’t revisited at all over the next several years, making it seem as though the language relating to fantasy sports just kind of lingered there to be quietly included in the final version of the bill that was passed into law.

“There was no evidence in the Congressional Record that the final version of the UIGEA was openly debated in the lead-up to the Sept. 29, 2006 vote,” reports ESPN (a vote that technically didn’t finish until after midnight that night, thus 9/30/06). A lot of us well remember that part of the story. After it passed some legislators complained about the carve outs (including for fantasy sports), and of course there followed the ultimately unsuccessful efforts of Barney Frank and others to pass new legislation regarding online gambling. But the UIGEA remains the law of the land as far as federal legislation focused on online gambling goes, despite its abundant ambiguities.

The article concludes with some forward-looking thoughts about how things might proceed from here when it comes to this reconsideration of DFS’s legal standing. Included are quotes from current major sports leagues commissioners on the subject.

It’s obvious that DFS is almost entirely different from what “fantasy sports” was intended to signify in the UIGEA, which I suppose will be a central part of the debate among legislators going forward. In any event, today I’m lamenting we didn’t think to start calling online poker a “simulation sports game” at some point prior to October 2006.

Is DFS Helping or Hurting?

Daily fantasy sports were already of great interest to poker players even before all of the hubbub began surrounding the industry not quite two weeks ago. Since then, DFS has attracted the attention of many others, too, including the mainstream media, legislators, and even the Federal Bureau of Investigation according to a report appearing late today in The Wall Street Journal.

I was writing last week about how the histories of online poker and daily fantasy sports have intersected and (in a few ways) even paralleled one another. The Unlawful Internet Gambling Enforcement Act of 2006 that played an integral role in removing online poker as an option for most U.S. players also made online gambling on fantasy sports possible, which in turn led to the birth and eventual growth of DFS into a highly conspicuous option available to those in all but a small handful of states.

As the probing of DFS continues, I can’t help but believe it hurts the prospects for online poker in the U.S. a lot more than it helps. But I could be wrong.

I’ve seen a few folks suggesting how the calls for federal regulation and other inquiries into DFS could eventually lead to a revisiting of online gambling laws in the U.S., including the UIGEA, with some change on the federal level regarding online poker being a possible consequence. But to me it looks more like online poker will get buried further underneath the weight of moral outrage at DFS and the “loophole” it has found to permit legal online gambling (as some view it).

What do you think? When it comes to the future of online poker in the U.S., is DFS helping or hurting?

The DFS “Scandal” and Online Poker’s Past

Late last week I was following a few tweets and read a post on what appeared to be a yet-to-explode forum thread regarding this story about a DraftKings employee accidentally releasing ownership data for the Week 3 NFL games during the afternoon that Sunday, including ownership for games that hadn’t started yet.

The post appeared on the RotoGrinders site in a forum thread titled “DraftKings Ownership Leak.” Like I say, the thread didn’t seem to have gotten much attention, although if I remember correctly subsequent posts (which I don’t see today) made it seem like the thread might have been locked early.

The first response (that remains) was from someone at RotoGrinders saying he was talking to a person named Ethan at DK who was about to post a statement. The RotoGrinders guy defends Ethan and DraftKings. Then Ethan’s statement appears, and he explains how “I was the only person with this data and as a DK employee am not allowed to play on the site.” An innocuous-seeming, nothing-to-see-here-please-disperse kind of exchange.

This back-and-forth sat there quietly for a couple of days, but over weekend Twitter picked up the story in a big way, and by yesterday it had developed considerably with more details about the data leak as well as information about the employee Ethan Haskell’s successes on the rival FanDuel site, including a massive $350,000 win for finishing second in FD’s $5M NFL Sunday Million during Week 3. More on Haskell himself has been made more generally known as well, including his position at DK (Written Content Manager) and his previous experience as a content editor for a couple of years at RotoGrinders (perhaps explaining the RG guy’s defense of him in the thread).

It should be noted that there is no evidence that Haskell used any of the info he accidentally leaked to help him land the big prize in the FD contest (or in other games). In any event, the story has now ballooned into a larger discussion about daily fantasy sports, in particular about potential problems with game integrity.

Legal Sports Report has been a good site to follow for coverage of the many issues arising with this story as well as other DFS-related topics. This article from the weekend titled “DraftKings Lineup Leak Rocks Daily Fantasy Industry: Questions and Answers” provides details of the original story, a full explanation of why “insider” knowledge of DFS player ownership data ahead of time can provide a huge edge, and other issues having to do with the sites’ policies and current lack of regulation. The article also includes new statements from both DraftKings and FanDuel from Monday about their intentions to review their “internal controls” and policies.

The story has now moved into the mainstream as well, with even The New York Times reporting on it yesterday in “Scandal Erupts in Unregulated World of Fantasy Sports.” Thanks in large part to the highly conspicuous blitz of television advertising by both DFS and FD, the topic of daily fantasy sports is no longer interesting just to those who play but to others, too, who have been inundated so aggressively with all the ads.

Those of us who were involved with online poker when it first appeared and began to grow in popularity can’t help but notice several parallels seeming to emerge with regard to this story.

Like with DFS, online poker was around for a few years before suddenly catching fire. Planet Poker was the first online site to deal real money games, doing so on January 1, 1998. A little over five years later came the first episodes of the World Poker Tour, then Chris Moneymaker’s win at the 2003 World Series of Poker Main Event, and then the “boom,” generally speaking.

Last week I noted the anniversary of the Unlawful Internet Gambling Enforcement Act of 2006, a piece of legislation that interestingly has had the dual significance of helping jettison online poker from the U.S. while introducing a means for what has now evolved into the DFS industry to be introduced. The first DFS site (Fantasy Sports Live) went live in June 2007, with that industry’s “boom” (as it were) also not occurring until several years later.

As online poker grew more popular, the potential for scandals began to grow as well with much discussion about possible industry-threatening problems on the horizon. Lots of stories about collusion, ghosting, multi-accounting, and other violations of sites’ terms and conditions were circulating, as were instances of player funds being lost with the boom-preceding PokerSpot controversy the biggest early example to occur.

Then on September 12, 2007 a player going by the username POTRIPPER won the $100K Guarantee on Absolute Poker after correctly calling an opponent’s final hand all-in with just ten-high. My first reaction -- chronicled in a post here a week-and-a-half later -- was to wonder about AP getting hacked somehow or perhaps there having been an “inside job.” As we would come to learn, the latter was indeed the case, something AP would initially try to cover up (thereby making the scandal worse). The story then quickly took off in a big way both within the poker world and in the mainstream (including an article in The New York Times).

The loser of that crazy ten-high hand versus POTRIPPER was poker pro Marco Johnson who emailed AP afterwards to request hand histories from the tournament. Johnson didn’t initially study the response, but after buzz about the hand and other possible shenanigans at AP had begun to build he went back to look at those hand histories again and discovered something remarkable. Not only were his hole cards listed, but so, too, were the hole cards of all the other players. The hand histories then became a “break in the case” helping prove POTRIPPER was able to see others’ hole cards and a first step in unraveling the “superuser” scandal.

The larger superuser scandal that would follow at AP sister site UltimateBet (a story that first broke in early 2008) would similarly start out focusing on a single player -- “NioNio” -- who won at an insanely high rate on UB right up until the week the AP scandal broke at which time the player suddenly disappeared from UB. (That scatter plot graph above created by Michael Josem famously illustrated NioNio’s dominance.) Other suspicious accounts were then identified, and the story and scandal got bigger and bigger from there, never being truly resolved (despite former UB part-owner and representative Phil Hellmuth’s revisionist claims to the contrary).

At least a few parallels can be seen here -- an accidental “leak” of information by a site suddenly opening the door to closer scrutiny and suggestions of wrongdoing, a focus on “insider” information allegedly helping an employee to win (in the DFS case by going onto a different site to play), and remarkably high win rates inspiring accusations of an imbalance in the playing field.

The unambiguous advantage of seeing others’ hole cards and the less obvious advantage of having access to ownership data before games close in DFS perhaps don’t seem analgous (to most of us). But those who understand DFS strategy and how the games work have persuasively put forward the parallel. Again, this issue isn’t unrelated to other ones affecting the game, including the huge knowledge gap between number-crunching DFS regs and everyone else, something that is also akin to what we’ve often talked about in online poker where third-party software and other aids have created a significant advantage for a segment of full-timers over those who don’t benefit from the information provided by such tools.

Online poker survived (and mostly continued to thrive) despite the AP and UB scandals, with the sites themselves even able to remain in operation until both collapsed post-Black Friday (resulting in another huge loss of players’ funds). There continued to be serious problems with game integrity thereafter, of course, and the Black Friday indictment and civil complaint would dramatically demonstrate even larger issues for the industry.

I’m actually not quite ready to join the torch-carrying crowd currently storming the gates of DFS. I will say, though, as someone already not hugely inspired to get involved with DFS, recent developments are hardly encouraging me to give it an earnest try.

That said, knowing how similar things unfolded and turned out with online poker, it will be curious to see where the faster-moving DFS “scandal” goes next.

PS Gets the OK from NJ

My first thought last night upon hearing the New Jersey Division of Gaming Enforcement had authorized Amaya to begin operating both PokerStars and Full Tilt in the Garden State was “finally.”

That such an announcement would be coming is something we began hearing not that long after New Jersey governor Chris Christie signed the state’s online gambling bill in late February 2013. Since then the likelihood of PokerStars’ return to the U.S. via Jersey has swung back and forth between just-around-the-corner to not-bloody-likely a few times before several hints over the summer punctuated by the phrase “end of the 3Q” made late September seem a real possibility again.

My second thought was that when news finally did arrive it coincidentally did so on the anniversary of the Unlawful Internet Gambling Enforcement Act of 2006 being passed by the House and Senate (as noted in yesterday’s post). Something oddly symmetrical there, I suppose, given how the UIGEA’s history and that of PokerStars (and Full Tilt) have been intertwined over the last nine years.

After that I found myself less specifically thinking in generally positive terms about the news, not necessarily because of what will immediately come of it but rather how longer term the story of “U.S. Online Poker 2.0” will surely be a lot more interesting than it would have been otherwise. Felt like there was very little to look forward to before; now, perhaps, there are at least more possibilities, including more good ones for U.S. players wanting to play online.

That said, it’s been so long since U.S. Online Poker 1.0 -- an era that ended mid-April 2011 -- it is hard to think all that concretely about how last night’s news might conceivably lead to the reintroduction of the game online in more than just a few states here and there.

But it does feel a little like after enduring several orbits of garbage cards while sitting behind a dwindling stack, a hand with some potential has finally arrived. The attention is newly engaged, but the hand still has to be played skillfully. And luck still matters, too, going forward.

Positions and Juxtapositions: Nine Years Later, the UIGEA Then and Now

I’m just going to juxtapose a few items here today, inspired both by an anniversary and some items I’ve read and heard this week.

On this date nine years ago -- just a few months after I started the Hard-Boiled Poker blog -- I wrote a post here called “Deals in the Dead of Night” noting how the night before, after midnight in fact, a federal bill had passed through both houses that thereafter change the course of online poker in the United States once it was signed into law by then-president George W. Bush a couple of weeks later.

As it happened, that same bill -- the Unlawful Internet Gambling Enforcement Act of 2006 -- helped pave the way for the birth of a new online industry, fantasty sports.

1. “Senate Passes Bill on Building Border Fence” (The New York Times, Sept. 29, 2006)

“At the urging of conservative groups and the National Football League, among other interests, the port security measure carried legislation cracking down on Internet gambling by prohibiting credit card companies and other financial institutions from processing the exchange of money between bettors and Web sites. The prohibition, which exempts some horse-racing operations, has previously passed the House and Senate at different times but has never cleared Congress.”

2. “Frist Statement on Passage of Internet Gambling Legislation” (Sept. 29, 2006)

“U.S. Senate Majority Leader Bill Frist, M.D., (R-Tenn.) made the following statement after the Senate passed the Unlawful Internet Gambling Enforcement Act:

‘Gambling is a serious addiction that undermines the family, dashes dreams, and frays the fabric of society. Congress has grappled with this issue for 10 years, and during that time we’ve watched this shadow industry explode. For me as majority leader, the bottom line is simple: Internet gambling is illegal. Although we can’t monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws.’”

3. “Unlawful Internet Gambling Enforcement Act of 2006” (Oct. 13, 2006)

“The term ‘bet or wager’... does not include... participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization....”

4. “NFLPA Adds DraftKings to Partnership Lineup” (Sept. 25, 2015)

“The NFL Players Association (NFLPA), via its licensing and marketing arm NFL Players Inc., and DraftKings, a leading destination for daily fantasy sports (DFS), today announced a group licensing partnership that will allow some of the NFL’s top-rated players to participate in DraftKings’ marketing efforts this season.... The NFLPA licensing partnership will provide DraftKings the right to employ active NFL players for in-product and promotional campaigns across broadcast, print, social media, digital and mobile properties, as well as via experiential, memorabilia and content activations....

As the popularity of fantasy sports continues to grow with more than 56 million players in 2015, a nearly 40-percent year-to-year increase according to global market research company Ipsos, the deal provides DraftKings with a new degree of connectivity by directly involving a group of active NFL players in the marketing and promotion of its daily fantasy sports experience to fans.”

5. “Fantasy Sports Sites DraftKings, FanDuel September Spend Tops $100 Million” (Advertising Age, Sept. 30, 2015).

“According to iSpot.tv estimates, DraftKings and FanDuel together have funneled $107 million into the networks' coffers since Sept. 1. Nearly half ($50.3 million) of that outlay was spent on national NFL broadcasts on CBS, Fox, NBC, ESPN and NFL Network....

DraftKings ads have aired a skull-clutching 16,259 times over the course of the month, which works out to 135 hours and 25 minutes of 30-second spots. That's more than five-and-a-half days, or a full work week, of commercial messaging that's been hammered out in the span of a 29-day period.... By iSpot's reckoning, FanDuel ads have aired 9,463 times since Sept. 1. That translates to nearly 79 hours of total airtime, or a little north of three days.”

6. Dan LeBatard and Jon Weiner (Stugotz), The Dan LeBatard Show with Stugotz (ESPN, Sept. 29, 2015)

LeBatard: “DraftKings is spilling money all over the place, and now they have made an allegiance with the NFL Players Union where they are able to put players in their advertising. And I’m trying to find exactly the right analogy here, because what DraftKings and FanDuel and what the fantasy phenomenon has captured here is, it’s not quite legalized cocaine... because cocaine has a stigma with it.... But we are in an area right now where DraftKings and FanDuel... and their ilk have found this place.... They’ve found a place where it’s gambling -- it’s obviously gambling -- [and] they’re able to spill and sponsor everything in sports and everyone is taking their money.... People want it.”

Stugotz: “I agree with you about the stigma, but wasn’t online poker... didn’t they ban that?”

LeBatard: “Yes... but online poker is a little sketchier, not nearly as popular as this is....”

Stugotz: “I agree, but I’m just trying to figure out the difference between the two.”

LeBatard: “Oh, there is no difference. One’s legal and one’s not.... One is legal because it’s a game of skill, the other is illegal because, poker players will tell you, it, too, is a game of skill, but it’s the same thing.... It’s amazing to watch the arbitrary moralities that we have with this.”

LeBatard: “I just think it’s weird that we are always applying arbitrary moralities, and in this case we are doing it with our legal system and we’re doing it with our government. It doesn’t make any sense to me that this is legal and online poker isn’t.”

The DFS “Boom”

Heard on the radio what I thought to be a remarkable statistic today regarding the fantasy sports site DraftKings and its ubiquitous advertising campaign. Went looking online afterwards to find out more, and found iSpot.tv’s list of the “Top 10 Spenders in TV Advertising this Week.”

That’s a screenshot of the top of the list at left (click to embiggen). Over the last seven days, DraftKings has spent more on TV ads than anyone else in the U.S. -- a whopping $16,488,346 on 4,910 commercials. Also in the top 10 at No. 7 is DraftKings’ biggest DFS rival FanDuel who spent $11,467,852 on 2,710 ads.

In truth, the last seven days haven’t been the biggest for DraftKings of late. During the first week of September they spent over $24 million on 6,749 TV ads, according to Legal Sports Report. That article points out how DK had suddenly ramped things up here with the start of the football season, having spent about $82 million during the first eight months of the year. There’s more than TV ads, too, of course, as anyone listening to the radio or surfing online well knows. I’d estimate they’ve already spent more than half that total here in September alone.

The stat I heard on the radio, though accompanied by some of these figures having to do with the amount DK has spent on ads, was a different one -- namely, that over the last week more than 1 million had opened new accounts on DraftKings.

This New York Post article from yesterday notes how DraftKings had 1 million users total back in April, so a gain of a million more this week is something else. With the recent surge, DK now has 4.5 million accounts. It’ll be interesting to learn how many it has by the end of the month.

For those of us who were playing online poker every day over a decade ago, all of this seems more than vaguely familiar. That the law that led to the eventual destruction of the game for American players -- the Unlawful Internet Gambling Enforcement Act of 2006 -- in fact today serves as a kind legislative linchpin around which the fantasy sports phenomenon currently revolves suggests another connection of sorts, in an ironic way. (See this interactive timeline of DFS history, with the UIGEA marking the industry’s origin.)

The online poker “boom” saw a game that had already been played for nearly two centuries suddenly explode in popularity over just a few years, not long after the internet had become part of all of our lives. Televised poker -- in particular the first World Poker Tour shows and ESPN’s World Series of Poker coverage from 2003-2005 (discussed some yesterday) -- contributed mightily to the game’s growth, too.

Online poker attracted many live poker players, a segment of those who enjoyed other kinds of gambling, and a lot of others who didn’t otherwise play poker or gamble at all. It also drew in a few sports fans lingering after the game had concluded to watch the WSOP shows.

Meanwhile “fantasy sports” per se has been around for just a few decades, more or less starting with those “rotisserie” baseball leagues in the late 1970s and 1980s (a tiny, tiny niche), then growing in popularity more recently with the season-long contests and leagues. The “daily” games only began popping up over the last few years. The first DFS site to launch (Fantasy Sports Live) came online in June 2007. FanDuel started up in July 2009, while DraftKings staged its first contests in January 2012.

The online poker ads were pretty frequent back during the “boom,” but I’m going guess none of the sites ever came anywhere near to topping biggest ad spenders lists the way DraftKings has over the last few weeks. Would be curious to learn how much the poker sites did spend on TV ads back in the day, and try to draw some meaningful (adjusted) comparisons.

The DFS growth is getting noticed by legislators. One -- Frank Pallone, Jr., a Democrat Congressman from New Jersey -- just this week requested the House Energy and Commerce Committee on which he serves to look into the legality of fantasy sports. There’s one more thread that will be interesting to follow. Other less-than-sanguine stories about the DFS are circulating now, too, including several about how hard the game can be for the casual players and others about how everyone is growing tired of all the damn ads.

I’ve mentioned here before several times how no matter how I try, I just can’t make myself get that interested in playing DFS. But I can’t help but be interested in the fast-moving story of DFS at present.

RAWA Hearing Nearing

This Restoration of America’s Wire Act (RAWA) has reared its head again, with the bill having been introduced here in the new Congress. I was just reading about the hearing for the House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations to discuss it that had been scheduled for Thursday morning, although it appears that has now been postponed to a later date.

RAWA is the Sheldon Adelson-backed bill proposing to rewrite (not really “restore”) the Federal Wire Act of 1961 to prohibit most forms of online gambling. That would include current state-regulated online gambling (and poker) such as we have in Nevada, New Jersey, and Delaware, although horse racing and fantasy sports would be excepted.

The bill got some notice last December during the “lame duck” session with some thinking it could get added to the big omnibus spending bill passed then, but that didn’t happen. So RAWA got reintroduced this year in both the House and the Senate, and now it is sounding like it is getting more attention early on in the Congressional cycle this time around.

The fact that it’s the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations gives you an idea where the focus will be when it comes to this impending discussion of possibly prohibiting online gambling. The list of folks slated to appear as witnesses at the postponed hearing also suggests we should be ready for a mostly one-sided discussion of how some believe online gambling fits into one or more of those categories.

There’s John Kindt who teaches business at the University of Illinois and has been out there comparing online gambling to crack cocaine ever since the internet first became a thing. Les Bernal, the National Director of a group called Stop Predatory Gambling is another on the list. So is Michael K. Fagan, another whom I recall turned up once before as a “Law Enforcement and Anti-Terrorism Consultant” before to express reservations about one of Barney Frank’s online gambling bills in the past (back in 2010).

The only witness who won’t be opposed to regulating online gambling is Parry Aftab, a lawyer who is the Executive Director of WiredSafety.org, a group whose purpose is to increase safety online. She’s also been a witness at previous House hearings regarding such as one in which she spoke in favor of one of Frank’s bills (in 2009) and another where “internet gaming” was discussed (in 2011).

Folks have been opining lately about the prospects for RAWA, with Nolan Dalla not long ago giving 10 reasons why he thinks it could be passed and Steve Ruddock responding with 10 reasons why it hasn’t got a chance. Tend to lean toward the latter view, at least at present.

Am glad, actually, the hearing got postponed, as I’m going to be traveling and thus wouldn’t have been able to follow on Thursday. Still want to see it, even if it’s easy enough to guess how it will go. What happens thereafter with RAWA is less clear.

Railbirding RAWA

A few months after I started this blog -- more than eight-and-a-half years ago, if you can believe that -- the Unlawful Internet Gambling Enforcement Act of 2006 was passed into law. Suddenly I found myself writing about a host of other topics besides simply playing poker, among them legal matters affecting my ability to play the game online.

As we’ve been reminding each other over and over again since the UIGEA was passed -- kind of like repeatedly relieving a bad beat -- that bill was snuck onto another one in the dead of night just before that Congress adjourned for the final push of campaigning prior to the ’06 elections. Thus did it become law without going through what many would rate a legitimate process of thoughtful debate and decision-making -- that is to say, via a process other than one in which our elected representatives would appear unequivocally to be representing the wishes of those who voted them into office (not that such an ideal is so often realized).

From there followed several years of mixing in posts in which I’d write about various legal developments that followed the UIGEA, including the long, drawn-out process of the regulations getting finalized by late 2008, as well as the many rival federal bills introduced by Barney Frank and others hoping to legalize and regulate online gambling in the U.S.

Then came Black Friday, which I might call a game-changer but in truth more or less stopped the game altogether, at least for most online poker players in the U.S. Before then, though, I remember somewhere along the way finding an analogy between poker and legal machinations surrounding the online game, the parallel having to do with both involving a combination of luck and skill.

That’s a generalization, but the point was that when it came to legislation regarding online poker, the process was in some respects controlled by the “players” (i.e., legislators, judges, lobbying groups, plaintiffs and defendants and those representing them, and so on) and also -- seemingly -- by what often appeared “chance” elements insofar as the combination of individuals and circumstances would result in lots of unpredictable outcomes.

Some “players” in the legislative game -- like in poker -- have a lot more influence than others, with money often making the difference in both contexts. Such is what we’ve been seeing happening over the last couple of years with Sheldon Adelson’s ongoing efforts to curb online gambling of all kinds. The CEO of Las Vegas Sands (parent company of the Venetian Macao Limited) is purportedly the 10th richest person in the world (as of this past summer), thus it hasn’t been difficult at all for him to toss chips various legislators’ way in order to lean on them to play his way.

The most recent orbit of this game has involved Adelson backing this new Restoration of America’s Wire Act (RAWA) first introduced in both houses back in March of this year. This federal law would rewrite the Federal Wire Act of 1961 (which the DOJ opined in late 2011 only applied to sports betting) to prohibit most forms of online gambling in the U.S., including making current state-regulated online gambling (in Nevada, New Jersey, and Delaware) illegal. (Horse racing and fantasy sports would still get a pass.)

RAWA has gotten some co-sponsors but not huge traction this year, but during this “lame duck” session some surmised it could be tossed into this huge $1.1 trillion omnibus spending bill, with a lot of talk about how the Senate Majority Leader Harry Reid (NV) was being goaded by Adelson (and his money) into sneaking it in there in UIGEA-like fashion. You’ll recall how during an earlier lame duck session (in 2010), Reid was introducing a federal bill to license and regulate online poker while curbing other forms of online gambling. Well, now he apparently is sitting behind someone else’s stack.

During the day yesterday I noticed Rich Muny, Vice President of Player Relations for the Poker Players Alliance, noting how on his most recent webcast a former member of the House, Jon Porter, said it was “50-50” the RAWA would get added to the spending bill. The bill finally dropped last night without RAWA, and as one commentator in a Two Plus Two thread about the situation noted, “we went from about a 50% chance of being safe, to about... 85%.”

Again, just following the story makes it hard not to think of poker analogies. In this latest hand, those not wanting to see a federal bill outlawing online gambling across the U.S. were all in preflop with Q-Q versus an opponent’s A-K-suited, and now have faded both the flop and turn to have a big edge with one card to come.

The problem with those analogies, though, is that most who oppose RAWA aren’t even sitting at the table, never mind making decisions about pushing their stack in behind a premium hand. They’re on the rail, watching others with big stacks keep buying back in and playing the game on their own.

Poker and Other Gambling Games

Recent developments with online poker have inspired conversations (again) about poker’s relationship to other gambling games, especially other casino games.

When I first became serious about poker and broadened my knowledge enough to appreciate first-hand its strategic complexity, it wasn’t long before I found myself becoming similarly serious about wanting to distinguish poker from other types of gambling which I was much less inspired to pursue. Most who come to poker not via those other gambling games but by other routes (as I did) probably experience something similar, if they become at all serious about the game.

I have to admit I feel differently today, though -- still convinced of why poker is distinct from those games, but much less energized by any special need to point out the significance of that difference.

When the Unlawful Internet Gambling Enforcement Act was suddenly sprung upon us a little over eight years ago, responses from the poker community included a lot of hopeful talk about “carve outs” and how poker somehow shouldn’t be considered “a game subject to chance” (to quote the UIGEA) -- even if, of course, it is. That “skill argument” continues to invigorate some including the Poker Players Alliance, the lobbying group created in response to the UIGEA, despite the fact that legally speaking the argument that poker isn’t entirely “subject to chance” hasn’t really had any major influence.

Sure, there have been occasional rulings by judges sympathetic to poker’s skill component, including that one from August 2012 in which a federal judge maintained poker “is not predominantly a game of chance” while throwing out a conviction for illegal gambling of someone who’d run a poker game out of a Staten Island warehouse. But a year later the ruling in that case was reversed, and it doesn’t seem any occasional declarations in courts acknowledging that it takes a little more know-how to win a hand of poker than to hit your number in roulette has ever mattered all that much as far as the law is concerned.

Meanwhile in Nevada, New Jersey, and Delaware came the passage of online gambling laws that have made it possible for players within those states to play poker against each other (“intrastate”) while allowing for casino games, too. We in the poker community focus more on the poker side of things, but just like in live casinos, online poker is operating right alongside online slots, online craps, online blackjack, and so on. And relatively speaking -- also like in live casinos -- those other games are earning significantly more revenue than poker, to no one’s surprise.

Other recent developments with regard to online poker sites operating outside the U.S. have perhaps served to emphasize further poker’s connection to other gambling games, and I’m not just alluding to PokerStars recently following other poker sites to offer other casino games.

Games like the Jackpot Sit & Go tournaments on Full Tilt Poker and the Spin & Gos on Stars are still poker, of course, though incorporate elements from elsewhere in the casino like slots or the “wheel of fortune.” (Wrote a little about Spin & Gos here last month.) There are plenty of examples of video poker available online, too, a game that might be considered even more of a hybrid of poker and slots. Meanwhile something like live dealer casino holdem at Paddy Power actually changes poker into more of a blackjack-type game -- still incorporating some strategy, though it’s a game fairly distinct from traditional poker.

Makes me think a little of how you’ll often find dice wedged in there next to decks of cards inside a poker chip set. What are they doing there? Well, for one thing, they’re reminding you of traditional notions of poker being just another gambling game.

I still think it’s worth pointing out (when relevant) that poker is different from most gambling games, especially those in which you’re playing against the house rather than other players. But the game’s place in various cultures -- in the U.S., in other countries, and online -- has always been very closely aligned with other forms of gambling. And whenever poker gets pulled away from those games, it seems like it can never be for long before it gravitates back toward them again.

Taking Your Breath Away: Operation Choke Point

I wanted to follow-up on yesterday’s post about my bank of nearly 11 years -- Fifth Third Bank -- without warning and with no explanation deciding to close my account. I don’t anticipate writing again about this topic, but after writing yesterday I was able to learn something useful regarding what happened and thought I’d share it.

With some difficulty I was today able to speak once more with my (former) local branch of Fifth Third. As I expected, they had no further information for me, and were surprised Customer Service (to whom they had directed me) had sent me back to them. I’d been sent around in a circle, no more informed at the end than when I’d begun.

Meanwhile, I very much appreciated the comments to yesterday’s post as well as those I received via Twitter. Among those responding to the post was Grange95, a lawyer, who very helpfully pointed me to a document describing a recently begun initiative by the U.S. Department of Justice called “Operation Choke Point” that appears a very likely explanation for why my account was closed.

The report comes from Darrell Issa, a Republican from California who chairs the House Committee on Oversight and Government Reform. It’s dated May 29, 2014 and is titled “The Department of Justice’s ‘Operation Choke Point’: Illegally Choking Off Legitimate Businesses?”

The report begins by explaining how the initiative was created by the DOJ late last year to “choke out” businesses considered by the Administration to be “‘high risk’ or otherwise objectionable,” with the nominal purpose being “to combat mass-market consumer fraud.” Following the initiative, bank regulators have identified a number of different businesses, industries, merchant types, and activities as “high risk,” strongly suggesting to them that if they continue to serve those involved in the activities on the list they could be subject to federal investigation.

In other words, you might say there are two varieties of “pressure” (or “choking”) happening here. One is the Administration pressuring banks to review customers’ account activity, to track and flag those involved with anything having to do with activities on the “high-risk” list, and to close those accounts or be subject to federal investigation. The other is the “choking out” of the businesses by removing their means to conduct financial transactions.

The report (compiling the Committee’s findings) goes on to explain how “Operation Choke Point has forced banks to terminate relationships with a wide variety of entirely lawful and legitimate merchants,” how the DOJ “is aware of these impacts, and has dismissed them,” and how the DOJ “lacks adequate legal authority for the initiative.” For these reasons and others, Issa -- speaking for the Committee -- is calling for the dismantling of Operation Choke Point, flatly calling it “illegal.”

The report includes quotes from letters sent by banks to customers informing them that their accounts were being closed. The quotes resemble language appearing in the letter I received (discussed yesterday), and in fact there is one from Fifth Third Bank which specifically tells the customer -- someone whose business is making payday loans -- that their business is the cause of the account’s closure.

“During recent reviews of the payday lending industry, we have determined that the services provided by clients in this industry are outside of our risk tolerance,” says the letter. “As such, we will no longer be able to provide financial services to businesses that operate in that industry.”

By comparison, my letter lacked such specificity, only referring vaguely to “federally mandated requirements” as guiding Fifth Third Bank in its reviews of account activity. But from reading the quotes I do think it is probably safe to assume my bank was similarly encouraged simply to close my account rather than have to deal with the threat (real or imagined) of any type of federal investigation as suggested by my apparent connection with one of the “high-risk” activities.

Speaking of, also included in the report is a list of 30 different examples of such “high-risk activity.” For a time the list was posted on the Federal Deposit Insurance Corporation’s website as a warning, although I see from a Wall Street Journal article dated July 28th that the list was removed.

Among the items included is “On-line gambling” (sic), which appears the only one with any possible relevance to my situation. I’ll mention again that the only account activity I might have had that could be construed as meaningful here would be to have received payments via wire transfer from businesses located outside the U.S. whose interests include poker (live and online) and gambling. In other words, my “business” is not even “online gambling,” but rather writing, editing, and reporting as a freelancer.

The list is interesting, and even though it has been removed from the FDIC site the WSJ article points out how the FDIC continues to tell banks they “should still take caution in handling transactions for payment firms, due to the potential risk of illegal activity.” Here’s that list:

Ammunition Sales

Cable Box De-scramblers

Coin Dealers

Credit Card Schemes

Credit Repair Services

Dating Services

Debt Consolidation Scams

Drug Paraphernalia

Escort Services

Firearms Sales

Fireworks Sales

Get Rich Products

Government Grants

Home-Based Charities

Life-Time Guarantees

Life-Time Memberships

Lottery Sales

Mailing Lists/Personal Info

Money Transfer Networks

On-line Gambling

Payday Loans

Pharmaceutical Sales

Ponzi Schemes

Pornography

Pyramid-Type Sales

Racist Materials

Surveillance Equipment

Telemarketing

Tobacco Sales

Travel Clubs

Some company to be in, eh? However you feel about some of the “activities” on this list -- and some are most certainly objectionable -- it’s easy to see how for nearly all of them merely having such a business or being involved in some fashion doesn’t automatically make one guilty of mass-market fraud, money laundering, or any other unlawful behavior.

Issa’s report notes how despite the DOJ’s public statements, Operation Choke Point “was primarily focused on the payday lending industry” before being expanded to include these other activities. “Internal memoranda and communications demonstrate that Operation Choke Point was focused on short-term lending, and online lending in particular,” explains Issa. However, the DOJ seized an opportunity with the initiative to curtail many other types of activities without having even to identify or prove any type of unlawful behavior beforehand.

Having no answers from Fifth Third, I still cannot be sure my account was closed because of Operation Choke Point, although it seems highly probable. The initiative reminds me a little of how the Unlawful Internet Gambling Enforcement Act of 2006 similarly targeted the means of making financial transactions to play poker and/or gamble online and not the actual playing -- another kind of indirect “choking.”

It also makes me think about the many examples of corruption in government I’ve been reading about constantly over the last many months as part of my “Nixon studies.” I was telling Vera how when I read about Watergate and all of the illegal machinations and maneuvers conducted by the Nixon Administration to continue the cover-up, part of me always regards it all as somehow entirely separate from my own experience -- as though it were fiction, almost, thanks to the seeming distance between past and present.

But the fact is, there are obviously many contemporary (and similarly astonishing) examples of our government acting in ways we should question and about which we should be concerned, with Operation Choke Point -- as grievous as it appears to be -- hardly the most troubling.

More on Newsweek (Goodman’s Addendum)

I see Leah McGrath Goodman has tried to write a response of sorts today taking into account some of the considerable blowback she received from her Newsweek article regarding online poker in the United States that first went online yesterday.

Goodman still doesn’t show evidence of being particularly well informed of the complicated history of online gambling legislation. Nor does she present herself as someone knowledgeable enough to discuss persuasively the current situation involving legal, regulated poker in the U.S. as it currently exists in Nevada, New Jersey, and Delaware, and as it is being tentatively discussed in a handful of other states.

The response follows her attempts to discuss her article on Twitter over the last couple of days, with many of her tweets being either snarky (see her exchange with BLUFF editor Lance Bradley in yesterday’s post) or condescending.

“Articles always contain only a small amount of the total research,” Goodman tweeted to one critic today. “Otherwise, they are books.” That is a point she tries to make in today’s addendum as well when insisting upon all of the wide-ranging research she did for her piece.

So glad to have this explained. Really, how could the rest of us -- mere mortals who don’t even write for Newsweek -- possibly understand the reporter’s process? No, it’s much too complicated for us.

Such applesauce.

In a few of those tweets yesterday Goodman brought up how one purpose of her article was to shed light on what she believed to be a usurping of the legislative process that resulted in legal, regulated online gambling coming to the U.S. She reiterated that purpose in her note today, saying that her article “sought to question the transparency of the legal process that allowed online gambling to be introduced in its latest incarnation.”

That issue is foregrounded during the early part of her article where she focuses on the memorandum written by Virginia Seitz during her tenure in the Department of Justice’s Office of Legal Counsel. Guided by a law professor’s interpretation and a Republican Congressman from Utah who seemed to influence much of her thinking about the entire subject, Goodman presents a case that the memo unduly influenced legal interpretations of the Wire Act going forward.

Seitz, of course, was only writing an opinion, not rewriting laws and forcing states to follow new guidelines regarding what they would and would not allow when it came to online gambling in their states. From there individual states’ legislators proposed laws, debated them openly, voted upon them, and in a few cases passed them. Goodman strangely insists that “legalizing online gambling should have been discussed first in an open forum, instead of behind closed doors,” but the fact is these laws were debated openly. No laws were passed by Virginia Seitz, and it’s goofily disingenous to suggest her memo somehow forced the states who have passed such legislation to have done so.

As I discussed yesterday, Goodman’s article goes on to note Seitz’s plan to return to Sidley Austin, the Chicago law firm where she previously worked, with some non-specific references to that firm’s possible interest in online gambling appearing to suggest -- preposterously -- Seitz had an ulterior motive when writing her opinion. Goodman adds a note that a spokeswoman from the firm “declined to discuss its work in the gambling niche, including whether it had ever worked with Rational Group, PokerStars, Full Tilt or Amaya” -- a transparent attempt to draw some sort of implied association via the denial.

In other words, many readers of the article who aren’t necessarily clear on how the legislative process actually works might well come away thinking that Seitz somehow all on her own engineered a stealthy plan to reintroduce online gambling in the U.S. so as to benefit herself, the law firm she plans to return to work for, and also President Obama (who also worked at Sidley Austin) who is likewise implicated indirectly by Goodman as perhaps enabling the engineering this terrible subversion of the legislative process.

It’s all nonsense. It’s also all woefully ironic in light of how the UIGEA -- the federal law that awkwardly attempted to close the long-before opened “floodgates” of unlicensed online gambling in the U.S. -- itself became law. Sneakily appended by then Senate Majority leader Bill Frist to an entirely unrelated bill regarding port security that was thought at the time to be “must pass” legislation, the UIGEA did in fact become law without adequate debate among the Congressmen who voted for it.

The UIGEA’s passage into law actually is an example of the legislative process being subverted -- an example of a single person, in fact, successfully skirting usual channels to sneak a law through that would subsequently affect the lives of millions. Virginia Seitz’s letter expressing an opinion about the Wire Act was not.

Leah McGrath Goodman’s article reminds me a great deal of a graduate student who has stumbled into an area outside his or her primary area of still-developing expertise, finds something intriguing that seems on the surface to represent an opportunity to pursue an original inquiry, then hastily produces an essay after an intense but unwittingly narrow investigation. It feels like a well-considered thesis to the writer, but all actual scholars actively working within that area instantly recognize the gaping holes in the resulting essay’s methodology and findings.

I could say more -- after all, I have been writing about this stuff here nonstop for over eight years. But this is just an article. It only represents a small part of my thinking when it comes to the many problems Goodman’s article presents to me. Otherwise it would be a book.

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.

A 2006 WSOP Time Capsule

Didn’t watch the “One Drop” last night (DVR’d it). Instead what time I did spend looking at poker actually involved viewing some of the 2006 World Series of Poker Main Event -- not the ESPN episodes, but the live pay-per-view that was shown that August night (the eighth anniversary of which comes this weekend) when Jamie Gold won the biggest first prize in WSOP Main Event history.

The program brings back some personal memories. That final table occurred just a few months after I started this blog, and about six weeks prior to the passage of the Unlawful Internet Gambling Enforcement Act of 2006. Thus it exists within a rosy context, a time when my absorption in all things poker was at an all-time high. As was the case for a lot of people.

The playing styles at the final table are of course conspicuously different from what we see today, with everyone opening for at least three times the big blind before the flop (sometimes more), lots of overbetting of pots after the flop, and many all-ins that today would automatically be read as “ICM suicide.”

The commentary by Phil Gordon doesn’t have the benefit of eight years’ worth of hindsight, and so while he does point out what seem like misplays or less-than-recommended bet-sizing here and there, most of his observations -- like the plays themselves -- are essentially time-bound, perfectly fine then while highlighting in retrospect changes in tournament strategy that have happened since.

Other comments by the many guest hosts rotating through during the broadcast are similarly time-bound, and since it was such an interesting time those comments are all the more intriguing.

At one point Doyle Brunson stops by. It happens to be his 73rd birthday. He’s just finished playing a 14-hour day the night before, finishing 21st in one of those post-Main Event bracelet tournaments they ran that year.

“What are your impressions... eighty-seven hundred players this year?” begins Gordon, and Brunson answers that he was one who expected there would be an increase in players from 2005. There were 8,773 players in the WSOP Main Event that year -- still a record. That was more than 3,000 more than had played in 2005, and more than 10 times as many as had played in 2003.

“I think that it’s just going to get bigger and bigger,” Brunson continues. “I don’t see any stopping it. In fact if there were some way to bet, I would like to bet there would be something like 40-50 thousand players in 10 years.”

“Oh boy,” says Gordon, who begins to disagree. “I think so,” affirms Brunson. “The only thing that would stop it, you know, if the internet....”

At that point Brunson gets interrupted by another “Oh boy” from Gordon as a hand has developed that will result in Sweden’s Erik Friberg getting knocked out in eighth place by Gold.

“Hold onto that thought,” says Nejad as the hand starts to play out. But the bustout distracts them and they never do get back to the topic.

Not unlike the way the idea itself would be interrupted just a few weeks later. That vision of 50,000 WSOP Main Event players -- perhaps spread all over Las Vegas and/or the internet -- would be left behind, time-bound.

Put Your Funds on Lock Poker (And Throw Away the Key)

Like most American online poker players -- particularly those of us who were fairly dedicated prior to Black Friday -- I’ve remained aware of the ever dwindling options available to us for the last two-plus years. And like many in that group, I’ve been wary about sending money to any of the so-called “rogue” sites serving U.S. customers during that period.

I had a conversation with someone a week ago about online poker, a person entirely unfamiliar with its history as well as all of the recent legal machinations here in the U.S. He couched his questions to me within the very reasonable skepticism a lot of people have had about any form of online gambling.

“Is it really safe?” he asked.

People asked the same question before Black Friday, thinking about all sorts of potential issues that gave them pause when it came to online poker. Indeed, they asked the same question even before the Unlawful Internet Gambling Enforcement Act of 2006 came along to force all of us to start adding certain disclaimers when arguing for the relative safety (or legality) of our favorite game.

There was a period prior to the emergence of the insider cheating scandals on Absolute Poker (news of which first broke in October 2007) and UltimateBet (which surfaced soon after, finally acknowledged by the site in March 2008) when I think most of us would answer such a question defensively. “It’s totally safe,” we quickly retorted, noting how cheating was unlikely -- why cheat when so much money can be made without doing so?!? -- and how depositing and cashing out posed little problems, if any.

Sure, after the UIGEA the business of moving money on and off sites became slightly more troublesome than before. But few harbored much concern about the games being safe to play.

The scandals certainly introduced seeds of doubt, but even then -- from early 2008 to early 2011 -- most of us continued to play without much fretting, some even on Absolute and UB. There’d be occasional problems with certain sites when it came to moving money, with those issues starting to multiply considerably during the last months of 2010 and first part of 2011. But few players felt too much concern, and indeed, there existed thousands of American players who were secure enough with the situation to consider themselves full-time online professionals.

Thus was the shock of Black Friday made all the more intense (for most). Going forward, nothing seemed certain about playing online poker from the United States, even if the many smaller sites continued to operate without interruption. Indeed, for a short period -- say six weeks or so -- it almost felt like a few of those tiny sites might soon be moving up to claim the spots formerly occupied by the giants who’d been suddenly struck down and driven from the U.S. market.

A lot of us spent those first few weeks exploring those other options, including the Merge sites (especially Carbon), Cake, and Bodog (yet to become Bovada).

It wasn’t always simple, but some of us managed to get some cabbage onto those sites and continued playing. I personally looked into it, found the whole process less than inviting, and quickly gave up. However I did win some money on a freeroll over on Hero (a Merge skin), and so kind of kept my hand in that way playing for nickels and dimes without having to deposit.

Lock Poker was then part of the Merge Network, too. Lock had first launched back in late 2008 on Cake, and not too long after signed noted pro Eric “Rizen” Lynch as a representative who I believe also had a position as a VP in the company. They also signed about a dozen more players to sponsor in 2009, then in April 2010 made the move over to Merge.

By 2011, Lock had become slightly better known thanks in part to sponsoring the BLUFF Online Poker Challenge (starting in 2009) which got the site some extra publicity. Not all of that attention was positive, however, especially when one of the players allowed to participate in that initial challenge was noted multi-accounter Josh “JJProdigy” Field. Previously Field had been caught and prohibited from playing on other sites, then went on PokerRoad Radio (in early 2008) to say he couldn’t promise he wouldn’t find a way back onto the sites from which he’d been banned.

But Field ended up not partaking in the challenge after all once “a situation” arose regarding possible account-sharing on Cake. In any event, by the spring of 2011 that’s pretty much all I knew about Lock Poker. Then a few months later came that whole ugly “Girah” saga on the site, another negative story partly concerning a site-sponsored competition that seemed to show the site failing to act responsibly in response to a cheating scandal.

All that was more than sufficient to reduce my interest in possibly playing on Lock Poker to nil. Actually for a brief period in there (from around June 2011 to October 2011), Lock wasn’t even accepting new U.S. signups. But they did begin taking Americans again, and during the last year-and-a-half I noted in passing the site gradually building a large roster of nearly 30 sponsored pros, among them Lynch, Michael Mizrachi, Chris Moorman, Paul Volpe, Melanie Weisner, Casey Jarzabek, Brett Jungblut, Matt Stout, and Annette Obrestad.

It was just about a year ago that Lock popped back up on the radar a bit, right about the time they signed Obrestad. That’s when the whole brouhaha erupted between Lock and the Merge Network involving the canceling of the LOCKOPS series and Lock bolting from Merge altogether to buy up Cake and start their own Revolution Network.

Now the situation at Lock has apparently taken an especially unpleasant turn. Complaints from players facing lengthy cashout delays -- as in several months -- have recently come to dominate all current news about the site. And after a long time simmering, that situation presently appears to have reached a kind of boiling point with reports of players being informed they can no longer cash out funds received via player-to-player transfers on the site.

The sudden introduction of the new ban on cashing out transferred funds -- the news of which was delivered to players via an email last week -- considerably heightened already significant player concerns about the money currently sitting in their Lock Poker accounts. You can read some details of the current situation over on 4Flush. Haley Hintze has a story on it for Pokerfuse as well (although you can only read the first half of that one without a “PRO” account).

Skimming the various 2+2 threads concerning players’ present predicament, it sounds as though there were a decent number of full-timers in the U.S. who had found themselves ultimately choosing Lock Poker as a current option for playing significant volume and at meaningful stakes. Weighing all of those risks discussed above, a number appear to have stubbornly taken to Lock and tried to treat it as a replacement for Stars, FTP, Absolute Poker, and/or UB.

Considered in a vacuum, a prohibition against withdrawing funds that have been obtained via transfer is not unreasonable. I remember once long ago getting paid for an article I had written via a transfer on an online poker site, and when I tried to withdraw the money immediately I was informed that I could not do so without first playing a certain number of hands.

I understood the purpose behind the policy. The site felt obligated not to allow willy-nilly transfers and withdrawals as though it were a financial transaction provider -- not to mention one with zero transaction fees -- and not an online poker site. In fact, even though the exchange of funds between players has always been a significant part of poker, generally speaking, I’ve always thought it would be perfectly within reason for sites not to allow player-to-player transfers at all.

Such a prohibition certainly seems like it could be in the sites’ interest from a legal perspective, as talk of money laundering and other questionable practices that sometimes get associated with sites would become less applicable. It also would probably help lessen problems with collusion, multi-accounting, and other terms-and-conditions-defying behaviors if swapping funds back and forth between player accounts weren’t possible.

I’m not entirely up on how the regulations have been drawn up in Nevada (or where they are headed in New Jersey), but I am guessing player-to-player transfers aren’t going to be an option when it comes to Online Poker in America 2.0. (Perhaps someone better informed on this can let me know what to expect along those lines.)

That said, this new policy move by Lock is not happening within a vacuum, but within a full-blown crisis, it appears, when it comes to the site being able to facilitate withdrawals. For the American online poker player who wants to play full-time and try to earn a living, this last, desperate example of the impossibility of doing so should provide a kind of ultimate deterrent, I’d think. To go back to my friend’s question (“Is it really safe?”), the answer these days for those of us here in the U.S. -- when it comes to the offshore, U.S.-facing sites, that is -- is most assuredly that it is not.

As I say, I was never too tempted by Lock to try them out, but I can’t imagine anyone would be today. Thinking back, the name of the site probably turned me off right away.

I mean, sure, I might have been able to figure out how to get some funds on there. But was I ever going to be able to withdraw money from a site called Lock?