Tuesday, October 03, 2006

Anti-Gaming Legislation

OK so here it is. I guess all the other poker bloggers out there are all also going to be more or less obligated to give their spin on the whole online gaming legislation that passed the Senate this weekend, so I will give you my thoughts here as well. First let me mention congratulations to PhinCity for winning last night's Mondays at the Hoy tournament, in one of our biggest fields yet for this weekly private tournament on pokerstars. 34 players threw down $20 + $2 apiece to mix it up and vie for pieces of the $680 prize pool for the event, which is within one or two players of our largest ever hoy tournament thus far. SoxLover also cashed in the hoy again, which makes at least three or four cashes in this tournament for one of the trickiest players around, and for the life of me I cannot remember the third casher right now, but congrats to you all. And kudos to everyone for showing up to play instead of cowering like scared schoolgirls under the big stick of Bill Frist and his asshole compadres on Capitol Hill.

So let's get right into that. First off, I think everyone should read the statement from full tilt on this subject (I hope that link is still right -- of course my work blocks full tilt's website and any other poker-related website because sites likes these are, after all, the work of the devil himself aren't they?). Full tilt's statement actually comports fairly closely to what Howard Lederer told us bloggers at the WPBT gathering in Vegas this past July -- mainly, to keep in mind that this bill does not actually make it illegal for us to play online poker while present in the United States. Rather, what the bill seeks to do is to make it illegal for any financial institutions to accept money transfers either going in to or coming out from any online gaming sites. That is where the illegality attaches under this new bill, not to the act of an individual playing real-money poker online in the U.S. So I do not personally feel more at-risk of getting into trouble for breaking a law by my actions today than I did yesterday, last week or last year for that matter. It is at the financial institution level where this bill attempts to stem the flow of money into and out of online gambling when it comes to U.S. residents. I don't know why I think that point is so important to make, but I do so there it is. We are not criminals, under the old scheme or the new scheme, at least not according to me.

Also, with respect to the timing of the ban, keep in mind that, as far as your immediate online poker play (i.e., tonight's WWdN, tomorrow's Mookie, etc.), this bill has not been signed into law yet. Now don't get me wrong, there is precisely zero chance that Mr. Born-Again-Hyper-Religious-Moralist (ha ha) George Bush is going to veto this bill. Mr. First's ploy of attaching this act as a rider to a larger port security bill will get the job done no doubt, and Bush will have to sign. He'll want to sign, probably even knowing that the anti-gaming bill is being porkbarreled on to a port security bill, as if it has anything the fuck to do with ports or with security. But Bush would have to sign this even if he didn't like the anti-gaming aspects attached to the bill. It's a republican bill, and he will sign it. That will happen sometime in the next week or two, max, with some people suggesting Wednesday the 4th as the earliest possible time for the President to sign this bill into law now that both houses of Congress have approved it. But that signature hasn't happened yet, so for purposes of our play tonight, tomorrow, etc., there is nothing different right now than there was last week. No new law is in place today as compared to before the weekend, so although that will change soon when Mr. President signs this badboy into law, for now there is no change.

Lastly, as far as my predictions as to how this all will shake out, I have to begin again my saying I am no kind of expert on this. I don't pay any attention whatsoever to politics, ever, so I don't know what if anything is likely to happen with respect to the political scheme or the political climate regarding the online gaming financial transactions ban. I am a lawyer by trade, but not the kind of lawyer who has any actual knowledge of the statutes in question, nor the process involved in enforcement or the nuances of how this kind of law could be enforced against various parties involved in making online gaming work. What I'm about to say may be really ignorant from all of those perspectives, and I wouldn't even know it. But here are my thoughts:

In general, the #1 name of the game over the near term with respect to online poker will be uncertainty. As I understand it, there is a 270-day window for financial institutions to become compliant with the new law, starting from whenever President Bush signs it into law. I see that Party has stated that it will immediately ban all U.S. residents from its games. I don't understand why PartyGaming would do this at this point in the game, especially since the new act is aimed at financial institutions and not at the online poker sites themselves, at least not directly. I think that particular move by Party is more related to the fact that PartyGaming is a publicly-traded company, and there are numerous risks associated with fair treatment and disclosure of investors and potential investors with a public company, that would not necessarily exist for a non-publicly-traded entity like a Full Tilt, etc.

I could see any number of possibilities for how this whole situation could realistically turn out. First off, it wouldn't surprise me if the online poker sites go ahead and ban U.S. residents from playing. But even that could work a few different ways. They could, for example, just decide to bar people who signed up with U.S.-based physical addresses. Then, a year from now we could all still be playing because we just change our registered addresses to some made up place in the caribbean or Europe or something. Or we could sign up with new accounts and use some made up place in Europe. Or an organization like the PPA could come up with a way for us all to use one of their addresses in Europe or somewhere similar in order to sign up as a non-U.S. player. Or, alternatively, if the poker sites want to take this ban more seriously, they could require proof of a non-U.S. address in order to play (i.e., a copy of a driver's license or other official picture ID, etc.), in which case that will make it that much harder for us regular joes to play poker online from within the United States. Taken to the extreme, the poker sites could simply refuse to serve any player who comes from a US IP address. That would probably be the most direct and safest way to ensure that no one plays from a U.S. location, but it is also the method I would expect the least as far as enforcement procedures by the online poker sites.

One last point here -- I am definitely not 100% clear if this whole prohibition bill will even actually stem the playing of online poker in the U.S. Not only could things shake out such that the online sites simply let us sign up with non-U.S. addresses, not verify those non-U.S. addresses and then let us play, but I'm not even clear that non-U.S. financial institutions will have to comply with the new rule. In other words, for example, I use Neteller to fund my online poker accounts. Neteller is a European company, and as such is not explicitly subject to U.S. laws and regulations, especially given that an online payments service like Neteller can be and often is used for payments other than illegal online gambling. Think of Neteller like the European version of Paypal, but it also currently allows transfers to and from online gambling sites (unlike Paypal). Anyways, since Neteller is a European company, it seems to me that Neteller could simply continue to let U.S. players send money to and from online gambling sites, and keep up with its business as usual approach even despite the U.S. online gambling ban. I would think that this system could work, subject of course to the fact that any Neteller managers could be subject to detainment and probably imprisonment in the United States if they set foot in the U.S. once this bill has become effective law. Recall that the head of Sportingbet plc was arrested and jailed in the States just a few weeks ago when he landed in Chicago after a flight from the European base of the company. Presumably, Neteller officials could face the same sort of fate if they step foot in the U.S., and it is unclear to me at this time if they and other companies like them would be willing to take on this risk and simply never come to the United States again. But the point is, it seems to me that a non-U.S. financial institution like Neteller could be the key to enable us to keep playing poker online, because they would at least have the ability to "ignore" the U.S. ban and not be subject to prosecution in the U.S. as long as the company's officials do not travel here. Whereas, a U.S. institution would be subject to immmediate enforcement and punishment for ignoring a new U.S. anti-gaming law.

Lastly, I think there are also other ways this could all shake out in favor of U.S. online gaming players. Many if not most of the online poker sites nowadays permit funding your account directly from your bank account to the poker site, without even the need for a financial intermediary like Neteller or Firepay or a credit card company to get the money there. This "direct check" type of funding might also still work under the new rules, as long as the online poker site itself is not based in the U.S. nor present in the U.S. Again the same restrictions as above would apply, in that if, say, pokerstars decided to continue to serve U.S. players funded via Direct Check only, then if I were pokerstars management I wouldn't even think of stepping foot on U.S. soil, and would expect to get arrested if I did. But otherwise, I have outlined here what I do think are several possibilities for how the whole online poker ban could shake out.

In all, the rational, government-respecting part of me has to admit that there is some percentage chance that online poker will be more or less finished in the U.S. -- and possibly around the world as the games dry up considerably without the U.S. players which comprise roughly 75% of these sites' customer bases -- once this bill is signed into law and once the 270-day window has elapsed for the financial institutions to comply. I would lay that percent at somewhere under 50%, but it's hard to say exactly where. I just can't shake the Napster-like feeling here that there could be any number of ways for the online sites to allow U.S. players to continue playing. Mostly all of those methods will lead to increased risk for those poker sites as well as specifically the management of the respective companies, but part of me simply cannot accept that there won't be sites out there who are willing to take on that risk in exchange for a nice-sized piece of this hugely lucrative U.S. online gambling market. So I will end this post just how I began it -- the name of the game for the time being will be uncertainty as we all try to figure this thing out. In the meantime, I did go ahead and withdraw down to just a few hundy left in my account in each of pokerstars, partypoker and full tilt late last week when word really started hitting that this shizz was going to go down over the weekend. Similarly, I also withdrew most of the funds in my Neteller account back to my own bank account, just in case. There is always the possibility of some big calamity and of one or more of these sites "shutting down" because of the loss of U.S. players and the U.S. payments business, and I don't plan to get boned for 4 or 5 large, just because I failed to take action when I had the chance to remove some of my excess money from these accounts. But I'm not withdrawing everything, I'm not stopping playing, etc. In fact I will be playing as much as ever, including tonight's WWdN and I'm sure the 20k guaranteed tournament on full tilt for the first time in several days. When I need to deposit more, I will do so. But for the time being, I plan to keep my balances relatively low in these poker sites and on Neteller, at least until this shit works itself out, or until I make another big mtt score and have to figure out what to do with that money. Until then, like I said, although I am being prudent with my excess balances in each site, I will continue to play my normal amount of nightly online poker, 20k, 40k, blogger tourneys, etc. And that includes Mondays at the Hoy, which I personally pledge to you all will continue to run and kick ass at 10pm ET under the Private tab at pokerstars until I am physically unable to continue running the tournament there. As long as they will let me, the MATH tournament will persist on Monday nights, where hopefully I can continue with my 1-cash-in-20-attempts streak.

See you tonight at 8:30pm ET for the WWdN on pokerstars! Get out there and play these blogger tournaments, guys, because you really never do know how easy or even how possible it will be for us to do this forever. See you then!


Blogger Donnie (aka Shadowtwin) said...

Wouldn't the problem with something like a direct check be that it is still coming from a financial institution? So in order for your bank to comply it would technically have to refuse to honor a check sent to any foreign financial institution that deals with online gambling sites in any way. That would be tough to enforce. If checks were the only way to do it, and if millions of people were writing checks...

But what of money orders through international companies like western union. How could western union possibly quit accepting its own money orders overseas if the sender originated in the US? Surely there are many legitimate (non gambling) reasons whey someone might send a money order to neteller or firepay. What about cash for that matter? Is the next step for the government to actually open all outbound international mail and check to make sure there isn't cash or a money order in the envelope? I used to believe that our government didn't have the right to do that, and that our government wasn't in the business of disregarding our civil liberties. boy was I ever naive.

2:08 AM  
Anonymous Anonymous said...

I think the best example is Neteller. You <-> Your Bank <-> Neteller (not a gaming site and not US regulated) <-> Gaming Site. There is nothing to enforce here. Unless the US government targets specific companies like Neteller and tells US Banks not to allow money transfers to it. But that would be ridiculous. Right?

There are two more options I see that are very easy to implement.
1) Non-US address.
2) Offshore bank account.

I am certain that cheap (maybe even free) solutions are already in the works or already exist. All this stupid bill is creating is a 12B Eurodollar market in offshore accounts and moeny flowing out of this country.

2:48 AM  
Blogger L'artiste said...

The problem with finding alternative ways to funding Poker sites through backdoors ways is that the consequence will be that much greater than downloading MP3’s with a different software than Napster. For one, who would feel comfortable playing online if at any moment your account could be frozen and lose all yours funds instantly? That’s pretty damn risky considering how much money some people have floating out there.

3:05 AM  
Blogger Eric a.k.a. Bone Daddy said...

I brought great shame to your honorable tournament last night, but all things, miss playing a hammer. Well, I hit the wrong button and raised into a face card heavy board.

Anyway, thanks for putting it together each week. I'll bring my A game next time, and restore my honor.

3:06 AM  
Blogger Iakaris aka I.A.K. said...

Won't even begin to try and address an issue I know little about and better minds (including yours) have already clarified nicely.

Instead I have a philosophical question for you:

You are dealt AQs in the BB and the button 3X's you and you call (I don't usually reraise with AQ, but I guess that would be fine too). You both have more than 90% of your stack when the flop comes down A99. You check knowing your opponent is an aggro fiend (I mean that in the most loving way New)who will interpret this as weakness and push. Which he does with KK, allowing you to call and praise your own brilliance until the river card arrives and Pokerstars remembers it is, after all, Pokerstars.

So my question is: would you call that a hellacious junk kicking given that the stacks went in while AQ was a prohibitive favourite, or does this get the lesser appellation - suck/resuck?

I know where I and my bruised testicles stand on this one, but I am looking for an unbiased opinion.

4:30 AM  
Blogger Blinders said...

I hate to be gloom and doom, but I really think the run is over. The US has created a large stick, and is shaking it around and people are buckling. They may never actually have to swing it. We are probably ok for the next 6-9 months, but I see Neteller eventually coming into compliance. The US will use the threat of "aiding and abetting" laws to make employees of gaming sites or financial institutions under risk of arrest if they visit U.S. soil.

For any publicly traded company, it is game over in the US. Pokerstars and FullTilt are private, but the rumers are that PokerStars will exit the US immediatley when the bill is signed. PS and FT saw this coming as they have been quietly closing all US operations in the last few months.

I had held out hope for FullTilt to hold out, but this will not happen because it is partially owned by named pros who reside on US soil. They will face arrest immediatly after the bill is passed as there is no grace period for the "illegal gaming sites".

Some smaller independent sites will continue to operate indefinatley.

Our only real hope is for the WTO to put major sanctions on the US for non-complaince already on this issue. They could for example allow Antigua to not have to respect US copywrites and trademarks. Imagine a napster like site operating legally from antigua, or a flood of legal bootleg DVDs. That would end things quick.

The other hope is Neteller/Party/other majors take cases to the WTO which would be more high profile. No copywrites respected in the EU! The new law is a clear infringement on free trade as it allows other forms of internet gambling to continue in the US.

Sorry for the ubercomment!

4:44 AM  
Blogger Hammer Player a.k.a Hoyazo said...

Iak, I don't understand how that could be a suck-resuck situation. You got the money in as a prohibitive favorite, and then you got horrifically sucked out on on the river. That's it.

A suckout doesn't become a resuck just because at some point in the hand before the money went in the player who eventually lost was behind. Now, alternatively, if you had gotten allin preflop on this hand, with his KK against your AQ, and then the Ace came on the flop, there's your suckout, and then the King on the river would be the resuck. But here, instead, the money didn't get in until after the flop was down, so you were the clear leader and then you got sucked out on. This one is a no-brainer, man.

What this is, is a bad card for Newin on the flop, and then he failed to respect that bad card and drop his Kings, and then he spiked a recockulous King on the river. But bad card does not equal suckout when the money didn't get in until after the bad card hit the board.

Case closed.

4:55 AM  
Blogger smokkee said...

i'm having a difficult time believing this bill is going to shutdown online poker for U.S. residents. it doesn't make it illegal for us to play online. as long as there's a service we can transfer funds thru such as Neteller, we're good. there's a lot of money made out there in transfer fees and rake. there will be a workaround.

a year from now i hope i can dig up all the doom and gloom posts and make link them from a post on my blog titled.

"the Feds said BOO causing me to fold!"

6:21 AM  
Blogger AnguilA said...

I'm spanish, so basically I know a lot less about your country than you guys do, but from the distance I don't see how you can be called "the land of the free" any more.

Let's hope you don't get banned, and find a way to run around that stupid law...

9:47 PM  
Blogger GrayCalx said...

As Donnie said the Direct Check from your back to the poker room is EXACTLY what this bill is trying to curb. And thats where the 270-day requirement comes in, those financial institutions would have 270days to find a way to stop that transfer of money. Can they do it? Who knows. You won't get in trouble, but they will. They could then, decide to penalize you the customer if you do it. But no legal action would be taken against you.

Netteller should be the safehaven. I see no reason why they would ever give up to US authorities. Look at digital piracy, Hollywood and the US has not been able to do anything to the foreign hosted sites. Netteller will be the same, as long as they don't buckle.

"Land of the Free", ya know we can't buy heroin or kill someone either, sooo maybe you should read that as a general motto as opposed to 100% truth.

10:17 PM  
Blogger AnguilA said...

I get that obviously. And I also suppose you are not trying to compare drugs and murder to playing poker online...

3:04 PM  

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