Happy New Year ... May 2009 be (a Lot) Better than 2008

Happy New Year to you one and all--and I hope 2009 is a good one for you, and a lot better than the year that's about to exit stage left.

2008 can't be kicked under the bus fast enough for me. Like most people I know, the year's economic conditions were shattering. Everywhere there's confidence dashed ... people hunkering down until the economic storms blow over them.

Lots of poker players I know are a lot more cautious about their bankrolls--and their style of play too. Frankly, some of them are afraid that if they go broke, they won't be able to replenish their bankroll with other discretionary money becuase it just isn't there.

Other people have lost their jobs, and are unwilling to gamble with their case money, at least not until they know with some certainty they can meet their other obligations--like house and car payments, never mind that little matter of putting food on the table.

I've stopped looking at my investments online, because I don't want to sit in front of my computer and cry. I'll look at them when I aboslutely have to, but not before, and so far I've been lucky enough not to have to draw on that money.

But tough times make for tough people, and survival of the fittest brings out the best in some people and the worst in others. During tough economic times you'll see the lowest of crimes and scams and the best of people's intentions and demeanor come to the forefront. The tough times separate the players--just like the poker table does.

I hope 2009 is good for you, good for me, and good for everyone else. But hope isn't enough. It seldom is. We have to get in there and play our best. If we do, we have a good chance of coming out on top at the end of the day.

PartyGaming Principal Shareholder’s Guilty Plea to Wire Act Violations Angers Former Colleagues and Just About Everyone Else in the Online Gaming Comm

When Anurag Dikshit (pictured left), a principal shareholder of PartyGaming Plc, pled guilty in mid-December to charges under the 1961 Wire Act—the first time this Act was applied to any form of Internet gambling beyond sports betting—he angered a lot of former friends, colleagues, and industry competitors, and in the process, may have set a dangerous precedent.

Despite never offering sports betting and ceasing to accept US customers for its poker and casino games when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006, United States District Judge Rakoff accepted Anurag Dikshit’s plea and a fine of $300 million. The maximum prison sentence under the Wire Act is two years and the date for sentencing was deferred for up to two years.

Dikshit’s plea led Clive Hawkswood, CEO of the Remote Gambling Association’s (RGA), a trade association representing the largest, licensed, stock market listed, remote gambling companies, to urge the European Commission to protect European Union interests against enforcement by US authorities—enforcement that Hawkswood claims violates treaty obligations.

He added, “The US authorities, it seems, have succeeded in pressuring a major shareholder into making a deal. A major line has been crossed and it could set a very worrying precedent.”Rep. Robert Wexler (D-FL), Chairman of the Europe Subcommittee in the House Committee on Foreign Affairs, said: “It is of critical importance that we find an effective and immediate way to regulate and tax internet gaming in order to avoid a serious trade dispute with the EU, which, in turn, could have global trade repercussions for the United States. The retroactive and discriminatory enforcement against EU parties, who ceased operating in the US a long time ago, has directly led to an escalating trade dispute with the EU.”

In addition to upsetting various political apple carts regarding European and US interests in online gaming, Dikshit’s decision created a rift with his former Party Gaming colleagues, And likely troubled executives at other big online gaming companies too.

Even Doyle Brunson, a man not known for criticizing others in the poker community was riled up over this, saying, “It looks like he would feel a sense of obligation to online poker, the industry that made him a rich man. Instead, he folded up like an accordion and pled guilty to breaking some kind of mystery law and is paying a 300 million dollar fine and possible 2-year jail term ... I personally can’t imagine what was going through his mind when he made his decision.”

Dikshit’s decision to fold his hand now is strange timing. After all, the incoming Obama administration is likely to put online gaming and the enforcement of UIGEA low on its list of priorities, if it makes their list at all. Party Gaming’s other three founders are reportedly upset because they believe they did no wrong, since offering online poker to American citizens was not an issue until UIGEA was passed in 2006—and Party stopped doing business in the United States immediately thereafter.

Dikshit will be formally sentenced in two years’ time. While two years in prison is a possibility, it seems unlikely that he’ll spend any time behind bars. Between now and his sentencing date, he is expected to help the American authorities with their inquiries into the world of online gaming.

Nevertheless, his guilty plea is a coup for the US Department of Justice. While DoJ actively pursued overseas companies that allowed American citizens to play on their websites, all of these other firms offered sports betting, in clear violation of the Wire Act. David Carruthers, a Scot who ran online sporting bookmaker BetonSports, was detained in America while changing planes to fly to Costa Rica in July 2006 and awaits trial. Executives of online gambling firms all face the risk of arrest if they travel to the US.

Even Utah--A Staunch Anti-Gambling State--Wants to See UIGEA Repealed!

Utah legislators are eager for the repeal of the UIGEA, and it’s not for the reasons you might think. They want to see online casinos legalized and regulated too—though probably not for the same reasons you do. Utah, a state that does not want online gaming made available to their residents, is wary that eventual federal regulation of online gambling would take away their right to control it within their borders.

They see the handwriting on the wall ... lots of it, and lots of pressure from the European Union, the World Trade Organization, Internet anti-censorship activists, political and civil libertarians, and the even the US banking system—never mind online gaming advocates—to kill off UIGEA and to have the United States regulate online gaming at the federal level.

Utah is considering House Joint Resolution 1, which would ask the federal government to leave decisions about gambling to the states. For Utah, and any other state to regulate Internet gambling within their own borders, UIGEA would have to be eradicated. If this were to come about, each state could make its own decisions about online gaming, just as states did about liquor after Prohibition was repealed.

Because Utah permits no gambling at all, they would not be guilty of unfair trade practices, or guilty of discriminating against foreign firms offering online gaming services. Utah would be in compliance with our trade treaties, and would not be required to allow, permit, or license a service that is illegal in their state. Only states offering gambling would be forced to accept competition from the free market according to trade treaties agreed to under the framework of the World Trade Organization.

Predicting What's New in Your Poker Game for 2009?

Everyone likes to predict the future, but none of us can do it very well. If we could, we’d all have sold short sometime in 2008 and made a bundle during 2008's economic collapse.

Nevertheless, annual predictions are every writer’s stock-in-trade, so I intend to take as clear a look as I can at 2009. But it’s not the same look other pundits will offer.

I’m not predicting the repeal of the loathsome Unlawful Internet Gaming Enforcement Act (UIGEA), that 2006 late night appendage to a piece of must-pass port security legislation which then Senator Bill Frist dreamed up to cater to the religious right in hopes of advancing his soon-to-be-dashed presidential aspirations. Nor do I know who will win the 2009 World Series of Poker, and I’m done offering guesses to even how many players will sign up for that event.

What I’m looking at when I think of 2009 is the future of your local poker game, and mine too. I’m thinking about what poker will be like for the majority of players in the New Year.

Most successful players don’t win because of their own innate genius at this game; they win because of their opponents’ stupidity. Some opponents give money away—they bleed to death at the table by making a continuous run of loose calls with hands they should have folded, and by exhibiting a penchant for looking us up time and time again on the river. Why? Quien Sabe? Perhaps they sleep better knowing that no one ever bluffs them in a poker game.

It’s the sum of all these additional calls that should not have been made, minus the occasions they get lucky by making a really bad call and drawing out to put a bad beat on us, plus the unwarranted river lookups, minus the occasional times we are actually caught bluffing that really contributes to our bottom line. That’s loose money, and loose money is our profit.

If we’re always playing against opponents who play as well as we do, we can only figure to break even in the end. But we usually don’t because breaking even at the table in a casino game amounts to a net loss because of the rake, tokes, and other costs of doing business.

A lot less loose money is floating around in this economy, and fewer people seem willing to gamble, especially when they’re not sure where their next pay check is coming from—if it’s coming at all. Games in 2009 figure to be played a lot closer to the vest, at least until the economy turns around to the point where recreational players have a sense of security about their income stream and a willingness to risk some of it at the poker table.

We already saw this phenomenon happen in online poker. Prior to the enactment of UIGEA, it was as easy to reload one’s account as a mouse click or two that sent funds from a credit card to your online poker room of choice—and there were scads of loose players online, most of whom contributed to the well being of better players who didn’t have to do much more than play straightforward, A-B-C poker to show a nice earn at the end of each month.

But UIGEA created hurdles that had to be scaled in order to reload an online account, and made it more difficult for casual, recreational players to fund their losses and keep a steady stream of money in their online account. The result was a slow but steady disappearance of players who lost regularly, but mentally wrote it off as a casual, convenient form of relatively inexpensive entertainment. When contributors began leaving, games got tougher. Some players still won, but they did so because they never stopped upgrading their skills and kept abreast with the always changing style and tactics found in online games.

Those formerly winning players who did not adapt were no longer winners, and became contributors. Many of them never knew why. They were never able to wrap their minds around a game that was changing even as they played it. It all brings to mind that old Bob Dylan line, “You know something’s happening, but you don’t know what it is, do you. Mr. Jones?”

If you want to succeed in 2009, you have to resolve to move your game forward. And when you make this New Year’s Resolution, just swallow hard and accept the fact that as well as you play in the coming year, you might not win as much as you did before all the loose money dried up and disappeared.

But if you don’t dedicate a lot of time, energy, and study time to sharpening the saw in 2009, you might find yourself referred to in that most desultory of terms—a contributor. With the economy as bad as it is, 2009 is looking like a time for lots of traction and not much speed at the poker table.

Here's my advice for the coming year. And it's simple, too. Keep your head above water. Show up and play. Study and grow your game. And when the tide finally turns and your game is once again filled with loose money and players who came to gamble, you can just sit back, take it easy—and take it.

US ignores EU demands to cease WTO-violating enforcement

The Remote Gambling Association (RGA), a trade association representing the largest, licensed, stock market listed, remote gambling companies today urged the European Commission to take the necessary next steps to protect European Union interests from World Trade Organization-violating retroactive and discriminatory enforcement by US authorities.

Today a principal shareholder of PartyGaming Plc plead guilty to charges under the 1961 Wire Act—the first time this Act has been applied to Internet gambling beyond sports betting. Despite never offering sports betting and ceasing to accept US customers for its poker and casino games when the still controversial Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006, United States District Judge Rakoff accepted the plea of Mr. Anurag Dikshit and a fine of $300 million. The maximum sentence under the Wire Act is two years imprisonment and the date for sentencing was deferred for up to two years from today’s date.

RGA’s CEO Clive Hawkswood said, “These events show that the outgoing US administration and the Department of Justice have demonstrated a total disrespect for the legal rights of European online gaming companies and those associated with them and a complete disregard for US international commitments under GATS.”

EU Commissioner Peter Mandelson wrote to the Bush Administration’s trade representative in June 2008 requesting a freeze on all enforcement actions by US authorities against European online gaming companies on the grounds that they violate international trade rules set by the World Trade Organization. Mandelson suggested that prosecutions stop until a proper dialogue could take place so as to avoid unnecessary escalation of the dispute at a time when the EU had already launched an enquiry into US actions following an RGA complaint made under EU Trade Barrier Regulations. Hawkswood added, “Not only has that request remained unanswered, but now the US authorities, it seems, have succeeded in pressuring a major shareholder into making a deal. A major line has been crossed and it could set a very worrying precedent.”

PartyGaming Plc and its shareholders are not obvious targets for enforcement action of this kind. The company is listed on the London Stock Exchange, is fully licensed in an EU jurisdiction, was among the very first to cease accepting US customers when the Unlawful Internet Gambling Enforcement Act passed, has never offered sports-betting to avoid violating US law and has co-operated fully with the US authorities. Moreover, it has been closely involved in a whole range of industry initiatives that have served to improve the reputation and accountability of the sector as a whole.

“It’s amazing really, said Hawkswood, “that a company which has just been voted by the leading industry publication as ‘responsible operator of the year’ is the one that has been most targeted for this sort of enforcement activity while other businesses that are still active in the US market, including notably US operators, do not appear to be targeted in the same way. That this happens while the US Internet gambling market, the biggest in the world, continues to grow and while US companies are free to develop their businesses in Europe, is quite astonishing. In the circumstances it is not unreasonable for us once again to seek the support and protection of the European Commission. We hope and believe that these continuing breaches of international law by the US will serve to strengthen the Commssion’s resolve,”

Professor Joseph Weiler who directs the Jean Monnet Centre for International and European Economic Law and Justice at NYU School of Law commented, “In this area, the US has lost all its cases and appeals before the WTO's highest judicial authorities. And yet in what can only be described as puzzling and haughty contempt for the rule of law, it is acting as if it won those cases. The US is pursuing European nationals and corporations and threatening them with lengthy jail time and punitive fines based on US laws which have already been unequivocally held to be in violation of American WTO obligations. This is without precedent. It deals a blow to the multilateral trade system at the worst possible moment for the world economy and to Western economies which rely increasingly on services for our prosperity. It serves no discernable American national interest and this is a bad day for the reputation of the US in the area of international law.”

Rep. Robert Wexler (D-FL), Chairman of the Europe Subcommittee in the House Committee on Foreign Affairs had this to say about today’s events.

"It is of critical importance that we find an effective and immediate way to regulate and tax internet gaming in order to avoid a serioustrade dispute with the EU, which, in turn, could have global trade repercussions for the United States. The retroactive and discriminatoryenforcement against EU parties, who ceased operating in the US a long time ago, has directly led to an escalating trade dispute with the EU."

More on Clonie Gowen vs. Full Tilt

On November 18 I reported that Clonie Gowen was suing Full Tilt for $40 million in damages for five causes of action: breach of contract, breach of fiduciary duty, breach of the covenant of good faith and fair dealing, unjust enrichment. and fraud.

The lawsuit, filed in Nevada District Court, came just days after Gowen was told that she would be dropped from Team Full Tilt.

Since then I’ve learned that she’s included Hioward Lederer, Andy bloch, Phil Ivey, Chris Ferguson, John Juwanda, Phil Gordon, Erick Lindgren, Erik Seidel, Jennifer Harman-Traniello, Mike Matusow, Allen Cunningham, Gus Hansen, and Patrik Antonius as defendants, as well as other entities that are involved in Full Tilt’s operations. They include Pocket Kings Ltd., Kolyma Corporation and A.V.V.

Judge Robert C. Jones will preside over the case, where Gowen will allege that in 2004 she accepted a one percent stake in Tiltware and Full Tilt Poker in exchange for serving as a celebrity endorser and a “member of Team Full Tilt.” She claimed she received no compensation beyond her ownership stake for wearing Full Tilt merchandise and for representing the Full Tilt brand as a celebrity poker player.

Gowen alleges that fellow Team Full Tilt members received distribution checks from the companies, but she did not.
According to Gowen, Lederer offered to pay her approximately $250,000 on November 6, 2007 for “past performance,” but she rejected the offer because it was only a fraction of what was owed to her.

Gowen continued working as a member of Team Full Tilt until November 11, 2008, when she was told that Full Tilt planned to issue a press release informing the public that she was no longer a member of the team. Her lawsuit followed a few days later.

It’s kind of difficult to speculate what will happen next, although I’m guessing this will never be brought to a courtroom, where Full Tilt would be forced to open their books and expose their inner workings to a watching world. If that’s the case, then anything about the case you’re now reading can be viewed as the beginning of a protracted negotiation between the parties. I expect this case will be settled and that both parties will agree not to talk about it when they do. How much money will Clonie Gowen settle for? That’s a toughie. Quien Sabe?

High Stakes Poker to Tape December 19 - 21 at Golden Nugget

The Game Show Network will tape season five of High Stakes Poker at the Golden Nugget Hotel & Casino in Las Vegas, NV where Season One took place. Season Five returns Phil Hellmuth, Doyle Brunson, and Eli Elezra, along with new players such as Tom Dwan, and reigning World Champion Peter Eastgate. The mix also includes Sam Simon, creator of “The Simpsons,” and film director Nick Cassavetes.

This year the game requires a minimum cash buy-in of $200,000, and it’s the largest buy-in for an entire run of a television series.

Players currently scheduled to appear include: Patrik Antonius, Mike Baxter, David Benyamine, Doyle Brunson, Nick Cassavetes, Ivan Demidov, Tom Dwan, Peter Eastgate, Eli Elezra, Antonio Esfandiari, Barry Greenstein, Phil Hellmuth, Phil Ivey, Phil Laak, Howard Lederer, Giorgio Medici, Dario Minieri, Daniel Negreanu, Ilari Sahamies, Bob Safai, and Sam Simon.

The game is set for a three-day run: Friday, Dec. 19: 12:30-9:30 p.m., Saturday, Dec. 20: 12:30-9:30 p.m., and Sunday, Dec. 21: 12:30-9:30 p.m.

The 60 Mintues Story--with a week's perspective

OK, it’s been a week since 60 Minutes aired their story—dubbed “The Cheaters”—about the Absolute Poker and Ultimate Bet cheating scandals, and I’m still so frustrated I want to pound sand! Steve Kroft’s segment included interviews with most of the people who unearthed the scandal, and I’m assuming he spoke to many more who never made it on air once the segment was edited down to fit the time available to it.

And he still got it wrong. At least he got a lot of it wrong. The first error was his statement that online poker is illegal in the United States. Untrue, and we all know that. What’s illegal outside of eleven states that specifically have legislation regarding online poker is that banks and other financial intermediaries can’t transfer funds to and from online gaming sites. However, in all but 11 states online poker is not illegal at all.

That’s the way it’s been since the Unlawful Internet Gaming Enforcement Act (UIGEA) was enacted two years ago. There’s nothing new there and surely the 60 Minutes team and their attorneys ought to have known the truth—and they should have reported it!

Although 60 Minutes called gaming law expert and law professor I. Nelson Rose to talk about the legality of online poker, they failed to include his opinion on air. Rose is on record as saying that online poker’s legal status depends on a number of factors, and “You can’t say for sure that online poker is illegal. There are too many variables.”

To their credit, 60 Minutes did an accurate job of telling how a number of online players first suspected, then uncovered the fact that cheating was taking place, and were able to trace the points of emanation where the cheating started, unearthing some of the guilty parties in the process.

As expected, Russ Hamilton was thrown under the bus, and once again identified by the Kahnawake Gaming Commission (KGC) as the main man responsible for cheating on Ultimate Bet. 60 Minutes also noted that no charges were filed and that Hamilton still resides at his Tournament Players Club (TPC) golf course home in Las Vegas. They also asked why no action was taken against Hamilton, even if affected customers had been repaid.

No one believes that this entire scandal can be placed at Hamilton’s doorstep exclusively. What 60 Minutes failed to do was to out some of the others who were identified as perps in the scandal. Scott Tom’s name was never mentioned. Neither was A.J. Grimard, (aka A.J. Green). The role of former host/consultant Mark Seif was not brought up at all, and Seif’s role in this affair is still a bit cloudy. An interview with Seif would have given him a chance to tell his side of the story, shed more light on this scandal, and clear his name in the process.

In addition, the 60 Minutes segment seemed very demeaning to the KGC, even going so far as to diss their facilities for being “non-descript,” as though a server farm in a remote location really needs an impressive building to transact business. Had the tribe located their facilities in luxe digs, they probably would have been skewered even more for a lavish lifestyle and “excessive” profits.

The quality of tribal buildings were not the subject of the story at all, didn’t relate to the scandal in the least, and given the short time 60 Minutes was able to devote to such a complex, and in some ways convoluted story, the show’s producers would have been far better off sticking to the main thrust of the story and not spinning gratuitous remarks to their listeners about the tribe’s architectural environment.

So what can I say? They got part of it right, didn’t get other parts of the story at all, ignored much of it, and spun a sort of elitist, incorrect view about much of it. I’ll grade them a “C,” and I’m being generous.