Legal US Poker Sites?

If you are a poker players and you live in the United States, you know what’s happened over the past 6 months in the world of online poker. Even though you are only playing against other players and not against the house, say as in the game of blackjack, the government still views poker as online gambling.

That should mean that there shouldn’t be any legal poker sites in the United States. Because, in the end, if you put up any money to play poker online, it still should be gambling. Right?

Apparently not. In addition to the few sportsbooks that still allow online poker as you remember it, which aren’t considered “legal”, there has been a new rash of poker sites with “subscription fees”. These new “legal poker sites” are allowed to hold cash tournaments because the poker players can pay $30 a month or so in subscription fees.

Way to skirt the issue. You can’t accept deposits for online poker, because that is illegal gambling. But you can pay a monthly service to play in cash poker games. How convenient! Then, these companies are right back to advertising to us. I’ve seen and heard ads on the radio as well as popular websites like ESPN.com.

There have been several that have come out recently. They are all trying to get the poker players that stopped playing online back in April. These ads all have the following phrase: “This is not a gambling website”. Then why are you advertising it? Are you just giving away free prizes and paying for the advertisements in this economy out of good will?

Of course not, this is a load of bull. So what you are saying is that playing poker online wasn’t the issue on legality. As long as you don’t pay for the chips, it isn’t illegal. Your not making a deposit, your just paying a subscription fee for the right to have a chance to win prizes. That’s splitting hairs and this issue is really starting to get me pissed off.

So for sites like ClubWPT.com, your not helping the situation by creating “legal online poker”. That implies that most online poker is illegal, and no federal law in the US states this specifically. They only use the Wire Act and UIGEA as surrogate laws to punish companies who broke the rules that were put in place by Big Business money. These websites are just taking advantage of a loophole and cashing in on thousands of players who love poker and don’t have anywhere else to turn.

That leads me to believe what all of the kooks have been saying for years. The system is systemically corrupted. As long as you have enough money, you can evade a law or even have one created in your favor.

As for me, I am currently playing a couple times a week at Bovada. I have sampled a couple of others that you will see in the sidebar, but Bovada has the best tables and tournaments right now.

More encouraging news

I listened in on a session of congress recently where they discussed the topic of future legalization of online gambling. It seemed like there were actually some smart people participating, both in congress and representing online gambling.

I understand the arguments that advocates of keeping it illegal are using. Yes, gambling addiction is bad. But having a prohibition on anything makes people want to do it in spite of your laws. By the way, thank you for the creation of organized crime with the alcohol prohibition and the creation of cartels with the drug prohibition.

People in Louisiana passed a law against gambling because they believed that people were going to commit more crime to get the money to gamble. While that might be partially true, there has never been a study that shows that allowing gambling increases crime in an area. When you make it illegal, the type of people who will participate already won’t have the strongest moral compass. At least 95% of people know when its time to stop and you have lost what you were gambling with.

There is also the issue that children can get their parents credit cards and rack up a large bill online. Two things about this: 1) If you have a legal way of accepting players, you can require information to prove that the person is an adult. 2) Say two words with me: Responsible Parenting. That is half of the problem with the US nowadays. The creation of a multitude of laws to protect ourselves from ourselves. Two more words: Natural Selection. “The kid that eats too many marbles doesn’t grow up to have kids of their own” – George Carlin

The last two issues that the people in congress had were legitimate ones. They both have to do with the companies that are offering the games. More specifically, it has to do with fairness and corruption with the software and the company. We can’t have another Absolute Poker scandal where the players can see the cards or another Full Tilt Poker scandal where a company doesn’t protect the player’s accounts.

That is fairly easy. You make it legal and all of the big players in Las Vegas will jump in. The companies that operate with questionable business practices will be found out fast and won’t be able to survive. It might be a 2 year free for all, but that is the case anytime new laws come on the books.

Lastly, if you are worried about the amount of money coming into the government, realize this: All of the money that Americans currently spend on online gambling are going overseas. The big players in Las Vegas can’t get any of this money, nor can that money be taxed by the government, legally. Last I looked, Las Vegas has been one of the hardest hit in this last recession. I know it won’t fix everything that is wrong, but creating an illegal demand because of your laws won’t stop people from doing what they want to do.

Full Tilt Poker Ponzi Scheme

By now, you have probably already heard this poker news; but it is something that I have to cover anyways.

I never had actually played on Full Tilt poker, mainly because I liked PokerStars better. But I did have a feeling that Full Tilt was up to no good well before this ESPN article dropped a week ago. You may very well have a similar story to the one I’m about to tell.

I play weekly in a poker league at a local bar. Obviously, some of the people in my league played on Full Tilt. I knew that something was wrong around January this year because 3 of them deposited money into their account and did not have it taken from their bank account. They didn’t ask or didn’t care but used the money to play poker. Then, they all were about to cash out the money that had never been taken from them in the first place.

They only did it one time and it wasn’t a willful attempt to defraud Full Tilt. They had made the deposit; what if they never looked to see if the transaction went through. If these guys who have a limited knowledge were able to do this, that means that there had to have been thousands of people doing this intentionally once they knew that they could.

Full Tilt’s Ponzi Scheme

A Ponzi scheme is traditionally an investment fraud that is purported by a money manager. This money manager will claim that they are making a large profit with the investors’ money and pay dividends on time. In reality, the profit isn’t there and the money manager pays the old clients with new client money. Eventually the system breaks because there aren’t enough new investors to keep the scheme going.

Full Tilt isn’t a classic Ponzi scheme in that sense. I don’t believe that they went in a gave Howard Lederer or Chris Ferguson money from the players’ accounts. They made the money off the rake and tournament fees. I just so happened that they wanted to go on “business as usual” when they couldn’t actually get the money from players’ bank accounts.

The banks were told to stop gambling related transactions from going through. Full Tilt got around that initially by setting up 3rd party companies who would say the transaction is for something like golf balls. They would make the transaction an odd number like $99.87 if you made a $100 deposit. Once the government shut down these services, Full Tilt couldn’t get money from the players.

However, they were still giving chips to the players who made deposits and that money that couldn’t be accounted for. Well, that money ended up accounting for about $150 million in players’ funds that didn’t exist in the first place. Full Tilt thought that there would never be a run on the bank, so they would eventually get the money back from the players who tried to deposit it before anything went wrong.

Too bad for them that the US government took their legs out from under them when they seized Full Tilt’s website and told them to stop accepting American poker players and to pay them back their money. PokerStars had no problem being able to do this (and I got my $500+ back from them) because they never tried to pull a scheme like that off. Full Tilt went into bankruptcy.

I used to think that once the dust settled Full Tilt would be bought by another company and come back under its own name. With the Ponzi label attached, I don’t think that can be the case anymore. That would almost be like another company taking the name of Enron. However, it is completely likely that the rights will be bought and the name will be re-branded. Those servers still have contact info for the many thousands of people from the US that played poker at Full Tilt.