Were the Feds Bribed Into Shutting Down Major Online Companies?

When I originally heard the news that Pokerstars, Absolute Poker and FullTilt had been shutdown by the feds I assumed this meant curtains for the entire U.S. online poker industry. But so far that's not the case.

The big three had maybe 90% of the market share, but there are a half dozen other sites that have had small, but significant player bases. Is it possible that one of these sites will become the new leader in the U.S. market or will the rest of these sites get picked off as well?

I'm not one to put forth conspiracy theories and I don't spend much time thinking about what goes on behind the scenes in government, but something just doesn't add up here.

About a year ago the state of Kentucky tried to seize the domain names of a bunch of online casinos, poker sites, and sports betting sites just like the federal government did on Friday. They weren't able to do it because the state government just didn't have enough muscle behind it. But many of the sites took action and blocked users who lived in Kentucky so they wouldn't get sued.

Did Kentucky go after Pokerstars, FullTilt and Absolute? Of course they did. But here's where it gets interesting. They went after over 140 other sites as well. Online poker rooms and casinos are not trying to hide so I'm sure all it took was an afternoon pounding the keys on Google to generate that list.

There is a pretty big difference between 3 and 140. I get spam e-mail from 3 online casinos a day and you'll find ads for at least 7 or 8 in every issue of every poker magazine.

So why did the feds stop at the big 3 instead of going after everyone? Because someone at one of the other half dozen sites that has a chance to inherit the U.S. online poker kingdom bribed someone high up to make sure the shutdown only affected the big 3.

It's like in the movie Heat when Tone Loc trys to trade information about Robert De Niro's crew to Al Pacino in exchange for Pacino shutting down the chop shop across town so that Tone's chop shop can prosper. It was a minor sub plot at most, but you get the idea.

Pokerstars was making billions of dollars off the U.S. market. Not millions, not tens of millions, not hundreds of millions - BILLIONS! All that demand is still there and all you have to do is look at what happened in 2006 to see the effect of the industry leader stepping aside.

Party Poker was King in 2006, Pokerstars was a Duke and Fulltilt was more like the manager of the local brothel. But when the Unlawful Gaming Enforcement Act passed Party Poker left the U.S. market and in a matter of a few short months pokerstars had swallowed up most of their customer base with Fulltilt scooping in some sizable crumbs.

If things stand as they do today, one of these smaller sites like Cake Poker, Carbon Poker, Bodog or Doyle's Room is going to blow up and a handful of people are going to get very, very rich. Actually there's no chance of it being Bodog because their software is a steaming pile of shit.

Maybe these other dominos are going to fall...but maybe not.

Should Online Gambling Be Illegal - A Mashable Poll

As part of my new job I read a half dozen daily e-mail news letters to stay up to speed on what's going on in the worlds of technology, the web, advertising and online media. One of the newsletters I skim a few times a week is Mashable.

On Sunday Mashable had an article about the shutdown of Pokerstars, Fulltilt, and Absolute Poker part of which was a poll. More interesting than the poll results was the question - "Should online gambling be illegal."

This is a much different question that should online *poker* be illegal. Even though this is an online poker story and series of events, Mashable has done what so many other news outlets have done in the past and lump poker together with other forms of wagering.

So should online gambling be illegal? Probably. Games of chance that have totally fixed odds (meaning they're always the same not 'The Fix is in!' - actually the fix is in and everyone knows it) and little or no chance for the player to affect the outcome do not belong on the Internet. Those are my personal feelings, but frankly I can't back them up with logic.

If you want to be a total fuck head and play online craps it really shouldn't be up to the federal government to make that decision for you. They're not trying to save you from buying a TV that costs as much as a months pay or buying some sweet rims for that 86' Buick Skylark.

You can go spend $5,000 on Superbowl tickets for a game that lasts 3 hours and most people would think that it's fine if you want to spend your money that way. But most of those same people would think you were totally nuts if you went to a casino and lost $5,000 even if it took you a week. To them it doesn't matter if you had a great time. All that matters is that they know that gambling is bad and wrong and you shouldn't do it because that's been beaten into their brain from the time they were 5 years old.

Should wagering on games of skill online be illegal? Absolutely not! (If you'd like to argue that poker is a game of chance and not a game of skill, just don't - you're wrong). Don't tell me what I can and can't spend my money on. If I want to piss it all away, that's up to me.

I'm in favor of any game with any element of skill being played for money online. I'm talking everything from Chess to Hearts to board games. I'd love to play a winner take all game of Monopoly for $5 every now and then.

Now some of you might say Monopoly is a game of chance. I would disagree there, but would say there's room for debate. I tend to think that anything that involves decisions and certainly negotiation of trades means it's a skill game with an element of short term luck. Think about it this way, do you think you could beat an average 10 year old more times than not?

So what was the exact poll at Mashable and what were the results?

Yes, it's now a victimless crime and people will do it anyway - 2,888 votes (53%)

No, it makes it too easy for people to become addicted to gambling - 793 votes (15%)

Maybe, if it's tightly regulated to prevent cheating and fraud - 1,727 votes (32%)


I have to say that this poll is garbage because they didn't ask the right question and they put to many qualifiers in the answers. Can't I think no without the reason being my concern for gambling addicts? Can't I think maybe without my only concern being cheating and fraud?

What's interesting is that despite what the average American might think online poker on the sites that were just shut down was EXTREMELY regulated to prevent cheating and fraud. Now players will be shifting to other less reputable sites which are less regulated and more dangerous.

Even with my complaints I'd like to note that only 15% of people said flat out no.

What do you think? Leave me some comments if you have an opinion.

More on the Fate of Online Poker

24 hours after the Federal Government shut down online poker in the U.S. you now get a message from the FBI if you try to log on to Pokerstars, Fulltilt or Absolute Poker from the web. If you open the software you get a message telling you that U.S. players can no longer play for real money, but your money is safe and they've had to rework the guaranteed prize pools for their tournaments.

My prediction is this will be the effective end for many of the medium sized sites. Pokerstars and Fulltilt are so big that even though they've lost 50% of their customers overnight they'll be able to survive.

I don't think others will be so lucky. I expect familiar names like Cake Poker, Doyle's Room and maybe even Ultimate Bet and Absolute Poker (who were all in trouble anyway) will become total ghost towns and may close up shop.

Like I said in my last post, in the long term this is good news. Pokerstars and Fulltilt are losing tens of millions of dollars *every day* that poker is shut down in the U.S. They and all the people who have been playing poker online in the U.S. finally have some real motivation to get pissed and give a real push for change.

When the day comes that Average Joe U.S.A. can deposit with a credit card and be sure that his money is safe the influx of players who have no clue what they're doing is going to be overwhelming.

I'm not just talking about people who have never played poker before. I'm talking about people who play in Vegas and people who have played in home games or local casinos too. People who feel like they know what they're doing, but are playing at a pretty basic level will be everywhere. They will certainly have no chance against me or other online pros (and former pros), and will probably get crushed by even the players who are skilled enough to be small to medium losers in the current online poker world. A pit bull might be pretty tough, but not in a fight against a lion or a grizzly bear...or a T-Rex! CHOMP!

In related news I've read that "online poker" is being legalized in Washington D.C. As far as I can tell sometime around September if you're within the boarders of D.C. you'll be able to play against other people who are within the boarders. Also there will be terminals in bars and hotel lobbies and other hot spots where you can play even if you don't have a computer.

The big red flag here is that it's going to be run by the D.C. Lottery. The worst thing for players is to have one entity as the only game in town and to make it worse it's a government agency. The software they're going to roll out is going to be a steaming pile of shit. Paradise poker circa 2000 will look like Pokerstars software circa 2015 compared to what the people at the lottery are going to put out.

More importantly - IT'S THE LOTTERY! The Lottery is the one wagering entity that is more used to squeezing every drop of blood out of it's customers than any other. Typically 40% to 50% of the money wagered on lotteries goes to the government that is running it. That is roughly 3 times worse than the *worst* bets in a Vegas Casino 10 times worse than the bad games like roulette and 30 times worse than blackjack and some of the bets on the craps table.

My guess is the D.C. "Online Poker" will have the highest rake ever seen at a poker table with the shittiest software.

Online Poker Goes KA-BOOM!

It only took 4.5 years for the federal government to act on the bullshit, confusing legislation they passed in late 2006. Legislation that was 40 pages long and didn't define anything. Honestly a better bill could have been written by most college freshman.

In a speedy 4.5 years the fuckheads in Washington finally decided to do something to shut down online poker in the U.S. They froze all of the payment processor accounts and more importantly seized the domain names of Fulltilt, AP, Pokerstars and others.

You can read the whole indictment here: INDICTMENT!

The software still works and you can still go to the website, but you can't sit in a real money game and I hear that you can't cashout from some sites.

Personally, I did however manage to cash out the last $500 bucks I still had sitting on AP (luckily I cashed out everything but that last week and the money hit my bank account today), but that doesn't mean I'll get it anytime soon or ever.

I have about $100 on Bodog and just to test the waters I put down a $10 bet that Derek Rose would average less than 25 points per game in the 1st round of the NBA playoffs. Surprisingly everything seems normal there.

The dream is that online poker will be 100% destroyed in the U.S. and will then come back with U.S. based poker rooms. If the day comes when average Joe USA can deposit with a credit card and feel sure that his money is safe, the cash is going to start pouring down from the heavens for people like me.

If I could go back to early 2004 with the skills I have now I could make $200 an hour. Full blown U.S. based online poker could bring games as good as those of that era.

My condolences go out to everyone playing online poker for a living. It's a sad day for all of you and best of luck in the transition to the next chapter of your professional lives. And a BIG fuck you to the handful of people that tacked the UIGEA onto the Safe Port Act of 2006. You're all a bunch of cowards.

Now that I've taken some time off I'm actually excited to play some poker every now and then. I imagine I'll join the ranks of the weekend warriors at the Oaks club and other bay area card rooms. I think the 2.5 million hands I've played online might give me a small advantage. :)

Beating the Shit Out of Low Stakes Players

While writing my last post I jumped into two $10 multitables, and one $20. I cashed in all three for a net of about $75, and then took $150 off the $1/$2 tables on bodog and AP in about 200 hands. $150 isn't exactly a ton of money, but it is 75 big bets which is a beatdown no matter how you spin it.

$1,000 bankroll increased by more than 20% and up to $1,225. Suck it low stakes jerks!

Rebuilding

My bankroll is at it's lowest point in 10 years. I was a skinny, wide eyed 21 year old (OK not that skinny and maybe more squinty and shifty than wide eyed) playing $3/$6 limit hold'em 10 handed at the Oaks club about 10 hours a week the last time I had this little to work with.

But I don't really need a bankroll anymore. The crushing vise of monthly expenses is now being held open by a paycheck. A paycheck that comes in good times and bad and reads exactly the same, down to the cent, every month.

I've seen a few of the top pros start with very small bankrolls (orders of magnitude less than I have) and turn them into something significant as a personal challenge. The point is to prove to others and themselves that they could start from scratch and make it all over again.

I've forgotten his name, but one of the top SNG players set a goal to take $5 and turn it into $10,000 in one month. One thing he had going for him was that he was a mental freak of nature and had an ideal set up in terms of many huge monitors allowing him to play up to 300 SNGs in a day.

Also he cheated. He lost his $5 bankroll many times and simply started again with another $5. I could make $5 Keno bets until one hit big and then say "Look! I turned $5 into $1,000 playing Keno! In the end, if you ignore the cheating aspect, he did it.

More impressive was Chris Ferguson turning *zero* dollars into $10,000. He started with freerolls only until he could scrape together a couple dollars and then shifted to playing at the micro stakes. Once he had $50 or $100 it didn't take him long to go the rest of the way.

I had about $3,000 when I started my career as a prop player in July of 2003. In April of 2004 when I went off totally on my own and starting playing 90% online I had about $10,000. In the good times from 2005-mid 2008 I kept at least $30,000 to work with and made a great living working about 30 hours a week. From the end of the flush years until the fall of 2010 I typically had a $10,000 bankroll and was still able to support my family of three entirely from poker winnings.

Now I have a job and a $1,000 bankroll. The job pays for the 3 bedroom house in Northern California, keeps the lights on and puts food on the table, but not much else. Playing poker is going to be the difference between bud lite and burgers or pinot noir and filets for a while.

For some people it might be hard to drop so far down in stakes. After all, I've played 6 tournaments with buy ins of $5,000+, 75-100 with buy ins of $1,000+, I have no idea how many $200-$500 buy in tournaments, and now I'll be locking horns with the $10 and $20 players. For me, I don't really care. It's not about the thrill of victory or getting in Carplayer magazine any more. It's mostly about dollars, partially about about fun, and a little bit about delivering soul crushing beats to egomaniacal college kids (You know who you are! I'm coming to crush you!).

My new job has exposed me to google analytics and I've discovered that I have about 500 people visit my blog each month which is more than I thought and makes me feel like I should get back to writing at least weekly.

I'm not sure what I can do with $1,000 playing 10 hours a week, but I'll try to keep you posted. Hopefully it will all be good news.

On to the Next Chapter

After about 3 months of part time consulting, I started working full time at www.hitfix.com last week. If you haven't heard of HitFix it's an entertainment news website with about 1.3 million unique users a month that covers music, movies and TV without the gossip.

HitFix has about 20 employees and I've been hired to be the Business Development Manager. Essentially I'll be finding and negotiating with new partners, offering input on how HitFix does everything from the smallest details to the long term strategy, and doing everything the CEO needs to get done, but doesn't have time for.

So far it's been great. I'm still working from home and I've really been enjoying using my brain in new ways. Of course getting paid every day - even on the bad days - feels like a special treat after 7 years of ups and downs.

Looking back I can't believe the amounts of money I had on the line day in and day out. I lost enough to pay my mortgage for 3 months in an hour once. Of course there were a handful of times that I won enough in a day to pay my mortgage for a year or more.

I'm going to miss those days walking around with a stack of hundreds in my front pocket so thick that it looked like I had two decks of cards in there. But I can't remember ever being so relaxed.

Amazingly I think I am gambled out. It took 10 years, of poker 6 days a week and 25 days a year in Vegas, but I've finally had enough.

I'm sure I'll eventually get back to playing somewhat regularly. When that happens I'll try to get back to posting about my experiences at what will be comparatively low stakes.

The best part is if I do play and win, I can spend that money without having to worry about saving it for my next big loss.

Thanks for reading!

Semi-retired

I started playing poker for a living in July 2003 and after more than 7 years of working for myself I got a job.

September was the worst month I ever had as a poker player. I got totally crushed and flushed the vase majority of my bankroll. I tried to recover in October, but my confidence was at an all time low and no matter how far I dropped in stakes I couldn't seem to make it work. I didn't play for any significant stakes in November or December and my action was limited to a few dozen $20-$50 multitalbes, 2 or 3 $200 tournaments in person and a half dozen sessions at the Oaks Club.

Sometime in October my wife and I decided that one of use needed to get a job. Since she has a mechanical engineering degree from Berkeley she was the prime candidate, but as we all know this is a terrible time to be looking for work.

I applied to a few jobs as well. The most interesting by far has been ring games manager at pokerstars. If you look at the list of qualifications and skills required I am a slam dunk candidate, but the guy in charge of hiring is in no hurry to hire anyone so that is still pending. Even if I get offered the job I'm not likely to take it since it would require moving to the Isle of Mann (really!). I've spent the time since I applied trying to decide the dollar about it would take to get me and my family to move 6,000 miles. It's a lot, but not so much that I think there's zero chance that I'll be offered that much.

But as I said above I actually have a job right now. I'm working in a two tiered capacity at entertainment website www.HitFix.com. The first part is developing a game that is the bastard cousin of fantasy sports but for reality TV. Our first show is going to be American Idol and the game should be up and running for the top 20 show on February 24th.

On top of that I've been working in a business development capacity generating leads for partnerships as well as doing some general quality control for the website as a whole. Some of you might be thinking "What the hell do you know about working for an entertainment website? You're full of shit!" All I can say is so far I know a lot more than I thought. We'll see how it goes.

As far as poker goes, this year I've made about $700 in 10 hours playing $13 Ultra Turbo tournaments on Absolute, but we all know that that's just running crazy hot at those stakes.

For now poker is on the backburner as I dive headfirst into the world of entertainment news!

Let's Oak it Up!

After my recent online woes, I've been taking a break and spending a fair amount of time at the Oaks club playing against live opponents. The 15 minute commute isn't as fun as the 10 second commute from my bed to my computer, but I guess I can't complain.

The biggest game at the Oaks is $30/$60 limit hold'em and there are a few solid regulars. I have my eye on that game, but for now I'm sticking to $15/$30 where it seems not a single player is any better than just average.

Most players let their ego get in the way of making the best decisions in spots like these. Do I think I can beat the Oaks club $30/$60? I'm 99% sure that I can. But that doesn't mean it's the most profitable thing to do. Even if I'm the best player in the game, if everyone else is pretty good, I'd rather play for less money against a bunch of greatly inferior players. Even if the money is the same long term it's better to win one big bet per hour at $15/$30 than half a big bet per hour at $30/$60 because you'll face smaller fluctuations and less stress.

I've played 6 sessions averaging about 5 hours apiece and picked up $1,743 in the process. This is a very, very small set of data, but it's not an accident. There are no pros in the $15/$30 game and recreational players just can't keep up with someone who has played well over a million hands of limit hold'em against tough competition.

Another thing that's great about playing in person is players can't dodge me. Players mainly stick to one stakes and if there is only one game going they are stuck. No one is going to leave the game just because I joined and it got tougher. Whereas online there are a zillion games going and it takes 30 seconds to get into a new one.

Hopefully I can keep the money rolling in from the Oaks players for a while.

When to Go For It and When to Hold Back

I wrote this post on 10/20, but didn't finish it until 10/24. Rather than fix stuff like "yesterday" or "last Saturday" I just put this little sentence in.

I've been playing a lot of small stakes multitable tournaments lately with some success. In fact I keep cashing for about $1,200.

Shortly after my last post I finished 2nd in a $55 tournament with 100 or so entrants on Absolute which paid $1,150. Then on Saturday I had a $2,000 day, $1,175 of which came from winning a $22 tournament with about 200 entrants on Pokerstars. And yesterday I finished 3rd in a $55 tournament on Absolute with 241 entrants which paid $1,200. Of course I have been playing a lot of tournaments so it's not like that's all profit, but it has still been a good run.

During my time at the tables recently I came across a risky situation where going for it was clearly the thing to do in a spot where weaker players might not have and another where taking a very conservative approach was the way to go.

The first situation came in a $55 tournament on pokerstars with about 1,100 entrants that paid 153 spots. The blinds were 500/1,000, I was in the big blind with 14,000 chips behind, and we were down to 157 players. I got dealt AQ suited and when the action made it around to the small blind he moved all in for 20,000.

We'd started the tournament with 3,000 chips so I wasn't too far off of average which was about 21,000. The decision I was faces with was, fold and make the money for sure or call and potentially go broke.

Almost all pros would agree that if you can avoid risking your whole stack on one hand you should and anyone can tell you that going broke just short of the money totally sucks. Also often times when a player overbets the pot preflop like this they have AK which would completely dominate my AQ.

With that said, my opponent knows we're only a hand or two away from making the money and if I was in his shoes I'd be raising any two cards from the small blind (I wouldn't got all in with any two, but I'd raise something).

What was running though my mind was if I played this situation 100 times (or 1,000) would I make more by folding and bringing home at least the $75 for 153rd place 100% of the time or would I make more by sometimes going broke and losing my $55 but in but other times taking a stack of 31,000 (about 150% of average) into the money?

I'd be pretty close to even money against an underpair, but I'd be 3 to 2 against suited connectors, 2 to 1 against total garbage unders and 7 to 3 against a worse ace. Most importantly I thought the chance of being dominated by AA, KK, QQ or AK was negligible. Those hands make up about 2% of the starting card combinations and even with AK it would be a rare opponent who would move all in here.

Pile that all together and I figured I was at least 60% against his range. Now if you do a detailed analysis you might find that it's worth about $84 more to call than to fold. Of course you might not find that because you worked it out correctly and the shit I just did is total garbage loaded with fallacies. Which is why I deleted it out of frustration! With that said, $84 seems about right.

The brass tacks is, even though I was just short of the money it was still worth it to go for it. In the end I let my time bank run all the way down to give myself the best chance to sneak in to the money before I called. When the cards got turned over I was up against A6 off suit which meant I was 72% to win and 6% to tie.

A 6 came on the flop and I finished 155th, but despite that fact it would have been a major mistake to fold here.

At the same time I was playing in a $55 tournament on Absolute with about 100 entrants (I mentioned it above). I went into full on beast mode and by the time we were down to 5 players I was in first with 75,000 chips. The player dead to my left (let's call him Jerk Face) was in second with 70,000 and the other three players all had between 10,000 and 20,000.

One of my great strengths is finding situations where I can raise with any two cards and show positive expected value. After you've played a zillion tournament you get a sense for when other players are going to fold unless they find a total monster hand. At most final tables in tournaments of this size with players of this caliber playing loose aggressive is the only way to go. Every now and then you'll blow up an finish 8th or 9th, but much more often you'll end up at the top. When I get to a final table with an average stack or more I tend to win outright.

As per usual, in this case it was my aggressive style and not the cards I was getting that led to my sizable stack. But when we got to five handed I had to shift gears. On the first hand that we were down to five players I raised, and Jerk Face reraised me. I had total air so I folded. The next time I raised, he reraised me again and again I had to fold. The time after that he moved all in on me with no hesitation. Quit reraising me Jerk Face! At that point if I was going to play a hand it had to be one that could call a suspect all in reraise.

After those three hands the tables had turned a little bit. I was down to 50,000, Jerk Face was up to 95,000 and everyone else was under 15,000. Tough guys always say "I play for first" and generally that's what you should do, but in this case playing for 2nd was clearly the way to go.

Jerk Face was rolling over everyone and they were giving no resistance. While first place was just over $2,000 and that's what I was really shooting for, 2nd was almost $1,200 while 5th was only $500. My 3 short stacked opponents seemed committed to playing super tight and trying to move up one more spot.

I could stand up to Jerk Face with a hand that was better than average (like KJ or A9) since I knew he was on the "any two" track, or I could get blinded off a little and probably end up in 2nd place.

This was a rare situation where playing like a total pussy was actually the best way to go. I'm not saying I was folding premium hands, but I wasn't taking any chances. Just like clockwork, three of my opponent were ground down to a few big blinds, got their money in with Ax and went broke. By the time it was heads up I was down to 40,000 facing a stack of 160,000 which wasn't great, but anything can happen heads up. More importantly I had $1,150 locked up. I got it all in with A5 and lost to KJ, but I was still happy with the 2nd place. If I'd tried to be a tough guy I easily could have finished 4th or 5th and left a few hundred bucks on the table.