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A Quiet Month in Poker . . . NOT!

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11:17 am
April 17, 2011

The Reno Rounder


posts 5

[NOTE: The paragraph starting with "But wait, there's more." was erroneously omitted from the original posting. The corrected version follows.]

The last three weeks have been astonishing. The Atlantis in Reno hosted their first large-scale poker tournament; I came in second on a televised final table; The Peppermill hosted their Deepstack Classic; I took a weeklong vacation with no email, TV, texts, web or telephone and some wanker(s) in the Federal Government tried to shut down all on-line poker. So which do you want to talk about first?

I guess we should start with the local news first. The Atlantis ALL IN poker series was, in my opinion, absolutely superb. Although the tournament took place in what is basically the hallway between the Atlantis and the Reno Convention Center, the venue proved quite nice. The large windows afforded lots of sunshine, a rarity in poker. So much sun, that for the first time in a long time I actually wore sunny’s at the table (in general, I hate sunglasses at a poker table, but that’s a whole other article entirely). The structure for all of the events were amazing. I don’t think I’ve ever seen that much play for such a small buy-in tourney. The Atlantis may have just stole the crown from the GSR for best deepstack structure.

I only got to play four events at the Atlantis, but my results were above par. The first event I played had a field of 60+ players for a $300 event. I took third when I lost a huge race three-handed. I played a $100 satellite for the main event with 140+ players and won my $1000 main-event entry. And in the main event, which will be nationally televised, I came in second out of 120+ players. The one tourney I played and didn’t cash, I ran my pocket Jacks into the dreaded Jack-seven offsuit of my, ummm, opponent – don’t ask . . .

The main event field was packed with pros, headed by Jen Harman. She made the final table and should have been near the chip lead starting the six-handed TV final table, but she got very unlucky with a set of sixes that got beat in two spots to players drawing thin and extremely thin all in on the flop. I just squeaked into the money on day one and started day two with five big blinds. I moved in on the first hand of play and got no callers – seven big blinds. From there I chipped up without ever being all in again until we were down to heads up. That’s how tight some people were playing for their shot on TV. I love it! Heads up came down to me and Cardrunner’s pro John Kim. He played great and got lucky in one huge pot five-handed that gave him the edge for the entire tournament. I look forward to playing him heads up again at another final table.

So on to the Peppermill Deepstack Classic. You may recall that I recently took issue with the Peppermill’s structure. I’m happy to report that the Peppermill has heard my and others’ complaints and have done some revisions to their structures. The stacks start out deep and still become pretty small, pretty quick, but the transitions are much more smooth. That means that the big blind no longer jumps from 20k to 40k at the final table. The tournaments still have a turbo feel, however, thanks to a high ante structure. At one point there is a 300 ante with blinds at 800-1600. That’s huge! There is really only one bit of advice in structures like this: BE AGGRESSIVE!

So that’s the local news. Let’s talk about on-line poker. On Friday, April 15, the FBI and DOJ indicted the owners of Full Tilt, Pokerstars and Ultimatebet on a variety of trumped up charges. The FBI also “seized” the websites for these on-line poker rooms. Go to pokerstars.com and you’ll see what I mean. First let me just say that the whole situation infuriates me. Do you realize that China, a nation notorious for curtailing its citizens’ on-line access to curb their basic human rights, allows people to play on-line poker and the US doesn’t? Or do you realize that the US is still violating a World Trade Organization judgment against it by trying to prohibit on-line gaming? (Ironically, on the same day as the indictment, US officials urged Russia to join the WTO to prove it would follow the rule of law and be a good citizen of the world). I could go on about how the hypocrisy of the Federal government here is appalling or how the dedication of law enforcement resources to this “problem” when there are real problems they could be dealing with is absurd, but the real bottom line is that the DOJ is pursuing a near baseless prosecution strategy to the detriment of US and foreign businesses and US poker players.

Why do I say it’s baseless? Well, because the whole indictment is based on an interpretation of the Wire Act (18 USC 1084) that has already been rejected by most courts, including the only appellate court to consider the issue. The Wire Act covers interstate “wagers on . . . sporting events and contests.” Despite coverage by ESPN, poker isn’t considered a sporting event or contest under the law as written. And even if it were, the bets made during a hand of poker are different from wagers made on the outcome of the contest. Thus, it could be illegal under the Wire Act to make a side bet on the outcome of a given tournament. For instance, it may violate the Wire Act for me to use my phone to call a bookie in New York to bet that Phil Ivey will win this year’s WSOP Main Event. Maybe that’s why nowhere in the indictment does it mention the Wire Act.

So if the Wire Act isn’t mentioned, how can I say the whole indictment is based on it? The indictment alleges five violations of the Unlawful Internet Gambling Enforcement Act (31 USC 5363), three violations of the illegal gambling business act (18 USC 1955), bank fraud (18 USC 1349) and money laundering (18 USC 1956). The bank fraud charge is perhaps the most interesting, so let’s set it aside for now. All of the other Federal laws listed above attack certain aspects of illegal gambling, but they don’t actually define what illegal gambling is. The UIGEA attacks financial institutions that handle financial transaction between illegal gaming operators and their customers. The business act attacks the business itself. And the money laundering act attacks efforts to hide the fact that money was made from illegal gambling. But none of these laws define what illegal gambling is. For that, they rely on other state and Federal laws, i.e. the Wire Act. So if the Wire Act wasn’t violated, neither were the other laws.

But wait, there’s more. Perhaps knowing it doesn’t have a leg to stand on, the DOJ references New York Penal Code 225. That New York state law makes it illegal to take actions in the State of New York that “materially aids any form of gambling activity.” There are many problems with relying on New York’s law. The first is that the law as written is probably too vague to pass constitutional muster. The second is that if the law is as broad as the DOJ would like us to believe, then there are a number of Federal agencies that probably violated the law. For instance, for the past several years the FCC has been allowing commercials and shows sponsored by the very companies the DOJ has indicted (The law specifically provides as an example of advancing gambling as having the control to stop property from being used to advance gambling, and failing to do so). The third problem is that companies like Full Tilt, Pokerstars and Ultimatebet don’t really do anything in New York. Perhaps that’s why the statute itself specifically references things like providing the premises for where the gambling occurs. If New York wants to make it a crime to gamble on-line, what they really need to do is make it a crime for the player to make the bets in New York. That’s what the State of Washington did. And shortly after Washington did, the sites started blocking the residents from playing. So again, if the state law isn’t violated, neither is any of the laws actually mentioned in the indictment.

Bank fraud is a little different. Apparently the DOJ’s theory here is that the on-line companies lied to banks in order to trick the banks into processing deposits made by customers to the poker sites, deposits that they otherwise wouldn’t process because of the UIGEA. But if the UIGEA wasn’t actually being violated, then the banks should have had no problem processing the transactions. The banks only needed to be tricked because the overzealous and misguided DOJ/FBI was wrongfully strong-arming banks into going along with the Fed’s twisted misinterpretation of the law. And we now know the UIGEA wasn’t being violated. Simply put, there was no fraud. When I gave Full Tilt my credit card number, I knew it was for gambling. Who cares if the bank thought I was buying flowers. They still got their commission on the transaction. If a poker site lied to the bank, it was only because the Federal government lied to the bank first by telling them on-line poker was illegal. So who should be indicted? That’s right, the Fed. Tell them that on election day.

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