Photo by Brian Bentley @ 2009 WSOP Main Event

Friday, July 22, 2011

2011: Online Poker Goes Broke and the WSOP Cashes

When an unknown named Chris Moneymaker won the Main Event at the 2003 World Series of Poker, it marked the beginning of a poker boom that elevated the game from a curious pastime enjoyed by old folks, professional gamblers, cowboys and convicts – to a full-blown multi-billion dollar industry. It took the emergence of the Internet and its dominance by the youth of America to fuel an explosion of unprecedented interest in poker as an occupation. Suddenly, every third dorm room seemed to have its own feature table, and ESPN’s finely crafted coverage of the WSOP created millions of Moneymaker wanna-be’s. The online poker gaming sites became more sophisticated in their marketing approach, while the advertising dollars seeking the money that kids spend flowed into poker TV shows and affiliated media. All these contributing factors snowballed to spur huge expansion and a golden era of positive expectation.

Against this sunny backdrop of prosperity and growth, loomed the specter of the UIGEA. Passed in 2006, the Unlawful Internet Gaming Enforcement Act did not make poker a crime for individuals to play, but made it illegal for online sites like Full Tilt Poker and Pokerstars to transfer gambling money back and forth. Enforcement of the poorly worded legislation never really happened. Online poker was sort of like pot – there were laws making it a crime of sorts, but everybody just kept doing it anyway.

On April 15, 2011, the deadline for Americans to pay their rightful taxes, the abstract threat posed by the UIGEA became a shocking reality. In a vicious and ham-fisted display of authority, the Department of Justice seized financial control of U.S. operations at Full Tilt, PokerStars and Absolute Poker. The charges were serious: money laundering and bank fraud. Black Friday crippled the poker industry. Online American poker players lost their jobs and the game lost its revenue stream, its momentum and maybe any chance to finally connect with the average sports fan.

In the six years since the passage of the UIGEA, nothing has been accomplished to legalize Internet poker in the U.S. Politicians like Barney Frank have drafted bills that never came close to passage. Individual states have thrashed about to analyze legalization measures amidst confusion, discord and apathy. With an election year approaching, few politicians are eager to go on record supporting a game that most Americans don’t understand or care about. Meanwhile, the anemic and woefully disorganized Poker Players Alliance buys full page ads in the trade magazines vowing to take the fight to the streets and the card rooms of America. Missing is any kind of real plan or cohesive vision for giving people back the right to play a game of skill for money in the privacy of their own homes.

The trickle down effect of all this dysfunction has hit hardest on the poker media. Gone are the creative, revenue-generating, black and white TV spots for Full Tilt that heavily funded the WSOP on ESPN and network shows like NBC’s Poker After Dark. Magazines like Card Player and Bluff have seen their ad dollars cut in half and their pages shrink with each issue. In the three months since Black Friday, the people employed to write, broadcast and chronicle the game are living in a diminished world. The death of online poker is the loss of the coveted 18-34 market – and paying to reach that audience is what pays the bills for everything else. Until (or if) online poker is legalized in the U.S. and major advertisers return, growth is a distant memory, and hanging on for dear life will be the order of the day.

With all this depressing bullshit going on, bad publicity and petty feuds have hurt the image of poker and turned the public off. The Tobey Maguire nosebleed home game scandal made tabloid headlines, while the aging trade, Card Player Magazine, continued its pissing match with Harrah’s Entertainment. For the first time in memory, publisher Barry Shulman didn't print preview articles on the WSOP and ignored the biggest event in the poker world – kind of like Sports Illustrated pretending the Super Bowl doesn’t exist. In the void, Bluff Magazine stepped up to cover Black Friday’s impact on the WSOP in a comprehensive manner that should earn them some respect.

Following the recent shutdown of Doyle’s Room and the expected prosecution of Bodog, online poker is done in America. Full Tilt has emerged as the real bad guy in its downfall. The abysmally dishonest and fraudulent website is intent on establishing itself as perhaps the sleaziest business to ever operate inside (but outside) of U.S soil. Full Tilt owes U.S. players 60 million dollars, and has yet to give anyone back their money – 60 million bucks that could be flowing into the poker economy. Poker pro Howard Lederer, a Full Tilt owner and self-righteous shill, actually had the insufferable gall to tell one reporter that the company will cash out players “When we get around to it.” For good reason, Lederer could be seen nowhere at the WSOP this summer, as he might have had trouble leaving the Rio in one piece.

After much of their finances were seized, Full Tilt no longer has the funds to pay players anyway, and is seeking outside financial backers to bail them out. Meanwhile, their self-inflicted problems continue to mount. The site removed most of its own forums when the chief thread of conversation this year revolved around the alleged theft of approximately 3 billion dollars from player accounts.

According to vocal critics like former FT pro Mike Matusow, Full Tilt stole from thousands of tables at various stakes. Software bots (fake players the site created) would join a table and suck out on impossible long shots, like rivering a higher straight flush to beat a lower straight flush – and then immediately log out to cash. It’s sad and almost funny that despite the global corporatization of poker, the business continues to be dominated by thieves and shady back room deals. One of the numerous DOJ investigations surrounding Full Tilt theorizes that the website shared some of its money laundering techniques with drug dealers, a revelation that perhaps sullies the reputation of drug dealers by association.

This brings us back to the fascinating goings on at ESPN and Harrah’s Entertainment and how much both companies have profited from the misery of others. In April, the DOJ dropped the hammer on online poker. While everyone else is updating their resumes, the only end of the business that seems to be thriving is the partnership of Harrah’s and ESPN, a deal which runs through 2017. After dumping poker from its programming like an old girlfriend after Black Friday, ESPN mysteriously flipped and increased its Main Event coverage this past week to spectacular heights, offering poker junkies over 30 hours of live, no-hole-cards shown action. Depending on your interest in the game, ESPN’s live programming has either been a fascinating behind-the-scenes glimpse at the world’s biggest poker tournament, or a pointless exercise in tedium, akin to watching paint dry. Is it just me, or does someone need to institute a mandatory three-minute time clock that forces players to stop stalling and play cards?

Whether or not Harrah’s paid off the U.S. government to shut down online poker will be a subject that’s debated for years, but it should be duly noted that Nevada and Washington are the only states to criminalize online play, and at least one of these states has outlawed it for commercial reasons. Don’t be surprised when one day in the not-too-distant future, Harrah’s or positions itself as the only legal online poker site, and rakes in the billions once enjoyed by the Big Three. How could this strategy not succeed? For poker players who used to play online, there are only these scary choices: leave the country to play legally, get friendly with the cheesy, local home game, or head for the nearest casino.


So what effect would all this bad news have on this year’s WSOP? As is my usual custom, I headed out to Vegas for a few days to check out the Main Event. The early projections of a less than 3,000 player turnout were quickly dashed when the field swelled to 6,865 by the end of Day 1’s entry deadline. The big numbers were a shock as the 10 grand entry fee is a chunk of change, and players could no longer satellite-in from online qualifying tournaments. It was also assumed that since players who busted out of earlier tournaments had no way to reload their bankrolls by playing online, by the time the Main Event rolled around, many of them would be broke. But Ben Lamb probably said it best when he told ESPN’s Kara Scott that, with the demise of online poker, players reasoned that this year’s WSOP might be their last chance to make some serious money.

By Day 2A, the vibe in the hallway outside the Amazon room was muted. After all, what’s a Main Event without Phil Ivey? The side rooms that once played host to lavish industry parties were empty and the only logos on display were for foreign poker sites with weird names. Since no admission is charged, the WSOP has never been a particularly fan-friendly event. No attempt is made to seat better known players near the rail, so all the best action tends to occur in faraway corners.

Overall, the play I saw was disturbingly loose. It was not uncommon to find two players locked in a hand and raising each other on every street, with high card taking down the pot. Call it ruthless aggression or donkey poker, but several pros, most notably the volatile Jeff Lisandro, seemed annoyed. Other veterans were floundering. J.C. Tran was his usual too-tight self. At one point, the player to his left 3-bet Tran’s min raises several times in a row, and J.C. folded each hand with a murderous look in the guy’s direction. Mike Matusow was short stacked and shoved all-in with K-K, after the board flopped dry and 10 high. The Mouth got one caller who turned over 10-10, and when the caller’s trips held up, the ESPN cameras arrived just in time to capture Matusow’s uncharacteristically polite exit.

There are certain advantages in watching a poker tournament in person that TV can’t duplicate. One is the freedom to watch anything and anyone you want at the table, not just what the camera will allow. TV also doesn’t capture the buzzing, clickety-clack sound of a thousand players in a giant ballroom riffling and shuffling their chips, like a sea of crickets absentmindedly doodling away and lost in thought.

Several funny observations stand out from this year’s Main Event. One was listening to the table talk while Jimmy Fricke dryly recounted a series of e-mails he exchanged with Howard Lederer, where The Professor made Fricke promise that he would not share Lederer’s personal e-mail address “with anyone, especially players.” Another was running into Steve Dannenmann, Andrew Black and Joe Hachem embracing in the hallway, as if the 2005 Main Event Final Table was just last week. Then there was T.J. Cloutier at the crap tables, throwing out $1,000 on every roll of the dice and losing bigtime. I wonder if T.J. still has any WSOP bracelets he hasn’t pawned yet. But my favorite moment was standing next to three tall, blonde, stripper/model types railing a huge player in his 60’s with a fat cigar. “Do you want us to wait in the limo, or just like stand here… or what??” one of them asked.

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