Online Poker: Where Were the Regulators?

online poker

The poker world was rocked by the news last week that Amaya CEO David Baazov was charged with insider trading. Amaya has been under investigation by Quebec’s securities regulator the Autorite des Marches Financiers (AMF) since 2014 when the company acquired the Rational Group, the parent company of PokerStars and Full Tilt, for $4.9 billion.

The Era of Unregulated Online Poker

Full Tilt

This is yet another black eye for online poker. From January 1, 1998, when Planet Poker, the first real-money online poker site, dealt its first hand of Texas hold’em, to Black Friday on April 15, 2011, when the United States Department of Justice unsealed an indictment against the three largest online poker sites in the country, scandal after scandal has shaken the public’s and players’ faith in the industry.

I can’t help but ask, “Where were the regulators?”

I remember the late Terry Lanni, CEO of MGM Mirage, set up an off-shore Internet gaming site in 2001, which quickly folded. In an article in Las Vegas Review Journal dated Nov. 15, 2007, titled “Gaming Officials Say They’re Ready to Bet on the Web,” Lanni explained that though the site was unsuccessful, “the endeavor helped the company work out problems that will be useful when relaunching.” At the time of the article, Lanni predicted online poker would be legalized in 12 to 18 months.

This article was written nearly a decade ago, and not much has changed regarding the regulation of online poker. From the time the first hand of poker was dealt online in 1998 to the superuser cheating scandal at UltimateBet in 2008 when players were cheated out of millions by Ultimate Bet insiders, the Nevada Gaming Control Board had a decade to be at the forefront of regulating online poker; instead, they did nothing.

When the state should have been the leader for the worldwide online gaming industry, Nevada adopted a wait-and-see stance. The gambling capital of the world lost the opportunity to shape the future of gaming. Because the state choose not to be a leader in the emerging online poker industry, Nevada will forever be in catch-up mode, and it’s the players who have paid the ultimate price.

Whatever the politics are behind Nevada’s decision not to regulate online poker at the dawn of the industry, the Nevada Gaming Control Board’s responsibility should always be to protect the consumers. They failed.

What has bothered me most about unregulated online gambling is the hundreds of millions of dollars the regulatory agencies allowed to be stolen on their watch. People from all walks of life–blue collar workers, professionals, retirees and students—who all shared a love of poker were cheated out of millions, and many never recovered anything.

Nobody from the Ultimate Bets, Full Tilts or Lock Pokers has paid for what was done. No one has suffered except the innocent small players who just wanted to play their favorite game online.

It is the players who paid for the legal defense teams that defended the crooks at Full Tilt, and the small fines they were levied were nothing in comparison to the hundreds of millions they stole.

And the fact that disgraced former Full Tilt CEO Ray Bitar is reported to have recently thrown himself a million-dollar wedding is another slap in the face to these players.

Russ Hamilton plays golf every day in Las Vegas with no remorse. Howard Lederer has the gall to show his face at the Poker Hall of Fame induction ceremony in 2014 after running Full Tilt into the ground, and none of them has ever issued an apology.

This is a disgrace to the gaming industry that I love.

The Need to Legalize and Regulate Online Poker

UB-Absolute-Poker-Closed

There is always going to be greed in any industry where there is so much money, but it is the job of oversight and regulatory agencies to put consumer protections in place and regulate the owners and operators.

New Jersey also waited too long to regulate online poker. Instead players had to put their faith in regulatory bodies based on islands or territories they have never heard of like the Kahnawake Gaming Commission.

We now have Daily Fantasy Sports following the same path as online poker with hundreds of small sites popping up again with no oversight.

We as a gaming industry can do much better.

It was the players who uncovered the cheating at Ultimate Bet, and it was the players who lost when Full Tilt folded.

And now it seems PokerStars’ players will be footing David Baazov’s legal bills. In a twist of irony, PokerStars announced they were raising the rake the same week their CEO was charged with insider trading.

As Dave Gadhia, Amaya’s Lead Director and independent board member said in a statement, “”David Baazov has the full support of the independent members of the board.”

Amaya will stand by their man. Guess who’s paying?

Robert Turner is a legendary poker player and casino/billiard marketing expert. Robert is most well-known for creating the game of Omaha poker and introducing it to Nevada in 1982 and to California in 1986. He created Legends of Poker for the Bicycle Casino in 1995. He also helped create Live at the Bike, the first live gaming site broadcast on the Internet in 2002.

He has spent over 30 years in casino marketing and player development. He has served as an executive host at the Bicycle Casino and MGM. He is currently working as a casino consultant.

Robert can be reached at robertturnerpoker@gmail.com for consulting, marketing and coaching. Find Robert on Facebook at https://www.facebook.com/thechipburner and on Twitter @thechipburner. Subscribe to Robert’s blog “Beyond the Numbers” to receive notifications of new posts by email.

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It’s Time to Legalize Sports Betting

Sports Betting

There is a tendency to use euphemisms when talking about gambling. Being in the business for nearly fifty years, I have seen almost everything, but lately some have been trying to say some activities are not gambling when they clearly are. I like to call a spade a spade. I will dissect a couple of myths about gambling below.

Daily Fantasy Sports IS Gambling

DFS Is Gambling

The first myth is Daily Fantasy Sports (DFS) is not gambling. Let me start by saying it is gambling, and in reality there is about as much skill involved as there is in a lottery. When nine things have to line up just right for you to win, it’s no different than a parlay or lottery.

You can study all you want and call it skill if that makes regulators and the major sports leagues feel better, but it is still gambling. And if DFS is going to be legalized, then all sports betting should legal.

I’m going to come right out and say it: The time has come to legalize sports betting.

If skill is going to be the standard by which you legalize an activity, I can confidently state that when sports betting is done properly, it has more skill than DFS. An article from Harvard’s Institute of Politics (IOP) called “Should Sports Gambling Be Legal?” begins with the following lines that capture the essence of the debate:

“Few things are as American as laying down a few dollars on a football game. But oddly enough, sports gambling is illegal in all but four states—Delaware, Montana, Nevada, and Oregon.”

Why is that?

The Professional and Amateur Sports Protection Act

Christie

In 1992 the Professional and Amateur Sports Protection Act (PASPA), also known as the “Bradley Act,” was passed which outlawed sports betting nationwide with a few exceptions for the licensed sports books in Nevada and the sports lotteries conducted in Oregon, Delaware and Montana. Congress provided one year from the act’s effective date of January 1, 1993 for states which operated licensed casino gaming for the previous ten years to pass laws permitting sports wagering.

In the February 2013 the New Yorker ran a piece called “A Call to Action” by James Surowiecki about New Jersey’s efforts to legalize sports betting. He starts the article by stating the obvious: billions of dollars are being waged in states where sports gambling is against the law.

Surowiecki then goes on to detail New Jersey’s battle with the federal government and major professional sports leagues to change the law. The first step was New Jersey voters approving an amendment to the state constitution legalizing sports betting in 2011.

In his article, Surowiecki quotes I. Nelson Rose, an expert on gambling law at Whittier Law School, describing the law as arbitrary. “It’s as if in 1929 Congress had decreed that a dozen states would be allowed to have sound in the their movie theatres and all the other states would only be allowed to show only silent films,” Rose says.

Surowiecki notes that though “all the states except Utah and Hawaii have commercial gambling in some form,” sports betting which involves more skill than a lottery, is restricted to only four states.

A major obstacle to the legalization of sports betting is that the major professional sports leagues state that wagering on sports harms their brands while at the same endorsing daily fantasy sports. It seems they want it both ways, but I believe the tide is turning.

In November 2014 NBA Commissioner Adam Silver wrote a New York Times op-ed called “Legalize and Regulate Sports Betting.” He calls a spade a spade and acknowledges that sports betting is “a thriving underground business that operates free from regulation or oversight.”

We all know what is going on. As Silver states, though “there is no solid data on the volume of illegal sports betting activity in the United States…some estimate that nearly $400 billion is illegally wagered on sports each year.”

Silver continues, “Times have changed since PAPSA was enacted. Gambling has increasingly become a popular and accepted form of entertainment in the United States.”

I agree wholeheartedly.

The time is now to legalize sports betting. And the same arguments can be used to legalize online gambling. With proper regulation and consumer protections, Americans can be free to spend their entertainment dollars as they choose.

In August 2015 the Third Circuit Court of Appeals in Philadelphia denied New Jersey’s bid to legalize sports betting saying it violated the PASPA, which came as no surprise. What did surprise me however was New Jersey’s tenacity.

On February 17 New Jersey appealed the decision of the three-judge panel and argued its case to the full court. They face formidable foes—the professional sports leagues—but I think we will see sports betting legalized throughout the country.

I never thought I’d live to see the day.

Robert Turner is a legendary poker player and casino/billiard marketing expert. Robert is most well-known for creating the game of Omaha poker and introducing it to Nevada in 1982 and to California in 1986. He created Legends of Poker for the Bicycle Casino in 1995. He also helped create Live at the Bike, the first live gaming site broadcast on the Internet in 2002.

He has spent over 30 years in casino marketing and player development. He has served as an executive host at the Bicycle Casino and MGM. He is currently working as a casino consultant.

Robert can be reached at robertturnerpoker@gmail.com for consulting, marketing and coaching. Find Robert on Facebook at http://www.facebook.com/thechipburner and on Twitter @thechipburner. Subscribe to Robert’s blog “Beyond the Numbers” to receive notifications of new posts by email.

Before the Poker Boom: Poker in the 90s

Trump

In the 80s poker had become primarily a west coast phenomenon, but thanks to poker pioneers like Steve Wynn, Jack Binion, Lyle Berman, George Hardie and even Donald Trump, poker would expand across the United States in the 90s.

I became casino marketing director of the Bicycle Casino in 1991. Knowing I was from Alabama, the Bicycle Casino’s founder George Hardie sent me to Tunica, Mississippi, to scout the area for a large poker casino he had planned to develop there.

As I looked out at the cotton fields and the raging Mississippi river, I remember looking forward to running a poker room in the south; it would be going back home for me. I had hosted many games in that area for years and finally would have a chance to offer the players a legal and safe environment to play where they would not have to worry about law enforcement or hijackers.

Hardie had options on land around Robinson and the Tunica area, which would later be sold to Lyle Berman. Berman is one of the best Omaha players in the world. He would visit the Bicycle Casino to play in the Diamond Jim Brady tournaments and became good friends with Hardie. Hardie had an ambition to build the largest poker room in the world in Mississippi and purchased a piece of property called Buck Lake around Tunica.

Hardie had lobbied to have the nearest casino to Memphis, Tennessee. He would later sell that property to Berman, who built the Grand Casino in Tunica in 1996, which helped establish poker in Mississippi. Jack Binion also purchased land to build the Horseshoe casino, which opened the previous year. Poker had finally arrived in the south.

Ken Lambert Jr., Regional Director of Operations for the Heartland Poker Tour, recalls opening day of Jack Binion’s Horseshoe Casino in Tunica where he was director of poker operations, “We finally opened in February of 1995 to long lines of excited players. The lines extended hundreds of feet. It was a cold day, but to warm as many of the guests as he could, Jack emptied out his gift shop and began handing out any type of cold apparel that was on hand.”

Lambert continues, “I had 10 poker tables opened and ready to go as players rushed to the room to be the first to play a hand in Tunica at Jack Binion’s Horseshoe. Not long after opening, the poker room expanded to 12 tables and the rest was history. We had the biggest players in the world come play. The new dealers were dealing games they had only heard about, $4,000/$8,000 limit Hold’em and the Pot-Limit Omaha had a $75,000 max bet.”

When poker exploded in the 1980s and 1990s, I felt like Forrest Gump. I was lucky enough to see landmark events in poker history firsthand and even established a record myself. I became the first player to have four consecutive cashes in the WSOP Main Event in 1991, 1992, 1993 and 1994. My highest finish was 6th in 1994. Ronnie Bardah set a new record in 2014 with five consecutive cashes in the Main Event.

On the east coast, poker was also having its own boom. In Nolan Dalla’s article “The Early Years of the Atlantic City Poker Scene,” Dalla says, “The epicenter of the East Coast poker universe instantly became the Trump Taj Mahal, which opened the sparkling 50-table room in the Summer of 1993.”

Poker Hall of Famer Jack McClelland was hired by Donald Trump in 1996 as poker tournament director to establish a major poker tournament on the east coast. Trump created the United States Poker Championship tournament, which was a prestigious stop on the professional poker circuit for years and was televised on ESPN. McClelland says Trump was a no-nonsense, get-it-done right kind of guy. He really enjoyed working for him.

I remember going to the opening of most of these new poker rooms. Poker now had a showcase across the United States. This developed thousands of new poker players. Poker had arrived as a must-have amenity in casinos to reach out to a new demographic of gamblers.

The 90s was a great decade for me personally as I found success both in casino boardrooms and on the felt. In part 2, I will discuss the poker boom in Las Vegas. Steve Wynn, with the help of Bobby Baldwin as his president, opened Bellagio, which would be a game changer in the history of poker.

Robert Turner is a legendary poker player and billiards/casino marketing expert. Robert is most well-known for introducing the game of Omaha poker to Nevada in 1982 and to California in 1986. He created the Legends of Poker for the Bicycle Casino in 1995. He also helped create Live at the Bike, the first live gaming site broadcast on the Internet in 2002.

Robert has over 30 years’ experience in casino marketing and player development. He can be reached at robertturnerpoker@gmail.com for consulting, marketing and coaching. Follow Robert on Twitter @thechipburner.