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.

Advertisements

Honor and Integrity in Poker and Gambling

Bicycle Casino

The poker world has been rocked in recent years by various scandals from the Absolute Poker super user and the collapse of Full Tilt Poker to the recent Borgata counterfeit chips scandal. This got me to thinking about honor and integrity in gambling and reminded me of the words a bookie in Alabama told me over 35 years ago.

Eddie was the life of our home poker games for years. Every Tuesday he would come by our game and settle up with the poker players, and then he would throw a little money away in the game. He was not really trying to win; he just liked to gamble.

This week was different. He owed around $25,000 and called to say he would need a week to settle up. This sent shockwaves through our small poker world. How could this happen?

When he stopped by the next week, I called him into a room and said, “Eddie, what happened? You have always been so honorable.” He said, “The truth is I didn’t pay attention to my business. I always wrote the parlays and teasers and put them in a cigar box and looked at them on Monday mornings because they were usually losing propositions. This time they all won, and it was for over $1 million. I got broke. I’m now poor Ed. Robert, you can only be honorable as long as you can be honorable.”

The mistake Eddie made took away his honor, but he had confronted the issue head on; he didn’t try to hide from it. The following story told to me by legendary Las Vegas bookmaker Jimmy Vaccaro, now running the South Point’s Race and Sports Marketing division, demonstrates the opposite.

Jimmy was talking to a bookmaker friend of his that was having a bad season. He said, “Jimmy, it has all come down to an airplane game.” Jimmy asked him what an airplane game was, and he replied, “I’m going to the airport to watch the game. If my players lose the game, I’m back in action and have a bankroll. If my players win, then I’m catching a plane to who knows where.”

Poker in California was in a similar predicament at one time. For over 50 years, California had become the training ground for the best cheats in the world because everybody handled the deck in pass-the-deal games. This created games that were plagued by everything from petty cheating to full-blown organized theft.

However, when hold’em was legalized in California, it changed everything. George Hardie and Mike Caro were at the forefront of this change. As Caro says, “I realized that the old days of pass-the-deal and five-card draw would vanish.” He explains that this change would “lead to a complete rethinking of the California poker product with professional dealers and much safer and ethical games.”

After George Hardie cleaned up the games, I remember a couple of cheaters came down from Northern California and cheated the high-limit games at the Bicycle Casino with marked cards which they had managed to get a floor person to put in. This resulted in thousands of dollars being lost at the big game. Hardie instructed his management team to give the players their money back, which was over a hundred thousand dollars.

Hardie could do this because he had the money, and it protected the integrity of the game and the business he founded. He let people know he would do whatever it took to restore the honor of the game.

I faced similar challenges as the General Manager of the Horseshoe Casino in Gardena, California, as we transitioned from the old pass-the-deal days to center dealers. Changing the way people perceived the card room was my biggest task.

Today the new frontier is online gaming, and it is experiencing some of these same growing pains. Caro, along with his colleague Bill Handy, continues to advance ethical poker by working on a new system called COPS to detect online cheating. This shows how things change and still stay the same.

This takes me back to the words Eddie said at the beginning of the article. You can be honorable only as long as you can be honorable. And in the case of Borgata, regulation can only go so far; you can only regulate what you can regulate.

If someone is determined to cheat, he will find a way. We, as players, always need to be vigilant to protect each other and the game we love. That is the only honorable thing to do.

Robert Turner is a legendary poker player and 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 Live at the Bike, the first live gaming site broadcast on the Internet in 2002, and he also created Legends of Poker for the Bicycle Casino and the National Championship of Poker for Hollywood Park Casino both in 1995.

In the year 2000, he created World Team Poker, the first professional league for poker. He has spent over 30 years in casino marketing and player development and has served as an executive host at the Bicycle Casino and MGM. He is currently working with his new companies Crown Digital Games developing mobile apps and Vision Poker, a poker marketing and managing group.

Find Robert on Facebook at https://www.facebook.com/thechipburner and on Twitter @thechipburner.
Robert Turner can also be reached at robertturnerpoker@gmail.com for consulting, marketing and teaching.