Gaming companies blazing the trail for online poker are starting to generate revenue from their Internet investments.
It’s still too early to determine exactly how much they have made and how sustained the results will be, but frontrunners Caesars Entertainment and Station Casinos both have realized proceeds from online gaming.
Caesars began generating online poker revenue during the third quarter of the year in Nevada and the fourth quarter in New Jersey. The company’s third-quarter earnings included only 11 days of online poker revenue. Caesars unveiled its World Series of Poker site Sept. 19. The company didn’t specify online poker revenue in its earnings report.
Station got an even earlier start, having already managed more than 1 million hands here, and is ready to roll out its product in New Jersey. Both companies take a percentage of gamblers’ money for every hand played.
Overall, Caesars reported revenue of $2 billion, down 0.7 percent from the third quarter last year. The company reported $112 million in casino revenue, a 7 percent decline offset by lower promotional expenses and increases in nongaming revenue.
Will the company’s tide turn with four online gaming outlets debuting in New Jersey? Caesars is teaming with 888 Holdings and Amaya Gaming Group for online poker offerings on the East Coast. But the company also is reeling from losses it assumed when it withdrew its bid to build one of Massachusetts’ first casinos.
Online poker also could be profitable for the Boyd Gaming Corp. and MGM Resorts International, co-owners of Atlantic City’s Borgata, who are teaming up with Internet gaming provider bwin.party.
During the third quarter, Boyd saw its losses widen to $37 million despite a 20 percent increase in revenue. Executives were happy with the results at Borgata but disappointed in spending by customers at Southern and Midwestern riverboat and racino properties.
MGM, meanwhile, is aggressively gearing up for online play in New Jersey. MGM’s losses narrowed in the third quarter due to a 9 percent increase in revenue.
MGM has the comfort of having a cash cow Macau property in its back pocket while waiting for New Jersey online revenue to roll in.
Two more companies have a similar luxury.
Wynn Resorts saw its earnings climb 63 percent to $182 million, up 7 percent from a year ago, due to revenue generated in Macau.
Las Vegas Sands also had a record quarter, with revenue up 32 percent to $3.6 billion and earnings up 82 percent to $809 million, thanks to earnings in Macau.
But neither Sheldon Adelson nor Steve Wynn has any interest in pursuing online gaming.
Wynn says he’s satisfied sitting on the sidelines as others pursue cyber opportunities. He is focused on a casino bid in Massachusetts after backing out of plans to build in Pennsylvania.
Adelson, on the other hand, has actively battled for a nationwide Internet poker ban, to the chagrin of most of his colleagues.
Another bellwether of the success of Internet poker will be Station Casinos. Station was the first company to offer online poker in Nevada, and its Ultimate Gaming is teaming with Trump Taj Mahal for Internet gambling in New Jersey.
Station posted a loss of $4.7 million during the third quarter, although revenue was up 3 percent to $305 million. The company focused much of its attention recently on opening a tribal casino it is managing near San Francisco.
American Casino & Entertainment Properties, operators of the Stratosphere and two Arizona Charlie’s properties in Las Vegas, hasn’t launched a real-money online poker play but is marketing a free product in advance of a pay site.
ACEP had a rocky third quarter due to increasing losses, a bid to refinance, reduced player volume and lower casino hold percentages. Revenue was down 1.6 percent to $84 million and losses soared 185 percent to more than $9 million.
Online poker starting to pad companies' bottom line - VEGAS INC
European gaming group, Unibet, announced that it would be leaving the Microgaming Poker Network (MPN) in order to become a standalone poker product. Unibet commissioned the Estonian based solutions supplier, Relax Gaming to develop exclusive poker software for its brands so that it could go solo and quit the MPN.
Daniel Eskola, the head of gaming at Unibet, explained the motives behind this dramatic move.
“The environment in the online poker industry has changed over the years and we have come to the insight that being part of a poker network is not sustainable for Unibet in the long term,” he explained. “This project has given us the possibility to start from a blank piece of paper and define everything we believe is important for a fun poker experience. In a way, our goal is to bring the fun back to poker by creating software with a clear focus on the casual player.”
As part of the deal, Unibet invested EUR 1.2 million in Relax Gaming in return for stake in the business. It was not disclosed how much of Relax Gaming Unibet now owns.
The two groups, Relax Gaming and Unibet, collaborated in order to come up with a functioning and attractive poker product that will offer players what they are looking for in a platform, including three dimensional backgrounds, user friendly table selection and more. The new platform will also be available across all channels, to allow play on desktops and mobile alike, with the software compatible for PC download, Mac versions, IOS tablet and Android platforms.
Unibet has stressed that it still continues to have a very strong relationship with the Isle of Man online gaming software provider, Microgaming, whose Quickfire games are still available at Unibet Casino.
Online poker bills previously introduced at the federal level by the likes of Sen. Harry Reid and Rep. Joe Barton have failed to gather enough support, leaving poker players in the U.S. resigned to a slow-moving state-by-state scheme that may force a majority of the country to watch online poker from the rail for years to come.
But new hope has emerged in the form of a U.S. subcommittee hearing slated for Tuesday, December 10, 2013. “The State of Online Gaming” will be reviewed by the House Subcommittee on Commerce, Manufacturing, and Trade at the Rayburn House Office Building in Washington, D.C. at 5:45 p.m.
The hearing will focus on the "current regulatory landscape" that was influenced by the DoJ's clarification of the 1961 Wire Act issued two years ago. That DoJ reinterpretation of the statute permitted individual states to create their own Internet gambling schemes as long as sports betting was not among the offerings available via computer and mobile device wagering.
Also on the agenda at next Tuesday's hearing will be Barton's HR 2666, known as the Internet Poker and Freedom Act. That bill was introduced in July and identifies poker as a game of skill. Its aim is to regulate poker and permit each state to opt in or out. HR 2666 also strengthens the UIGEA with regard to online casino games.
An expert witness list of those invited to testify has not yet been made public. However, representatives from Nevada, New Jersey and Delaware may be asked to provide insight regarding the online poker and gambling regimes that each has already launched.
U.S. poker players are overwhelmingly frustrated at the lack of movement with regard to online poker regulation at the federal level. Each new hearing or federal bill introduced brings a spark of hope, but that possibility is seemingly quickly dashed by federal legislators without the foresight to see that Americans want to play online poker and that a tremendous amount of tax revenue would be generated as a result.
Whether next week's subcommittee hearing will be the catalyst for the eventual approval of a federal online poker bill is yet to be decided. But past history tells us that it will likely be a meeting a couple hours in length with no progress made beyond that point.
House Subcommittee Sets Online Gambling Hearing Date of Dec. 10, 2013 | PokerUpdate
American gambling has been going through a serious change of late with the introduction of regulated internet betting in Nevada Delaware and New Jersey. In Nevada only online poker has been sanctioned by the gambling authority but in Delaware and New Jersey there are online slots and other casino gaming opportunities being offered. New Jersey even plans to challenge the Federal laws regarding wagering on sporting events.
The federal laws need to be addressed as each new jurisdiction opens its doors to internet betting for real money. One U.S. congressman is calling for new federal legislation dealing with online betting.
U.S. Rep. Joe Barton, a Republican from Texas, introduced a bill back in July that proposes that the federal government establish a program for licensing online poker across the country. Next week the House Subcommittee on Commerce, Manufacturing and Trade will look at the bill during public hearings.
Barton points out the inequality in the current laws governing online gambling. Barton explained,"Each law is different, which creates uncertainty with a complex array of regulations that could leave players at risk," Barton continued to add, "Just like millions of other players, I enjoy the strategy and skill involved in poker. I continue to be supportive of the Americans who play online. They deserve to have a legal, on-shore system that makes sure everyone is playing in an honest, fair structure."
Back in 2011, the U.S. Department of Justice issued a statement which clarified the federal Wire Act of 1961, pointing out that the act only applied to sports betting opening the door for US jurisdictions to offer legal online gambling. Barton said, "I will continue to push for ... the Internet Poker Freedom Act because I believe the federal standards it creates protect the integrity of the game and the rights of those who play it,"
America has been struggling with the concept of internet poker for some time and after the Department of Justice issued the clarification statement regarding online gambling regulations and how only betting on sports was illegal things changed dramatically. The big crack down on the big online poker web domains created even more confusion and distrust. A recent survey conducted by Online Poker Report which is an independent online poker news site focusing on legal and regulatory developments in the United States gave the industry a point of view as seen by the average citizen in the States.
After surveying 1500 people, a relatively small sample of Americans, the report revealed that the majority of the people asked were either neutral or positive about regulated online poker. With a 1 to 5 grading the survey asked of their opinion on the subject with one representing strong opposition and five meant strong support. The results indicated 60% of respondents graded their opinion as three or better, indicating that over half of Americans are in favour of regulated and licensing of internet poker. Additionally, less than 30% of those who responded are strongly opposed to the subject of regulated online poker, indicating that the issue of regulation is not as important as the industry thought before, surprising some analysts. Those who indicated strong resistance to regulated online poker are according to the survey in the minority.
One firm, Jackpot 247 that has reviewed the results stated, “We have seen lots of statistics and research findings indicating that the regulation of internet gambling and online poker is strongly opposed by the American general public, but these statistics actively contradict some of those assumptions. The study is a good look at the other side of the argument, and proves that the majority of people in the USA are actually neutral or in favour of online poker regulation.” The results of the survey depends a great deal on the states in which it was conducted so it should be viewed accordingly and in perspective.
Survey Says Regulated Online Poker in America Acceptable
The subject of online gaming and poker will be considered in a committee meeting in the United States Congress next week.
The House Subcommittee for Commerce, Manufacturing, and Trade will hold a meeting entitled “The State of Online Gaming.” It will take place on Tuesday, Dec. 10, at 12:30 p.m. Eastern time in 2123 Rayburn
House Office Building. According to information from a Congressional website, “The Subcommittee will examine the current regulatory landscape for online gaming after the Department of Justice’s reinterpretation of the Wire Act. The Subcommittee will review H.R. 2666, the “Internet Poker Freedom Act.”
Among the witnesses will be John Pappas, Executive Director of the Poker Players Alliance and Geoff Freeman, President and Chief Executive Officer of the American Gaming Association.
Among the questions that are being raised by the subcommittee for consideration at the meeting, according to a background memo:
– Is Federal legislation necessary to address the developing patchwork of State regulations?
– How effective is enforcement of remote gaming in jurisdictions that have legalized it?
How are States preparing to deal with the issue?
– What consumer protections exist for online gaming?
– How should the differences between various forms of online gaming – e.g., poker vs.
table games – affect how they are regulated?
The final question is one that online poker players in particular would like to see in the public spotlight. Poker interests have long insisted that poker is a game of skill and should not be lumped together with games of chance.
This will not be the first time for a Congressional subcommittee to consider online gaming regulation, as past bills on the subject have also been scrutinized by lawmakers.
Online Gaming, Poker To Be Considered in U.S. Congress
"New Jersey (has) joined Delaware and Nevada in offering legalized Internet gambling. ... While it's dressed up as fun and easy ... Internet gambling ends up destroying lives, and our most vulnerable citizens become ensnared. It presents a nightmare scenario for parents already fending off graphic materials, predators roaming the Internet and other illegal or inappropriate content. Now, they have to worry about their kids gambling away tuition money or running up credit card debt playing online poker, too.
James Taylor, The Federalist: "In a free society, government should be very careful about taking away people's freedoms. While some justifications and necessities will exist, it is hard to make a compelling, internally consistent case for the Land of the Free taking away the right of consenting adults to play online poker. With its de facto ban on online poker, America is an outlier among the world's democratic nations that largely respect and protect such a right. Congress can and should affirm that online poker remains legal."
Jonathan S. Tobin, Commentary: "Wherever legal gambling flourishes, it generates a lot of work for bankruptcy lawyers and sets off waves of crime as debt-ridden gamblers resort to thievery and embezzlement. Every conceivable social pathology comes in its wake, and though governments profit at one end with their large take of the cut, they pay for it in many other ways that have to do with the damage done to those destroyed by gambling. ... However great the toll of suffering due to legal casinos may be, its impact is limited by the fact that going to such a place is not an impulse decision but rather a planned excursion. But once high-stakes gambling becomes something you can play on your phone, the stakes for society will increase exponentially."
Bloomberg, editorial: "Problem gambling and other harmful side effects will probably be easier to prevent online. If would-be punters are required to open an account and have their identities verified, imposing loss limits should be fairly easy from a technical perspective. Compulsive gamblers might still get around such safeguards, but doing so would certainly be harder than at a casino, where you can plow through chips as long as you like. Online operators could also more easily comply with anti-money laundering laws and prohibitions against underage gambling. ... People clearly like gambling. ... Regulating it properly would keep them safe. And taxing it all will make lawmakers smile. A decent trifecta, you might say."
Christian Science Monitor, editorial: "The potential tax revenues, ... are not worth the social costs, especially to some 9 million habitual gamblers. ... The empty dream of gambling already results in Americans losing nearly $130 billion each year in casinos or to state lotteries. Why add to those losses — and perpetuate the notion that chance determines one's future — by permitting gambling on the Internet?"
Nick Jones, Poker Fuse: "Internet gambling exists throughout the United States today. A U.S. citizen can play at an online casino, place a bet at an online sportsbook, and play a hand of real-money online poker. It's easy to deposit and gamble in minutes. These sites, based in offshore jurisdictions, rarely afford the player any protections. Online gambling is here, and it's going nowhere."
Is online gambling a loss for America? Opinionline
It may very well be the season for ghosts of present and future, but we’ll set those guys aside to focus on the ghosts of online poker past.
Read on for details about the day that PokerStars was born, and RGP’s breakdown of the poker book market circa 2002.
We will also discuss Guy Laliberté’s rumored losses on Full Tilt Poker and Bill Rini’s systematic dismantling of the recreational player model.
Looking back at This Week in Online Poker History, we revisit these stories and more.
December 15, 2001: PokerStars launches for real-money play
December 15, 2001 will go down as one of the most important days in poker history, as it was the day that PokerStars dealt its first hand of real-money online poker, although at the time it was likely seen as just another day in an up and coming industry.
PokerStars originally launched their software on September 11, 2001, a day that is famous for an entirely different and utterly tragic reason, but the September 11 launch of PokerStars was strictly for play-money, it wasn’t until December 15 that the site started offering real-money games to the masses.
When they first entered the market they were one amongst many online poker rooms fighting for a piece of the freshly baked pie.
But with some superior marketing ideas *cough WSOP satellites cough* not to mention a pretty good product, PokerStars quickly rose to the top of pack, and just after UIGEA was passed in 2006 the site claimed the number one spot in online poker, a spot it’s held ever since.
December 15, 2002: RGP creates the “Good Poker Books” FAQ page
The old rec.gambling.poker forums were the go-to place for poker information before being usurped by the moderated 2+2 forums in the early days of the online poker boom, and one resource page in the archives of RGP I stumbled upon recently was this FAQ page on good poker books from December of 2002.
I posted it here because I’m sure you’re as interested as I am to see what players were reading back in 2002?
Ok, probably not, but it is interesting to see how virtually every single one of these books has become obsolete in just 10 years.
Honestly, I couldn’t imagine recommending any of these books to a player who wasn’t an absolute novice, and even then I’d tell them to not even bother with most of the list.
For me, the only somewhat relevant books on the old RGP list are:
The Theory of Poker (still a good introductory book)
Super System (some parts)
Winning Low Limit Holdem (a good introductory book to Limit Holdem)
Holdem Poker for Advanced Players (another ok introductory book for Limit Holdem)
December 15, 2008: Guy Laliberté’s FTP losses
By December of 2008, the poker forums were openly discussing Guy Laliberté’s alleged losses at the nosebleed tables on Full Tilt Poker. This was a period of time that may have forever altered online poker, as the multi-millions pumped into the poker economy made some people very rich, and made the usual stakes played jump up quite a bit.
Nobody knows for certain how many screen-names Laliberté used, or just how much he lost, but the usual estimates put the figure somewhere in the $12-$15 million range.
December 16, 2009: Ban online poker’s big winners
Judging from this article, one of my favorite poker writers, Bill Rini, is not a fan of the recreational model being implemented by some online poker sites. Well, he’s not a fan of networks penalizing sites with winning players.
I definitely see Bill’s perspective on this, but I actually completely disagree with him, and feel most recreational models don’t go far enough. But since this isn’t an op-ed I’ll save that argument for another day; for today just read and enjoy Bill’s thoughts on the matter.
A Look at Online Poker History December 9th - 15th
The heads-up battle between poker pro Ola “Odd Oddsen” Amundsgaard and Norwegian politician Erlend Wiborg started and ended on Saturday.
Originally scheduled to play out over the next several months, Wiborg threw in the towel after losing around 26 buy-ins in a little more than 1,000 hands. The two were playing stakes of $0.50-$1 pot-limit Omaha. Amundsgaard would have paid $170,000 of his own money to Wiborg if he was the winner after 10,000 hands of action. It was a huge freeroll.
The match took place because Amundsgaard wanted to show that poker is a game of skill. He publicly issued a challenge to any Norwegian lawmaker, and Wiborg was the one who accepted. He agrees with Amundsgaard that poker is a skill game and should be regulated.
Wiborg apparently had some poker experience prior to the match, but any knowledge he had about the game was not visible during the contest. He got crushed.
“I hope at least it will lead to a discussion, and put poker on the agenda,” Amundsgaard told Card Player a couple of weeks before the match. Online poker is basically illegal in Norway.
There have been reports that the issue will be discussed there in the near future.
Amundsgaard is one of this year’s largest winners on the web. He is up around $3 million.
Norwegian Politician Throws In Towel In Poker Battle
A House Energy and Commerce Committee panel on Tuesday held a showdown over a legislative effort to license and regulate online poker. States have tended to take the lead on regulation of online gambling in recent years, but many lawmakers say that federal action is necessary to prevent money laundering and consumer abuse.
“While unfettered online gaming here in the U.S. is surely not the ideal, absent a clear mandate from Congress, we risk exposing our constituents to an environment of a ‘race to the bottom’ which could present itself,” Rep. Lee Terry (R-Neb.) said.
Rep. Joe Barton (R-Texas), who has introduced the Internet Poker Freedom Act, said that times have evolved to require the new regulations.
“Now we have the Internet and iPhones and iPads and apps and all these things,” he said. “Just about the only thing you can’t do [online] anymore is play poker. And that is changing.”
“I think the time has come to recognize that, in the Internet age, we need to regulate and set a level playing field for those of us who would like to play poker online.”
Legislative efforts to legalize and regulate online gambling have been heavily contested by some in the casino industry, including magnate Sheldon Adelson. The billionaire and GOP donor has led one of the most prominent campaigns against online gambling and plans to launch a major advocacy coalition to stop online gambling in January.
Andrew Abboud, vice president of government relations and community development at the Las Vegas Sands Corporation, which Adelson runs, told lawmakers on Tuesday that the Internet is “more dangerous than ever.”
“Internet gambling takes gambling too far,” he told the House panel. Abboud equated online gambling to unregulated online pharmacies, which federal officials have attempted to shut down.
He wants Congress to reinstate a ban on online gambling that existed before a 2011 Justice Department decision opened the doors to legal gaming. Draft legislation to ban online gambling and require the FBI to study its dangers, which has been obtained by The Hill, has been circulating among lobbyists in recent weeks.
Consumer advocates have also worried that allowing online gambling could make it easier for companies to target children and people with gambling addictions or leave Americans’ private data exposed to identity theft.
“The government should not be in the business of increasing the number of people struggling with gambling addiction,” said Rep. Jan Schakowsky (D-Ill.).
Any bill that would have to win her support, she added, would need to have “consumer protections as a top priority.”
Other lawmakers contended that the federal government might not be in the best position to secure the safety on online gambling sites.
“We’ve got a prime example with HealthCare.gov,” Rep. Bill Johnson (R-Ohio) said. “Regulated does not necessarily equal secure.”
There have been a handful of bills in the House and Senate to legalize and regulate online gambling in various forms in recent years, though none have been able to attract substantial support.
Barton’s bill would establish a system to license and regulate online poker. States would be able to opt out of the system. A similar effort last year died in committee.
Unlike other measures, such as a recent bill from Reps. Pete King (R-N.Y.) and Michael Capuano (D-Mass.), the bill would only tackle online poker games, not other contests.
“Poker is a game of skill, and all my bill does is allow free will at the state level, if a governor allows it, for people who want to play poker online,” Barton said.
Federal oversight of online gambling is currently “murky at best,” according to Terry.
In 2011, the Justice Department issued an interpretation ruling that existing federal laws against interstate telecommunications betting only applied to sports bets, not games like poker and lotteries.
New Jersey, Delaware and Nevada have since decided to legalize online gambling within their borders, and a handful of other states are considering legislation to follow suit. State officials say that legal Internet gambling can bring in a wealth of new revenue to cushion state budgets. Dozens of foreign countries allow online gambling, however, and Americans have spent billions at foreign websites with varying levels of oversight.
That’s led to concerns that children could easily access the sites, or that disreputable organizations are using online gambling to swindle consumer or launder money.
“While I understand and agree that Congress should not trample on the rights of the states, I believe it is critical that we gain an understanding of the integrity of the different state standards; how this affects the citizens of other states; and what the role of the federal government should be in the future of domestic online gaming,” Terry said.
During a Congressional hearing earlier this week concerning the new Internet Poker Freedom Act, Texas Rep. Joe Barton, a staunch supporter of online poker, argued that God enabled him to travel to the congressional hearing in Washington D.C., and therefore the Almighty must be in support of online poker and the passing of the online gaming bill.
Barton, speaking during the House Energy and Commerce subcommittee hearing Tuesday in D.C., said that "God must be for this bill because I got up this morning at four o'clock in Texas, outside Dallas, and braved icy roads and 20 degree temperatures to get to DFW airport where my good friends at American Airlines left exactly on time. God put a 200 mile tail wind behind our plane, and I got here an hour early. So that tells me that God is for this bill," Barton, a Republican, said jokingly, garnering laughter from those attending the subcommittee hearing.
The Internet Poker Freedom Act, also known as House Bill 2666, would allow more people to play internet poker by setting certain regulations to the online game, including establishing a program for states and federally recognized Indian tribes to license the game. The legality of online poker in the U.S. folded in 2011 after the Department of Justice ended many online gaming operations, and earlier in 2006 Congress passed a law banning the use of credit cards for illegal internet gaming.
Barton, who is backing the Internet Poker Freedom Act , went on to argue at Tuesday's congressional hearing that he believes fans of poker should be able to play online, saying the game is superior to other games such as slots or roulette, because it requires skill and not just luck. "Now we have the Internet and iPhones and iPads and apps and all these things," he said. "Just about the only thing you can't do [online] anymore is play poker. And that is changing."
"I think the time has come to recognize that, in the Internet age, we need to regulate and set a level playing field for those of us who would like to play poker online."
Later in the Congressional hearing, Rep. Marsha Blackburn (R-Tenn.) poked fun at Barton's previous comments regarding God's interest in online poker, jokingly saying: "Mr. Barton, who we all dearly love, got off on a little bit of a tangent during his opening statement this morning when he said he thinks God is in favor of his online poker bill because his flight got in early […] but he only need to look at the number of his bill, 2666, to remember that the devil is in the details."
Barton later clarified that he does not actually believe God has any interest in his online poker bill, but he does know that God believes in free will, which in reality is what the Internet Poker Freedom Act is all about. "I was being somewhat flippant when I talked about God being for this bill. Obviously God doesn't care a fig one way or the other about our bill, but I will say, as a practicing Christian, God does give men and women free will, and I think we ought to have a law that reflects free will on this issue."
Barton introduced the bill to Congress shortly after New Jersey, Delaware, and Nevada passed individual laws to legalize online gaming in their states. The bill was also introduced around the same time one company, Ultimate Gaming, offered the first legal and secure online poker opportunity with its UltimatePoker product after it was approved by the Nevada Gaming Control Board.
Does God Love Online Poker? Texas Congressman Has Shocking Answer
Tony G has launched an online poker room dedicated to Open Face Chinese Poker (OFCP). The poker room is available on his gambling site TonyBet.
Prior to the launch, he had been titillating his followers with veiled hints of exciting new developments: “I have the biggest thing since the invention of online poker in my hands and I want to share it with all of you!”
Four varieties of the game are presented; Classic, Pineapple, 13-Card and Turbo. An explanation of each game and its rules has been published in the poker room website. Tony states that the site will only offer OFCP.
The announcement was publicized on PokerNews, the affiliate site founded by the Lithuanian/Australian poker pro. with a quote from the man himself:
When all my poker mates became crazy about OFCP I couldn’t just sit there and watch them play each other all day long until they were at each other’s throats. I had to find more opponents for them. That’s when I decided to bring the game out to the masses and give poker pros some fresh meat.
PokerStars recently said that it would not be offering the game, giving as its reason that OFCP raised serious “solvability” issues. PokerStars.tv carries several videos about the game including a discussion of strategy between Barry Greenstein and Shaun Deeb.
Poker players are protesting ewallet Paypal over reported connections with Iovation, an online fraud detection service that has ties to UltimateBet.
The relationship was first publicized by poker journalist John Mehaffey, who discovered that Iovation was on a PayPal list of “non-exclusive examples of the actual third parties to whom we currently disclose your account information.”
The article has spawned a thread on 2+2, where angered players are encouraging others to complain to Paypal.
The suggested text of one prewritten email states Iovation “was established by the former operators of online poker sites Absolute Poker and Ultimate Bet. These sites were knowingly operated to commit theft of tens of millions of dollars from their customers.”
Previous player anger led to Nevada online poker entrant Ultimate Poker severing its relationship with the verification company in May this year.
Michael Josem, one of the two players who carried out a forensic investigation that exposed the cheating scandal posted: “People who steal money should be in prison, and leading financial organisations like Paypal should not be trusting them with our personally identifiable information.” He tweeted: Josem was subsequently recruited to a security job at PokerStars. His comments are made in his personal capacity only.
The protests in May led to Iovation being investigated by the Nevada Gaming Control Board. Iovation CEO and founder, Greg Pierson, was directly implicated in the UltimateBet cheating scandal and subsequent coverup by taped recordings of conversations made by cheater Russ Hamilton.
Poker Players Protest PayPal Information Share with Iovation | Pokerfuse Online Poker News
As Marco Valerio noted, it’s important to read the full statement from the New Jersey Department of Gaming Enforcement before jumping to any conclusions.
That statement, in its entirety:
The Division of Gaming Enforcement has determined that the application of Rational Services Limited (PokerStars) casino service industry licensure (CSIE) will be held in a suspended status for a period of two years.
The Division, within that period, may consider a request for relief to reactivate the application if significantly changed circumstances are demonstrated at which time the Division’s investigation of Pokerstars and its affiliated entities and associated individuals will be resumed to assess suitability.
The Division’s determination is based primarily on the unresolved federal indictment against Isai Scheinberg for the alleged violation of federal gambling statutes, namely, the Illegal Gambling Business Act and the Unlawful Internet Gambling Enforcement Act (UIGEA), and the involvement of certain PokerStars executives with Internet gaming operations in the United State following the enactment of UIGEA.
So what the DGE has actually done is hit the pause button on the licensing process for PokerStars.
That’s a far cry from barring, banning or otherwise restricting PokerStars from taking part in New Jersey’s iGaming industry.
And make no mistake, the DGE certainly has the tools to enact such a ban should they see fit. But that’s not what they did here. And that distinction is an important one as it relates to PokerStars’ chances in New Jersey.
How PokerStars could win approval from NJ regulators
What would it take for New Jersey regulators to resume their vetting of PokerStars? The DGE actually laid out the conditions very clearly in their statement:
Isai Scheinberg needs to resolve his indictment with the DoJ.
PokerStars needs to sever their relationship with “certain PokerStars executives.”
It’s my sense that these are the only outstanding issues prohibiting approval of PokerStars in New Jersey. The DGE has been vetting the company for close to a year at this point, so they’ve had plenty of time to uncover anything else objectionable.
It also seems unlikely the DGE would demand such extreme concessions from PokerStars only to then deny the company a license based on some other shortcoming.
And as for the “certain PokerStars executives,” I can’t say for certain who the DGE is referring to or why the DGE wasn’t willing to name names.
The only other PokerStars executive named by the DoJ in connection to Black Friday – that I’m aware of – was Paul Tate. But the statement does employ the plural – executives - not the singular.
I feel confident that the issue of “certain PokerStars executives” is effectively peripheral. I can’t image Isai Scheinberg settling with the DoJ before first ensuring that this issue was resolvable, and I have no doubt that Scheinberg has the means to ensure that resolution.
Is Isai Scheinberg willing to play ball?
Only Isai Scheinberg knows for sure. And, when asked, PokerStars declined to offer any additional comment beyond their official statement.
But I think there’s a reasonable chance Isai Scheinberg will strike a deal with the DoJ.
I base that assessment on a few factors:
If rumors are to believed, Isai Scheinberg has been negotiating a settlement with the DoJ for several months.
Isai Scheinberg has reportedly retained former Attorney General Michael Mukasey - of high-powered firm Debevoise & Plimpton - to represent him.
For all intents and purposes, New Jersey is the United States market. If PokerStars can’t get the green light in NJ, it’s tough to see them getting approval anywhere else in America. And the American market simply doesn’t seem like something PokerStars is willing to surrender.
On the DoJ’s side, Scheinberg and Tate are two of only three remaining loose ends to the Black Friday indictments. The resolution of that case, especially a resolution with a hefty fine attached, is undoubtedly attractive to the DoJ.
Put it all together and it seems certainly plausible – and arguably likely – that Isai Scheinberg and the DoJ are moving in the direction of a deal.
Why did the DGE take this step?
That’s an interesting question. I asked a representative of the DGE if there was any recent precedent for a suspended application. She said that to the best of her knowledge, there wasn’t one.
In short, this isn’t a move the DGE makes on a regular basis. So why did they take this route with PokerStars?
Logically, the DGE only makes this move if they don’t want to reject PokerStars, but can’t reasonably approve them. So my guess is that negotiations between PokerStars and the DGE had basically hit a standstill, with the DGE holding firm on their requirements regarding Isai Scheinberg and “certain PokerStars executives.”
At that point, the DGE likely felt compelled to publicly address the issue for the sake of resolving ambiguity, both for PokerStars’ proposed partner Resorts and for the market as a whole.
What happens after two years?
The application is held in a suspended state for up to two years. So what happens after that, assuming PokerStars doesn’t resolve the open issues to the satisfaction of the DGE?
Apparently, no one knows. There’s no obvious precedent in past DGE decisions to draw upon. And when I asked a DGE representative what happened after the two year clock ticked away, I was told that they had “no additional information.”
So Here's What Actually Happened With PokerStars and New Jersey
A poker war is about to break out on the Internet, and the Bay Area is ground zero for the fray.
A local mathematician and software designer plans to open an Internet-based poker room that will legally allow Americans to play online poker for real money.
Arthur M. Pfeiffer, owner and founder of Palo Alto software company Thwart Poker Inc., told The San Francisco Examiner that his venture will be a website called Texas Block ’Em that is expected to debut some time next year.
“I have invented a new form of poker called Texas Block ’Em that removes the element of luck from the game,” Pfeiffer claims. “Since my version of poker is 100 percent skill and involves no luck, it’s not gambling and therefore is legal.”
IS A SPADE REALLY A SPADE?
Texas Block ’Em removes the element of luck by eliminating the randomness that comes from dealing players their cards, Pfeiffer said. Instead of randomly being dealt cards to play, players are allowed to choose the cards they want to play, making Texas Block ’Em, according to Pfeiffer, a game of skill and not luck or chance because every player has the same opportunity to play the same cards.
Texas Block ’Em plans to challenge another local online poker room that also claims to be legal, San Francisco-based Pure Play, for a piece of the multimillion-dollar Internet poker market in the U.S., Pfeiffer said.
Pure Play, which has been in operation since 2005, is legal under U.S. law because it doesn’t charge an entry fee to play in its online tournaments, according to Pure Play owner and founder Jason B. Kellerman. Instead, players pay a monthly fee to join the site and then the tournaments, which award cash prizes, are free.
Pfeiffer noted that his site’s “game-play dynamics and player strategy are very different than that of Pure Play’s poker games. Their players passively observe what cards are randomly dealt and have no control over the process.”
“Our players actively participate in the process, as it is their card-selection decisions that determine what cards are dealt,” Pfeiffer said.
In the traditional poker game of Texas Hold ’Em, five face-up community cards are dealt randomly to each player, as are each player’s hole cards, which are dealt face-down. Pfeiffer said. In Texas Block ’Em, community cards are dealt randomly, but then players get to select any hole cards they want to play with those community cards. If two players pick the same hole card, both are blocked from getting it, which is the essence of Texas Block ’Em, he said.
“In regular poker, each player relies heavily on the fixed laws of mathematics to calculate the probability that the cards dealt will give him a winning hand,” Pfeiffer said. “In Texas Block ’Em, each player relies heavily on his sense of human psychology in reading opponents to determine the probability that he can pick the right cards for a winning hand.”
And unlike Pure Play, Texas Block ’Em plans to charge players a fee for every tournament they participate in, Pfeiffer said.
GOING TOE TO TOE
Pfeiffer won’t be going into the online poker business blindly. His lucrative one-man company, Thwart Poker, currently produces apps so people can play poker on their mobile devices, though without betting actual money. Two other poker variations he also invented and patented, called Hold ’Em Blitz and Hold ’Em Battle, are currently available on the iPhone, iPod Touch and soon the iPad, he said.
“It’s just a matter of moving poker from the cellphone to the Internet,” said Pfeiffer, who turns 80 in February, lives with his girlfriend in Palo Alto and stays sharp by playing the clarinet. “I estimate needing between three-quarters of a million to a million dollars to go online. The company has already raised half a million dollars from investors, plus there’s the profits from the phone apps. But we’re always looking for more investors.”
Kellerman told The San Francisco Examiner he doesn’t fear the competition, even though his company will also operate from the Bay Area.
“Texas Block ’Em is very different than typical poker and plays in a smaller niche category of skill-based games where users are required to learn a new game,” Kellerman said. “By contrast, Pure Play appeals to an established mass audience by offering well-known poker games.
“I think it’s going to be tough for anyone to invent one new game and have it become big in its own right.”
Kellerman recalled there used to be an online poker room called Duplicate Poker that mimicked duplicate bridge by dealing identical cards to players. “Duplicate Poker tried something similar several years ago by removing chance from the game,” he said. “They invested over $10 million and got 250,000 users to try their product, but had a tough time getting players to stick and eventually went out of business. I think it’s really going to come down to how many players are interested in learning a new game.”
THE QUESTION OF LEGALITY
Over the past five years, the U.S. Justice Department has busted more than a dozen illegal online poker rooms that permitted Americans to play poker for real money. Websites were shut down, operators were arrested and millions of dollars were confiscated.
I. Nelson Rose, a professor at Whittier Law School in California and a noted expert on gambling law, has served as a paid consultant for both Pure Play and Texas Block ’Em. He told The San Francisco Examiner that even though both entities offer online poker, they use vastly different methods to get around U.S. gambling laws.
“Under the law, for an activity to be considered gambling, it must contain three elements: consideration, chance and prize,” Rose said. “Consideration means you have to pay to participate. Chance means the activity involves luck, not skill. Prize means you can win money or something of value.
“When consideration is missing and something is free to participate in, it’s a sweepstakes. When chance is missing and an activity i
A serious business man and developer of software Arthur M. Pfeiffer, president of Palo Alto-based Thwart Poker Inc., will soon introduce an application that offers new poker game that is totally skill based and therefore entirely legal the inventor claims.
The game is called Texas Block ’Em and will legally allow Americans to play online poker for real money.
Pfeiffer, owner and founder of Thwart Poker Inc., told The San Francisco Examiner that the venture is expected to launch soon in the next year. Pfeiffer said, “I have invented a new form of poker called Texas Block ’Em that removes the element of luck from the game,” Pfeiffer continued, “Since my version of poker is 100 percent skill and involves no luck, it’s not gambling and therefore is legal.”
Pfeiffer commented on the claim he made, Texas Block ’Em removes the element of luck by eliminating the randomness that comes from dealing players their cards. Instead of randomly being dealt cards to play, players are allowed to choose the cards they want to play, thus creating a skill game and not luck or chance because each player has the same chance to play the same cards.
Pfeiffer explained the new version of poker, “In Texas Block ’Em, community cards are dealt randomly, but then players get to select any hole cards they want to play with those community cards. If two players pick the same hole card, both are blocked from getting it, which is the essence of Texas Block ’Em.” Pfeiffer went on, “In regular poker, each player relies heavily on the fixed laws of mathematics to calculate the probability that the cards dealt will give him a winning hand,” Pfeiffer added, “In Texas Block ’Em, each player relies heavily on his sense of human psychology in reading opponents to determine the probability that he can pick the right cards for a winning hand.”
Legal Online Poker Game From California In the Works
Last Tuesday's subcommittee hearing at which U.S. lawmakers looked at Rep. Joe Barton's Internet Poker Freedom Act of 2013 has allowed the federal proposal to gain a certain degree of newfound respect.
It's a respect that had perhaps been missing when the Texas Republican first introduced H.R. 2666 in July. Rep. Lee Terry (R-Nebraska) indicated as much when he stated near the end of the hearing that he and some of his colleagues were not enamored of the bill upon their first reading over the summer.
Terry jokingly said that lawmakers were of the mind that Barton's poker-only bill may have been "way out there" regarding certain language contained within the proposal. But the Nebraska legislator admitted that his colleague from Texas has always been viewed as being somewhat on the "cutting edge" of lawmaking.
Terry further stated that although the hearing included a few lighthearted and whimsical moments on whether or not God or Satan are the main backers of H.R. 2666, the legalization of online gambling in the U.S. is a serious matter and should be analyzed and debated accordingly.
That scrutiny is now underway and it finds lawmakers likely looking at the Internet Poker Freedom Act under a new light. Perhaps part of the reason for the proposal's improved standing was the strong showing at the hearing by Geoff Freeman of the American Gaming Association and John Pappas of the Poker Players Alliance. Both were quite convincing in their pro-Internet poker arguments.
H.R. 2666 may still be a longshot at finding approval among a majority of lawmakers. However, the odds of that happening have improved following "The State of Online Gaming" hearing before the House Subcommittee on Commerce, Manufacturing, and Trade last week.
Barton readily admitted that his bill is not perfect. But at least H.R. 2666 has gained favorable recognition and now has the opportunity to possibly gain some momentum toward the goal of regulating Internet poker at the federal level.
Rep. Barton's Online Poker Bill Gains Respect | PokerUpdate
According to a new report series by Academicon and PokerScout, the potential size of a regulated U.S. online poker market is $2.2 billion in the first year of operation and up to $3.3 billion by year ten. Before the federal indictment of unregulated poker in April 2011 (Black Friday), the U.S. was by far the largest market, accounting for 27% of worldwide revenue.
The study is based on an analysis of 4.6 million real money online poker players in 2009 and 2010, near the peak of unregulated poker in the U.S. The authors found that 1.4 million online poker players in the U.S. generated an average of $686 per year in revenue for poker operators, creating a $981 million market.
"Without a federally regulated online poker market, which appears unlikely, state-by-state markets will stay well below their potential," says Dr. Ingo Fiedler, an author of the study. "While a large state like California has a large enough player base to support an in-state market and even reach up to 80% of its market potential, smaller states like Delaware will not be able to maintain a market on their own," Dr. Fiedler adds.
The study reveals that 88% of all revenue comes from just 10% of The Players. Still, "the single most important driver of the size of state-by-state markets is the size of the respective player pool," says Professor Kahlil Philander, the other author of the report series.
Read more about New Study: U.S. Online Poker Market Worth up to $3.3 Billion - BWWGeeksWorld by Broadway World-com - #1 Site for Broadway Shows, Theatre, Live Entertainment, Tickets & More!
A local organization that is dedicated to helping brighten the holidays for area kids in need got a big helping hand Tuesday afternoon.
Online poker player Billy Vogel got together with some of his poker playing buddies to donate $2,500 worth of toys to Atlantic County Toys for Kids program.
Vogel collected the money and went out and bought the toys, storing them at the Ritz Condominiums in Atlantic City before donating them.
Vogel and his friends also donate to the Global Medical Relief Fund.
Full Tilt Poker has jumped back into second place in the worldwide online poker player traffic rankings 13 months after its relaunch under Rational Group ownership, with the latest increase in traffic attributable to a Build Your Bonus promotion.
The current promo at FTP is a rerun whose first showing increased cash game player action by 14% during the first week, PokerScout reported. The results look similar this time around, with a 13% boost seen in six days of bonus building.
Sister site PokerStars also enjoyed a spike in ring game traffic last week thanks to its Mission Week promotion in which players selected points targets and then proceeded to accumulate the required VPPs. That marketing strategy that leans toward gamification allowed traffic to rise 4%.
Next up for the world's leading poker site's December Festival is a milestone hand promotion this week that will pay out bonuses to players who sit in on the next 300 hands that end in '000,000.' Milestone hands are always popular at PokerStars and this week's affair will not be an exception. The sum of $700,000 will be credited to the accounts of lucky players all week.
Along with Full Tilt's ascent to second place, there has been some movement among the top ten poker rooms and networks. As of this writing, Bodog, Winamax and MPN are all tied for 8th place globally with 1,350 cash players in a seven-day average.
Bodog/Bovada remains under a microscope, as founder Calvin Ayre continues to be listed on the most wanted list of the U.S. Department of Homeland Security. That, coupled with the November raid of Bodog offices in the Philippines by law enforcement, has sparked some fear among Bovada players as to the security of their accounts.
Posters at 2 + 2 have reported that cashout speeds have not been affected, with check requests typically arriving within 7-10 days. Bodog/Bovada remains the top U.S.-facing site for cash game player traffic, despite Ayre's mug shot appearing below "Wanted for Illegal Gambling Business, Money Laundering" on the U.S. government website.
MPN is preparing for the defection of Ladbrokes and Unibet. The former will move to the iPoker Network on Dec. 21, while the latter will operate a standalone poker room beginning in Q1 of 2014. Traffic will likely dip at MPN as a result of the departures, with a bump out of the top ten not inconceivable.
The uncertainty of Bodog and the expected loss of liquidity at MPN could allow Winamax to grab sole possession of eighth place. The predominantly French-facing poker room leads that ring-fenced market over 11th place PokerStars.fr, who averages 150 less cash players weekly.
Over in New Jersey, there are no gaming site operators or founders on 'most wanted' posters in the state's newly-regulated Internet gambling scheme. The Division of Gaming Enforcement made sure of that by suspending review of PokerStars' online gambling license application for a two-year period primarily due to founder Isai Scheinberg's status as a fugitive with regard to the Black Friday allegations.
Without the participation of PokerStars, player traffic at New Jersey poker sites catapulted 32% over the weekend. Nearly 600 cash players were logged in at one time, reaching a new high in the three-week-old market. Golden Nugget joined six other casinos in hard launch mode after taking some additional time to refine their online poker and gambling offerings.
The All American Poker Network (AAPN) was the big winner in New Jersey over the past week, siphoning market share from both WSOP and Party Borgata. AAPN saw player traffic shoot up 45%, which made the roughly 10% gains of their previously mentioned competitors look tame in comparison.
The online poker industry saw traffic rise 1% last week, marking two consecutive weeks of improvement. But a 13% decline from mid-December of last year likely means that there are less fish swimming among the sharks in 2013.
Online Poker Player Traffic Update - December 17, 2013 | PokerUpdate
It’s still too early to determine exactly how much they have made and how sustained the results will be, but frontrunners Caesars Entertainment and Station Casinos both have realized proceeds from online gaming.
Caesars began generating online poker revenue during the third quarter of the year in Nevada and the fourth quarter in New Jersey. The company’s third-quarter earnings included only 11 days of online poker revenue. Caesars unveiled its World Series of Poker site Sept. 19. The company didn’t specify online poker revenue in its earnings report.
Station got an even earlier start, having already managed more than 1 million hands here, and is ready to roll out its product in New Jersey. Both companies take a percentage of gamblers’ money for every hand played.
Overall, Caesars reported revenue of $2 billion, down 0.7 percent from the third quarter last year. The company reported $112 million in casino revenue, a 7 percent decline offset by lower promotional expenses and increases in nongaming revenue.
Will the company’s tide turn with four online gaming outlets debuting in New Jersey? Caesars is teaming with 888 Holdings and Amaya Gaming Group for online poker offerings on the East Coast. But the company also is reeling from losses it assumed when it withdrew its bid to build one of Massachusetts’ first casinos.
Online poker also could be profitable for the Boyd Gaming Corp. and MGM Resorts International, co-owners of Atlantic City’s Borgata, who are teaming up with Internet gaming provider bwin.party.
During the third quarter, Boyd saw its losses widen to $37 million despite a 20 percent increase in revenue. Executives were happy with the results at Borgata but disappointed in spending by customers at Southern and Midwestern riverboat and racino properties.
MGM, meanwhile, is aggressively gearing up for online play in New Jersey. MGM’s losses narrowed in the third quarter due to a 9 percent increase in revenue.
MGM has the comfort of having a cash cow Macau property in its back pocket while waiting for New Jersey online revenue to roll in.
Two more companies have a similar luxury.
Wynn Resorts saw its earnings climb 63 percent to $182 million, up 7 percent from a year ago, due to revenue generated in Macau.
Las Vegas Sands also had a record quarter, with revenue up 32 percent to $3.6 billion and earnings up 82 percent to $809 million, thanks to earnings in Macau.
But neither Sheldon Adelson nor Steve Wynn has any interest in pursuing online gaming.
Wynn says he’s satisfied sitting on the sidelines as others pursue cyber opportunities. He is focused on a casino bid in Massachusetts after backing out of plans to build in Pennsylvania.
Adelson, on the other hand, has actively battled for a nationwide Internet poker ban, to the chagrin of most of his colleagues.
Another bellwether of the success of Internet poker will be Station Casinos. Station was the first company to offer online poker in Nevada, and its Ultimate Gaming is teaming with Trump Taj Mahal for Internet gambling in New Jersey.
Station posted a loss of $4.7 million during the third quarter, although revenue was up 3 percent to $305 million. The company focused much of its attention recently on opening a tribal casino it is managing near San Francisco.
American Casino & Entertainment Properties, operators of the Stratosphere and two Arizona Charlie’s properties in Las Vegas, hasn’t launched a real-money online poker play but is marketing a free product in advance of a pay site.
ACEP had a rocky third quarter due to increasing losses, a bid to refinance, reduced player volume and lower casino hold percentages. Revenue was down 1.6 percent to $84 million and losses soared 185 percent to more than $9 million.
Online poker starting to pad companies' bottom line - VEGAS INC