Online Poker

Online Poker
is part of a mini-series concerning
Online Gambling.

Mini-Series Articles:

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The general consensus among experts is that Online Poker is "A game of poker played over the internet.” Such pedestrian definitions may work fine on other wiki pages, but that definition is nothing but an uninteresting cop out used by the unskilled. Online Poker, while really being “a game of poker played over the internet,” is also a fetish, an addiction, a panacea, such a huge part of the internet as a whole you might as well say that it is as big as porn.

Just how big is Online Poker? Well, a recent study found that U.S. Regulation of Online Poker Could Bring $3.3 Billion in Annual Revenue. That is just the tax on poker gaming…not the untold trillions the game generates. Somehow, that sounds like Online Poker is a lot more than just "A game of poker played on the internet.”

History

Online Poker generates trillions of dollars in commerce.

Trillions of dollars that the U.S. government meddles with internationally.

Today, the mere mention of the powerful words “Texas Hold’em” will set many a kindly old grandmother scurrying to her home computer and wasting both an afternoon and all of next month’s pension check trying to get the perfect river card. But this was not always so.

At one time Online Poker was a just a twinkle in the collective eye of the internet. In those golden old days, nerds and hardcore gambling addicts would meet in IRC chat rooms and while away the time, playing such games as “five card draw,” “seven card stud,” and “swindle the noob.” These games were fun at first, but like any card game where no money is involved, they quickly became boring. While betting was frowned upon and no money was wagered at first, this was quickly changed when keyed chat rooms were made that allowed private games to be played.

Somewhere along the line, somebody with half a brain and a bit of cash figured out a way to make a Java Applet interface and since many investors and players were leery of online fraud, a set of rules that should be followed concerning how the game should be played online. Finally, after months of planning, weeks of security, and minutes of design work, Planet Poker went online and on January 1, 1998 the first real money game was played online. Soon after, the federal government would step in and alter forever how Poker would be played online.

Government Meddling

The U.S. government doesn't trust this guy, but I think he looks legit.

UPDATE If you play online poker and win, do not try to cash the check, the federal government is now taking an active stance against online poker and freezing online poker company's assets...chances are, if you win, the check will bounce. See here for further details. This tough new stance is likely to change at a moment's notice, depending on who is in office and who has been greased.

The United States federal government cannot seem to make up its collective mind and because of this internet gambling is illegal as of right now. Since wagering on card games is a major part of gambling, Online Poker is illegal as well, but this illegality seems to have about the same effect as making the download of pirate mp3 files illegal; people just don’t care and do it anyways. Because of this massive mismanagement of the whole affair, several scandals, arrests, and general tomfoolery have occurred over the years:

North Dakota

There are some smart cookies in the state of North Dakota. They have come up with the idea of allowing internet gambling to be legal within their state borders: as long as the company that chooses to move to North Dakota for the purposes of online gambling does all of its business within the borders and keeps everything (hosting, servers, records, etc) within those borders. Things were going great, imagine all the new and hefty tax revenue the state would garner. Those smart people in North Dakota even went so far as to draft a bill that would surely have become a law…until the federal government stepped in.

Citing the Wire Act, the feds told North Dakota that their great idea “might” violate federal law. This “might,” despite sounding quite ambiguous, was enough to force the bill down and now North Dakota has to go back to the drawing board.

David Carruthers

Imagine that you are a wealthy CEO of an Online Poker company. Now imagine that you want to fly in an airplane from Costa Rica to Great Britain because well, you are rich and you are minding your own business. Next, I want you to imagine that your plane, while flying from Costa Rica to the UK has to make a brief stop in Dallas, Texas. Got it so far? Okay, now imagine that while your plane is getting refueled in Dallas, federal agents board the plane and arrest you. You are put on trial and you are found guilty of racketeering charges and you are currently being held under house arrest in St. Louis, Missouri.

Oh yeah, and by the way, you are not a United States citizen.

This just one of several attempts made by the United States federal government to impose its beefy and ham-fisted laws upon other countries around the world. The real motive here isn’t some courageous and noble effort to end online poker. What it is, especially in David Carruthers case, is the feds trying to get paid at least something while billions of dollars leave the country due to online poker.

Norbert Teufelberger

BWIN is Teufelberger's company, which makes billions.

Bwin owns soccer teams...and besides offering online poker, they offer online sports betting on soccer teams.

Feeling left out, France feels the need to step in and rip somebody off…and violate human rights while they do it.

Norbert, who besides being named after a crappy Eddie Murphy movie, happens to be the CEO of BWIN, an Austrian based online poker and gaming company. While Norbert (I still lol when I type that) was giving a press conference in France, he was arrested for violating French gambling laws. This is another example of a country, butthurt by the fact that it cannot make any money off of the billions that the poker industry generates, so they recoup their imagined losses by extracting money from “offenders” in the form of “bail” and “fines.” Bail and fines in this case mean little more than “highway robbery” in this case as French law makes it so that gambling is a state run monopoly.

	“	We have not infringed EU law and so feel we are in the right. This is an infringement of human rights. The commission was already investigating seven EU states - Holland, Finland, Hungary, Italy, Sweden and Germany - for breaching the principles of freedom of establishment and services enshrined in EU treaties.	„
	—Spokesperson for Bwin, an Austrian online poker company.

Jay Cohen

	“	Antigua doesn't see us as criminals. We're licensed and regulated by them to do what we do.... In Antigua I'm not a criminal.... I'm only a criminal to a bunch of fat cats in Washington.	„
	—Hayden Ware, fugitive from American justice

Jew has the unlucky situation of being the first CEO ever to be arrested for owning and operating an online poker company. Even though his company was based out of Antigua, he was tried in United States courts, found guilty, and jailed for four years.

Electric Money

Also known as digital cash, electric money is often a heavily debated issue when discussing online poker. Since online gambling would suck as bad as it does in real life without the actual excitement of wagering, many gambling companies decided to allow credit and debit cards as a means to pay out or to deduct wagered cash. In an unprecedented move, the United States reminded several credit companies that what they were doing was in violation of the Wire Act and was therefore an incredibly bad thing. Instead of fighting this as part of international law, the credit companies caved in and made the use of credit or debit cards a no-no.

Screwed over by both the government and the credit conglomerates, online poker sites decided to invent a loophole around the situation that they were forced into. By creating and providing what is called an “E-Wallet” players could transfer funds directly out of their savings accounts and load up credits through a third party to later be used on the poker site. While this was a boon to the gambling industry and poker in particular, it has several drawbacks. First, once money is placed in an E-Wallet, it cannot be taken back out and put back into the original bank account because, yes, this would be a violation of that old pesky Wire Act. Second, with access directly to a bank account, the average sucker can blow through his life savings in a matter of minutes. While the money inside an E-Wallet can be moved back and forth from many internet poker sites, the only way a person is ever going to have direct access to that cash is if they burn through it all and run to zero, or if they open an offshore bank account that will then wire them their own money…at a substantial charge.

As of this writing, the federal government has not yet found a way to tax or prosecute third party E-Wallet companies, so they seem to be mostly safe to use…but don’t worry, they will eventually.

Neteller

In 2006, Congress passed laws attached to the Safe Port Act (a law meant to strengthen port security) that effectively banned the company from the U.S. market (see UIGEA below). Later, federal agents arrested the firm's two founders and seized their pricey Malibu beach houses and millions of dollars in other assets. Neteller's crime: It processed payments for U.S. poker players and thousands of other Americans who were using Internet gambling sites.

Also, if that weren't enough, the old Wire Act got into the picture as well. By using the Wire Act and the Safe Port Act, online gambling companies face a "double whammy" when it comes to prosecution for money transfers. But don't worry if you just like to play online poker every once in a while, the feds only go after the big fish...because that's where the money is. This is why there is "still confusion" over this whole issue...they don't care about what you do, they already taxed the money you spend by taking taxes out on your paycheck. But because gambling isn't supposed to exist as it is illegal, they can't find a way to tax foreign companies that host and make billions of dollars off of online poker sites, so they just end up arresting company employees and seizing their assets, whether they are American assets or not.

	“	Even as bettors around the world gamble millions of dollars online, confusion reigns about the legal status of those bets and the companies that handle them. Neteller was "a colossal criminal enterprise masquerading as a legitimate business," violating a 47-year-old law aimed at organized-crime bookies. Prosecutors contend the law applies to any and all betting on the Internet, as well as the electronic money transfers enabling those bets.	„
	—The United States Justice Department - even with two laws on the books, there is still confusion?

UIGEA

In 2006, a portion of the Safe Port Act called the Unlawful Internet Gambling Enforcement Act was made law. The law basically states that you can't make wagers on anything while using the internet. The law is so it allows for several interpretations each according to an individual situation…meaning the more money a person might have, regardless of whether the money was made through online poker, the more illegal they will be. Because of this law, several international online poker companies have pretty much turned their backs on having to do with anything involving the United States. This has the general effect of shooting oneself in the foot by depriving literally billions of tax dollars and a slew of new cases where insipid and crazy arrests and court dramas will occur.

Recognizing the error, some Americans have decided to try to modify the UIGEA and introduce a new bill that will be called the IGREA (Internet Gambling Regulation and Enforcement Act) where it is argued that yes, internet poker and gambling can be regulated safely and tax dollars can be garnered in a sane fashion. Typically, this bill is still floating around out there someplace adrift like an orphan…

What the Hell is a Rake?

While not being an actual rake, a poker rake does basically the same thing.

Besides being a common yard implement, a rake is also the amount of money that an online poker provider will generally take from all games played on its site. Usually a rake is around ten percent of the total game pot. So if the pot reaches 100 dollars, the final take when a player wins and after the house takes their rake is 90 dollars.

The rake is pretty much how all online poker makes money, but there are several other innovations that have come along to either increase the rake or to get rid of it entirely and just take the money directly out of the pocket of the player.

Entry fee. An entry fee is deducted from a player’s account prior to them playing at all.

Entry fee plus percentage. An entry fee is deducted from a player’s account and a percentage of all their winnings is deducted at the end of play.

Tournament play. This is just a fancier form of an entry fee. Usually a tournament fee is larger than a normal entry fee…and sometimes both of them are levied against a player.

Good old fashioned fleecing. This occurs when a player is basically bum-rushed by colluding players who work for the online gambling company at the same table. While this is very illegal and will result in the expulsion of anyone who is found out as a colluding player. While advertised, this never happens because usually the house is the one guilty of the collusion.

Fraud

Russ "Dutch" Boyd, world famous online poker cheat.

Many would be online poker players have mentioned the fact that fraud is their number one concern prior to joining up a poker game. Some posit that the games might be heavily weighted towards “the house” and that players cannot get a fair shake when it comes to the cards they are dealt. This notion is probably the silliest notion to come down the pike in a long time. Internet poker, when played on reputable sites is probably the most safe thing you can do with your money, it’s not the security of the site you need to worry about, it’s the collusion between other players, insider cheating, and plain old cheating with the order of the cards.

	“	I don't give a fuck about shit.	„
	— Typical administrator

AbsolutePoker

In 2003, a company named Tokwiro Enterprises moves into the online poker business and founds a company called AbsolutePoker. During the process they make what is called a "super user account" which is an account that allows a person to go into any online poker game room and see all of the cards that all of the players have. They made the accounts, to be used by employees only, as a means with which to see if there are any security holes in their poker software...but the real security hole was the super user account itself but nobody realizes this. In 2006, after three successful years, Tokewire is embroiled in a scandal:

Four players, Potripper, Steamroller, Doubledrag and Graycat are all pretty bad at online poker...in fact, it is safe to say that they suck. They lose money hand over fist, eventually get tired of it, and quit Tokewire altogether. What most people didn't realize is that these four (some speculated that they were really all one person, playing with four accounts from four different IP numbers) had a secret. this secret was that they knew what the super user account was and worse still, they knew how to access that level and play poker with it. About a year after leaving, these four users all showed back up and started winning. Not winning here or there, but winning everything.

Some of the older users remember the four names and know that something is up. They file complaints against the company and the players themselves, citing amongst other things, the improper use of super user accounts. After a lengthy investigation, it is found that the four accounts are all employees of AbsolutePoker. Typically, Tokewire issues the following statement:

	“	We have determined with reasonable certainty that it is impossible for any player to see the hole cards as was alleged. There is no part of the technology that allows for a '¨superuser' account.	„
	—AbsolutePoker is lying.

Not satisfied with this bullshit, players are still convinced that it is all a cover up. A massive investigation ensues, culminating in the discovery of the super user account fraud and several thousand violations...including the winning of a million dollar tournament where cheating was suspected. Tokewire is forced to own up to their lies and mistakes and offer this statement only a few weeks after telling everybody that it is "impossible for any player to see the hole card of another player."

	“	Based upon our preliminary findings, it appears that the integrity of our poker system was compromised by a high-ranking trusted consultant employed by AP whose position gave him extraordinary access to certain security systems. As has been speculated in several online forums, this consultant devised a sophisticated scheme to manipulate internal systems to access third-party computers and accounts to view hole cards of other customers during play without their knowledge.	„
	—Whoops, sorry about that guys!

Cutting the Cord

This is a very primitive form of “delete fucking everything” where a player will realize that the cards they have suck and will disconnect their internet connection prior to losing the game. Later, the player logs back on and tries to find out if the wager they made before disconnecting has been deducted from their account. If the wager has been taken out, they will file a protest informing the poker site that they were unable to finish their game due to a disconnection of their internet. If the gaming site allows this, the player then files another complaint saying that they have a right to own a percentage of the pot that was part of the game right before they lost connection…because…yah know…I was gonna totally win that hand man.

Usually, this sort of thing will earn an instaban of epic proportions but has been known to have worked in the past. Just like anything that involves cheating a casino, it will usually work once and then they are on to you.

Dealing With Cheats of the Future

As with the game itself, the security surrounding the game has become intricate and specialized to the point of nausea. Players are watched and every move is recorded and added to databases. When a player does something that does not match the information that is in his or her database, that player is flagged and a closer look at their playing style and anticipated actions are checked against what actually happens. If a player does not “match up” they will be hounded by the site until they make an actual verified mistake and will be summarily banned out of existence.

This is profiling taken to the extreme and also it is a way online poker casinos tend to be hypocrites and thieves. It’s perfectly okay for the casino to use a bot or third party programs to aid in their security and winnings, but it is illegal when a player does so…and will usually end with a player having their cat nailed to their door in the middle of the night.

Quotes

	“	the Wire Act, passed in the 1960s, does not apply since the Act was written before the Internet even existed.	„
	—That doesn’t mean they wont try.

	“	In an anonymous world where everyone is after your money, and where lying and preying on the weak are encouraged, it's easy to get paranoid that others are cheating. And in fact, others are cheating—or trying to.	„
	—Internet Poker Hate Machine.

	“	The same qualities that have made the rest of the Internet a wonderland for deviants, thieves, and nihilists of all stripes—near-perfect anonymity, the ease of taking on multiple personas—encourage behavior most would be too scared to try at a poker game on the Vegas strip.	„
	—So online poker is exactly like /b/ then?

	“	For those too stupid or busy to cheat in person, there are programs that play for you. Sometimes bots win. But today's computers are better at games like chess, where there's perfect information, than at sorting through the lies, feints, and uncertainties of poker.	„
	—How to Cheat with bots.

	“	security monitors often pick up their scent, especially when they spot one player going 36 hours straight without a bathroom break.	„
	—How to tell if your opponent is a bot.

	“	The cheater, whose illegitimate winnings were estimated at between $400,000 and $700,000 by one victim, was an employee of AbsolutePoker.com who hacked the system to show that it could be done	„
	—Spokesperson for the Mohawk tribe in Canada.

	“	Reaction was essentially to stonewall and deny any cheating had ever occurred or that the described events were even possible.	„
	—Potripper, a guy who stole hundreds of thousands of dollars.