Casino Observer

Somewhere in the world is a pinprick on a map which says, Gibraltar. Don’t ask me where. It’s one of these “countries” like Vanuatu that’s “doing the right thing” by eliminating its tax haven status — the elimination is to be completed by 2010. That makes it slightly more respectable than Belize or Labuan — I think that’s a compliment. Anyway, this Brit colony is home to PartyGaming Plc, the company that owns the PartyPoker.com and PartyBets.com websites. This pillar of respectability is a publicly quoted company on the London stock exchange (those Brits know no shame — if it makes money, they want shares in it).

But business is down. The average casino take dropped 12% in the last two months. The more interesting news is the average number of active daily poker players fell 19% against the same period in 2008 (that’s a big drop!), with the daily turnover in the poker room down to $815,400 from $855,300. Guess what. The shares fell. Those Brits are fair-weather friends. Whilst a company’s making money they’re solid, but if things don’t go so well, they run like scared cats (never happens like that over here). Anyway, the company’s blaming increased competition from those companies still accepting business from the U.S. Can’t think which companies those are!

Now remind me again. Why is it that PartyGaming pulled out of the U.S.? It might have something to do with the Feds arresting David Carruthers, the CEO of BetOnSports back in 2006. After that all PartyGaming executives stopped traveling to the U.S. — normally, they came to the major World Series of Poker events to show the flag. As it was, PartyGaming was the biggest online poker company in 2006. Its slipping a bit now — shares have fallen 28% so far this year. But rival 888 Holdings Plc’s shares have risen by 4%. Think “heat” and “kitchen” and is the party over if 19% fewer players are using the room?

But what about the rumors? Back in May, word went round that the negotiations begun in June 2007 between PartyGaming and the U.S. Department of Justice had reached a settlement. Unfortunately, there’s been nothing since then so more BS from someone in the system. There’s no sign this Administration is going to back off its anti-internet-gambling stance although the new Chairman, Rod Perry is supposedly still in talks with the DOJ. 

Perhaps we can do more for ourselves. Did you see the Poker Players Alliance is off to Minneapolis, Minnesota next week? It’s partnering with the American Gaming Association to host a charity poker tournament at the Republican National Convention. The mission? Well, the good cause to get through the door is fund-raising for the Paralyzed Veterans of America. On the sidelines, there’ll be lobbying but don’t hold your breath. It’s a bit like Prohibition with high-moral tone to the hypocrisy from the politicians. Can’t see any change coming before the elections. For those of you who didn’t catch the news, the matching tournament at the Democratic Convention raised $60,000 with Ben Affleck the last player standing.

There’s a brand new game in town. Just when you thought it was safe to play online, some of the online casinos and poker rooms have run into problems with their check processors. The best have been up-front about these problems. They’ve sent out apologies warning it’s now going to take three to five weeks to pay out on our winnings. Others are just letting the clock tick on and dealing with complaints as and when we make them (great customer relations and service standards at work there, guys).

So what’s the story? In the good old days, moving money into and out of the online casinos and poker rooms used to be same day/next day. Then along came the Unlawful Internet Gaming Enforcement Act of 2006 — jeez, who needs enemies when you got friends like those guys on Capitol Hill! What were they thinking?!? Someone should take an axe to those lobbyists who sweet-talked their pet politicians into passing this anti-gambling measure. And not even honest enough to deal with whatever the problem was supposed to be head on. But keeping their local interests in business by hitting the banks and credit card companies for most of the best online sites — that’s the offshore sites, of course.

At first, it wasn’t so bad with Neteller and MyCitadel still in the game, but when they were forced to pack up their tents and move out of the US, dark days came upon us. Why so dark? Well, the UIGEA was just one of the bricks in the wall. When you put politicians and lawyers to work on a problem, you can bet the result is going to need us to pop a smart pill to get even a vague idea of what’s going on. In this case, we have to go back to the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 — betcha didn’t know that was the full name of the Patriot Act — took a real big crowd of loyal Bushies to come up with that name.

The Patriot Act continued the trend of the Money Laundering Control Act of 1986 and the Bank Secrecy Act of 1970. You get the idea. So let’s just cut to the chase. The U.S. Treasury packs a lot of heat to investigate all the financial transactions going through banks. Those Treasury wonks can now pick up any payment going to or coming from an institution the government don’t like. Since the government done gone picked out all those internet gaming sites for the finger, the banks have got ever colder feet when it comes to processing payments into and out of them.

The result? Massive delays in processing checks back to us. Well, a big “Thank you, guys!” from all us gamblers.

Write your local congress person and complain about unfair treatment for online gamblers. Make a difference. Make yourself heard. We are not terrorists. We are not money launderers. We are your voters and we’re real upset with you.

This August is supposed to see the launch of the Cereus Poker Network (not sure this is the most successful of puns given all the history), which is a new online poker room supposed to rise like a phoenix out of the wreckage of Absolute Poker and Ultimate Bet. For those of you new to this story, both rooms are owned and operated by the same company, Tokwiro Enterprises Inc. On virtual paper, combining the two produces what should be the third largest online poker network. Whether it turns out that way all depends on the players. Will they remain loyal and decide to swim in the same bigger pool? To encourage them to transfer to the new platform, Tokwiro is going through the ritual of promising incredible new features, more action, more tournaments and massive promotions (now there’s a surprise).

All other things being equal, it should be a no-brainer for existing players to roll over on to the new platform. Except there has been some player “unhappiness”. There have been a few incidents of cheating, but the spark that lit the fuse came with the activities of the high-flying Josh Field. This is the player formerly known as JJProdigy who (graciously) gave up $140,000 of loose change standing to his credit in the PartyPoker $500k. He was caught playing on two accounts during the tournament, so forfeiting the winnings and grovelling in apology seemed the least he could do.

Unfortunately, the backlash swept past him and has swamped Absolute Poker and Ultimate Bet (with some fallout for the online poker industry in general). Field has been banned for life (which is the kind of treatment WADA demands for drug cheats in sport — try telling that to an MLB player!). This ban is wee bit on the harsh side for someone who has yet to see his eighteenth birthday. But the industry is too interested in trying to placate the players to care about one young guy’s rights. The managers of all the major poker sites have been in full damage limitation mode, talking to the the media and the Poker Player’s Alliance (PPA) to maintain the trust of players.

But back to Absolute Poker and Ultimate Bet, I don’t know (and don’t much care) who has the rights and wrongs of all the allegations that have since surfaced about cheating on these sites. If you believe all the web chatter, Russ Hamilton and all the others named have a lot of explaining to do. The Kahnawake Gaming Commission is not covering itself in glory either. With a major scandal exploding around them, it issued a statement on July 23 (see http://www.pokernews.com/news/2008/07/kgc-releases-official-statement-ultimate-bet.htm). Better luck next time, guys. Weasely words aren’t going to cut it. Only detailed facts coming out of a full investigation restore credibility.

More generally, on July 22, the PPA released a statement prepared by Senator Alfonse D’Amato (at http://pokerplayersalliance.org/press-releases/2008/07/22/press-…-scandals/) which calls for proper U.S. licensing and regulation to deal with the lack of transparency and accountability in the online poker world. There are further concerns about children accessing online sites, and the incidence of gambling as a destructive addiction and how government should address it. The Senator wants to clear the air (just like those guys at the EPA).

So with the reputations of Absolute Poker and Ultimate Bet in tatters, it’s hardly surprising that their owner has decided to rebrand. Except that, without a full investigation and a proper report by an independent commission, who are they trying to fool? A name change and some promotional freebies are a spit in the wind. Given that the two leading sites, PokerStars and Full Tilt, happily accept U.S.-based players, most everyone is likely to end up there. And like, why should we care what serious rebranding Tokwiro tries? To regain lost trust, you have to rebuild from the ground up.