Bank accounts, poker sites, and player's money

n an apparent crackdown on Internet gambling, federal authorities in New York have frozen or seized bank accounts worth $34 million belonging to 27,000 online poker players, according to representatives for the players and account holders.

That's the lead paragraph in a Wall Street Journal article the other day. And it's wrong.

It's correct that Poker Player's Association said that, but it's not correct that PPA represents players -- they are a lobbyist for poker sites. And, it's not true that poker player's money was seized.

The money seized does not belong to poker players. It belongs to third party payment processors (called money launderers by the DOJ) who owe the money to poker sites who in turn owe the money to poker sites.

Poker sites would like you to think it was your money seized so they can blame their failure to pay their debts on the US government. And PPA is just doing their part in helping poker sites prepare to scam you.

The misrepresentation that PPA is putting out gets picked up by the WSJ and even by some of my favorite bloggers. PPA disgusts me.

Removing thorns from UIGEA

I wonder why the PPA hasn't been trying to support this legal effort rather than trying to have online poker declared illegal?

Online poker isn't currently illegal. If PPA has it's way then online poker offered by companies not approved by the US government would be illegal.

Update:
Here's some more on it.

State regulation and internet poker

A commenter to my recent PPA post asked about the form of state regulation I might like to see.

I don't see any reason to change what is. Every state already regulates gambling to some extent (except for Hawaii and Utah, which just ban it outright).

Regulation of the internet should be done by international treaty, not by the Federal government, not by individual states. Whether it's internet porn, or internet gambling, or internet sales of motercycle parts, or internet political discussion doesn't really matter. It's a form of communication. It's protected by the first amendment. Government agencies have no business meddling in it.

Commercial transactions, such as gambling transactions, do have some special government interests involved. One such interest is to protect citizens from fraud. That's a good thing. But we don't need regulation to do that. We don't need criminal law to do that. Regulation and criminal law are both very heavy handed. Commercial fraud is a civil tort and we need wide discovery rules in the individual state courts for citizens who want to bring civil action against interet sites such as Absolute Poker. We need broad ability to go after affiliated assets, such as assets of high profile paid spokespersons or of internet companies who do business with internet gambling sites.

Let's see what Annie Duke and the PPA think about that idea?

More PPA thoughts

They actually have "talking points" on their website. I think that's creepy. But I have some thoughts about them.

Technology has progressed to effectively combat problem gambling and ensure that players are of legal age.

What does this even mean? What technology effectively combats problem gambling? I read a recent Newsweek story about advances in drug treatments for some addictions, but they talk mostly about more direct chemical addictions. Although the brain chemistry works in a similar way for gambling problems, were still a ways away from an actual technological treatment.

So I guess they're talking about computer technology. Are they talking about some overall government tracking of gambling activity? Some big brother technology? What are they talking about here? And why is it a good thing?

Billions in potential tax revenue from online poker are being lost under the UIGEA.

Uh. This is nonsense. There was no tax revenue. UIGEA didn't cause something that never was to be lost.

Appropriate federal regulation can ensure that minors are kept out of sites, services are provided to problem gamblers and the proper taxes are collected.

Now we get to the nitty-gritty. Federalism. Historically in the US gambling regulation has been a state function, not a federal function. The Wire Act was an exception and sports betting in general has been an exception. Casino gambling, poker, horseracing, bingo, and other forms of gambling have been left completely up to the states to regulate.

Is it the position of the PPA that the US government should federalize the regulation of gambling in the United States? Do they really think that's a good idea?

Prohibitions don't work. The UIGEA effectively bans online poker in the U.S. and drives those players underground. Meanwhile, poker continues to grow in popularity nationwide. 75 percent of Americans oppose banning online poker.

The problems with UIGEA is that it interferes with personal banking transactions and tries to regulate international internet financial transactions in a very heavy-handed way. Exempting poker isn't going to do anything to solve the fundamental attack on freedom represented by UIGEA.

If Congress allows me to bet on horses and state lotteries online, why can't I play a skill game like poker with other consenting adults?

This skill game arguement is a joke, as I've pointed out many, many times. It just makes PPA look like a bunch of rubes. Three Card Monte is a skill game.

Please co-sponsor and support HR 2046 "Internet Gambling Regulation and Enforcement Act" and HR 2610 "Skill Game Protection Act".

I don't know what these are, but they just sound bad.

Federal regulation of the internet is a bad thing. Period.

We don't need Federal Protection of Skill Games. We need Federalism in the sense of allowing the individual states to regulate gambling.

I don't know who PPA actually represents. But who do they think will the most likely to benefit from having federal regulation of gambling of of the internet? How do poker players benefit from that kind of nonsense?

Update:
Here's another view on PPA. Well not another view, another expression of the same view.

PPA Update

Life's a Bluff's blog has some criticism of PPA. I made a comment in the thread. You might want to check it out.

Frank (of Lifesabluff) also made a comment on PPA's discussion forum. I didn't bother because I don't know what their moderation policy is, but I can guess.

Their response to his post is interesting. Basically they argue that we should ignore systematic cheating in the poker industry because we don't want anyone to think there is systematic cheating in the industry.

Good thinking. Bunch of slimeballs.

PPA and a softball interview

Lou Krieger interviews some PPA slimeball. Somehow I doubt that Lou asked him where the PPA gets their funding.

More on PPA

Balko commented on my post about his upcoming PPA talk.

I like Balko's blog a lot and like his work. He's done some really good work on police use of SWAT and related subjects. Very good. But I think he's out of his league with PPA.

He says

As for regulation and barriers to entry, well, you fight your battles one at a time. The best bill in Congress right now is the Frank bill, which calls for complete legalization, albeit with a heavy federal regulatory structure. Yeah, that's a compromise. And even it doesn't have a chance in hell of becoming law.

Heavy regulation can easily result in poker becoming illegal, not legal. In most states it's already legal, with various degrees of regulation. There are no federal laws against poker, and so far courts have not supported the DOJ claim that the wire act covers the internet.

PPA and Balko

Balko should ask PPA where they get their money.

I wonder if he knows it's not from "members".

PPA isn't for legal poker, they are for heavily regulated poker with strong barriers to entry for providers of poker games.

Balko actually writes for Reason and calls himself a libertarian. He should be ashamed of himself for supporting those people.

Save the Children

I assume most of y'all have read about Sean Sheikhan's immigration problems.

This has become pretty standard stuff these days, with a policy of deportation of criminal immigrants.

Part of the problem might be a severe misunderstanding about what's going on. Such a misunderstanding is shown by Lou when he makes this comment.

I’m no friend of Sean Sheikhan, but I do feel that ICE’s efforts to deport him amounts to piling on. After all, he served time for his offense. If deportation was deemed to be the thing to do, it should have been part of his original sentence.

The original sentence was for an infraction of a state law. Immigration status is a federal issue.

I don't think that's a small issue. Part of what's going on in this country is that the right wing anti-immigration nutcases want to blur the lines between state and feds -- they are very anti-federalists.

I'm surprised to see Lou arguing for a strong central government. Maybe his support of PPA is warping his politics.

I don't think violation of a state law should ever be a criteria for maintaining resident status.

PPA is a fraud

The PPA is a fraud and anyone who promotes their misrepresentations is just trying to con you. That includes Pokernews.com.

The PPA claims to be an organization of poker players, but that's simply not true. They're an organization of secret commercial interests who has a list of poker player names which they use as a front.

Individuals can join with no dues. They don't raise money at all from their "members", they raise money from un-named commercial interests and that's who they're going to serve, not you. They serve the money. You're just a name for them to put on a list and wave around in the air.

What does the PPA support? They support the idea that poker is illegal. According to John Pappas, the new head of PPA

Well, to be clear, there's really only one piece of legislation that's specific to poker and games of skill. That is the Wexler bill, and that is the bill that the PPA promised to deliver to its members. As soon as the UIGEA passed in the dark of night last year, we were going to get an exemption. And that's exactly what the Skill Game Protection Act, HR 2610, introduced by Robert Wexler, seeks to do. So that is the only bill that's specific to poker.

The UIGEA only applies to poker if poker on the internet violates US law. No US court has found that to be the case, but PPA supports the argument that internet poker does violate US law.

Why would they do that?

To give their commercial supporters monopoly control over online poker by giving the US government the power to regulate content on the internet. BoDog does not support PPA. FullTilt does. PPA is an organization of commercial interests who don't want their identity known who's goal is to establish monopoly control of internet poker.

But they constantly lie about who they represent. Don't trust the sonsofbitches and don't trust anybody who tries to tell you otherwise.

Luck v. Skill

I havn't read The Poker Chronicles in a while and was catching up on it this afternoon. I ran across an old post from back in May about a really stupid idea from David Sklansky, Howard Lederer, and Annie Duke that Freakonomics picked up on and actually seemed to think it was a meaningful idea about poker as a skill game. It's not a meaningful idea at all.

You might notice that Annie had made her blog post promoting the idea as part of her pimping from that scam organization, PPA.

Let me quote Annie's statement of the idea.

But now let's say that we have our two equally matched poker players and I lean into one of them and whisper in their ear that I want them to lose the next match as quickly as possible. The player would be able to do it, and fast. They could easily come up with a strategy that would insure that they lost (for example they could check fold every single flop). Baseball would work the same way. Remember the Chicago Blacksox?

The ability to purposely lose is a very definitive argument that a game is all skill. Notice that if I asked you to purposely lose at a roulette game or Baccarat game (where the house took no edge) you could not do it.

The Poker Chronicles points out how stupid that idea is by pointing out how to structure bets in roulette, craps, and baccaret to ensure a loss. In poker you have to depend on your opponent not taking counter measure if you want to ensure a loss, that's not even true if you want to ensure a loss in table games.

It's idiots like Annie Duke, with the apparant brains of a dead turnip, that are pimping your support of the PPA. Keep that in mind.

D'Amato and the PPA

I started this post a while back and never did anything with it.

It's just an example of how good the PPA is at promoting itself. They misrepresnet who they are and who they represent, they can't be trusted, but they can be depended on to get their name in the paper.

When they hired D'Amato after he failed to get re-elected they got a lot of coverage. But who is D'Amato? What kind of background does he really have?

Insider stock trader

HUD corruption

Dirty campianer

Character witness for the mob

Can't think of a more qualified person to represent the poker world.

Hell just froze over

Yep, I actually found something else I agree with Mason Malmuth about. Earlier I found myself in agreement with him about PPA (my feelings about Poker Players Alliance might be a little stronger than Mason's feelings about them.)

This time I'm in agreement with Mason about MGM's behavior in the Case of Nolan's 5k Chip. For those of y'all that haven't heard, Nolan Dalla tried to cash an MGM $5k chip that he'd gotten from a 3rd party. They wouldn't cash it. Nolan got upset about it. 2+2 magazine published an article by Nolan on the event. Mason commented that he agreed with MGM's behavior and thought Nolan should have known better.

Two Plus Two magazine only keeps it's stories online for a short time, so I'll quote liberally from it here.

To start with, Nolan was given the chip by someone he won't name in payment of a debt.

He went to the cage at the MGM Casino and handed them the chip. They asked what game he'd gotten the chip from.

He told them he did not get the chip from a gaming table, that he'd had it at home.

They asked why he had kept the chip at home.

He seems to have gotten really vague with them, avoiding telling them where he'd gotten the chip.

I do not come into the MGM very often. It’s been sitting there about a month or so, but I want to cash it since I’m here today.

Now, I don't know if he was intending to be vague. I'm guessing that he was thinking it was none of their business where he got the chips from. But such vagueness does tend to set off alarms among casino bosses, whether it's the pit or the cage. In the cage everyone is trained to be alert for signs of avoidance, not just the bosses. It's best to be straightforward with those critters.

The cashier asked if he was a player, he told them yes, but he didn't have his players card with him.

He gave them an id and they looked him up.

Mr. Dalla, I do not show that you have any recent table-game activity.

They still don't know where he got the chip. They're telling him that they don't think he got it from them and he's really not being responsive to that when he responds

Yes, that’s correct. But, I am an MGM customer. I play poker here, bet on sports, and play some video poker.

Well, he didn't get the chip at any of those places. The cashier gives up on Nolan and goes to consult with the cage boss.

The cashier comes back and they have a short exchange

Cage Manager: Sir, we have a problem. You say you did not get this from a gaming table here at the MGM?

Nolan Dalla: That’s correct. It’s been sitting at my home. I obtained the chip at the Bellagio Poker Room about a month ago from a friend.

He asks Nolan why they guy gave him the chip, and Nolan says it was a repayment for a debt and he thought such 3rd party chip tranfers were common and no big deal.

The cashier corrected on that thought -- telling him it was a big deal and asking him who the chip belonged to.

Now Nolan gets smart, not a good idea. "It belongs to me", he tells them.

They want to know where he got the chip. For example, did he get it from an MGM table games dealer? But Nolan isn't telling them. That's got to look bad from the cage point of view. What's Nolan trying to accomplish here?

They asked him again where he got the chip. Finally he tells them. They look up his friend and find that his friend hasn't been rated at an MGM table game in years.

Now things are looking bad for Nolan and his chip.

The cage confiscates the chip, refusing to cash it and refusing to return it. They give him a receipt for the chip.

Then Nolan says something which just isn't true. He says,

Let me be perfectly clear. I am an MGM customer. I produced a valid ID. I told you where I got the chip. In fact, I got it at another MGM property which has never refused to cash chips of this size. I have never heard of a licensed Nevada casino refusing to pay a customer.

He's being misleading when he says he got it at another MGM property (Belligio). Yes, he got it from there. But he didn't get it from them. They had nothing to do with the transaction between him and his friend and his mentioning the location is just a misdirection.

But that's not what just isn't true. The part about never having heard of refusing to pay is not true. There was a well publicized law suit against Becky Behnen and the Horseshoe that he's well aware of when they refused to cash a chip from some poker playing friends of her brother.

Maybe Nolan just forgot.

I'll finish this later.

Update: I fixed a typo, making an above clause read "he's really not being responsive" when I'd said he was responding.

Who PPA really represents

I misplaced the damn link but I read something the other day about PPA offering their new chairman, former Senator D'Amato, a five million dollar bonus if he can get a carve out for poker in the recent law to block funding access to online gambling. His 100k salary (I think Linda Johnson, his predecessor got less than 20k a year) plus the bonus is funded by Poker Stars and Full Tilt.

Now we know who they represent -- two online sites, not players. It also explains why they are going for the carveout rather than the more direct approach of just getting the law repealed. Barney Frank wants to just get rid of that law. So does the WTC.

If they get a carveout then Party Poker and Ultimate Bet and Bodog, who have blackjack or are affiliated with sports betting would still have trouble with getting funding from their players. But Poker Stars and Full Tilt would have an open field. Going for the carveout is just a way to gain a restriction on the competition for their sponsors. It's not in your best interest at all.

Today I got an email from FullTilt that they're giving me $300. A couple of months ago they sent me $100 but when I went to collect it I found that I'd just get it $10 at a time, as I played qualifying hands. I didn't have any money on the site so I never collected any of it. But $300. That's different.

I went to the site and didn't see any funding options that are easy for me, so I looked at some freerolls. They have a freeroll where just entry into the freeroll gets you a free membership into PPA.

These people are slimy, they're conning you by saying they represent you when they don't represent you, and they want to collect names so that they can claim to congress they are representing millions of poker players while they're actually representing two foreign companies.

They misrepresent themselves totally, to everybody. None of those sonsofbitches can be trusted. Supporting them is insane.

UPDATE
Here's the link on who's paying Damato that I couldn't find.

Who does PPA represent

When updating a recent post about PPA I said
>

On a related not, Ed Miller shows really bad judgement by recomending PPA. The funny part about his post is that he's attracted by being able to join for free and that's one of the things that screams "scam" to me.

In the comments dmw said

I don't see where the con is. Sounds like they are a special interest group like any other one.

My doubt is about what special interest group they actually represent. I don't think they're being honest about that.

I have a lot of reasons for my doubt, two of the main ones are the offers of free membership and the goals they give.

The free membership is something I find really odd. They want a lot of people to sign up, but they don't care if any of those people actually support them (like with dues money). That just looks like pretense to me, that they want to be able to pretend that a lot of individual poker players support them with what counts, money.

The goals is something else again. Their goals don't help online poker players. Even if they achieve those goals poker players will still not have an ability to fund poker accounts online. In fact, I think that if they achieve the goals individual poker players will be worse off. Their goals include a failure to support the WTO rulings about the Anigua law suit in International Court which actually support the interests of individual poker players. More than a failure to support, they are taking a position that actually is contrary to the findings of the WTO.

The WTO is saying the US government does not have the legal authority to regulate the internet, PPA is taking a position that the US government does have that legal authority.

So, I don't see any evidence that they actually represent the interests of you and me. I think that makes them a scam.

Click on the PPA tag to see previous posts on the subject.

Card Players supports the PPA position

Mean Gene has some nice comments on a suggested letter to your Congressman proposed by Card Player Magazine. The letter is terribly written and the position it takes is even worse.

Update. On a related not, Ed Miller shows really bad judgement by recomending PPA. The funny part about his post is that he's attracted by being able to join for free and that's one of the things that screams "scam" to me.

They just want numbers to be able to tout themselves as being influential. Numbers will help promote them but probably won't promote the cause. Lawmakers do care about voters, but few lawmakers are so stupid as to think that passing out free memberships represents influencing votes.

New leadership at PPA

The PPA is still heading down the road with the position that online poker is illegal but the government should treat it special and ignore it since it's a game of skill.

There are two alternative positions that they just reject outright.

1. Internet poker isn't illegal. That would be consistent with the findings of federal courts.

or

2. The United states doesn't have jurisdiction to regulate foriegn companies who do business on the Internet. That would be consistent with the WTO.

Those two alternatives don't contridict each other, you can logically take both positions. But taking the position that PPA takes rules out two strong positions that have been given support by both federal and international courts.

I don't know why PPA takes the position they do. The only possible reasons I can think of don't really imply many good things about PPA.

Antiga has been successful with prosecuting the US in the WTO. Although the US tends to ignore International Courts who rule agaisnt them, Antiga could make a valuable ally for poker players. PPA doesn't think so, they take a position against the progress that Antiga has made.

Promoter Linda Johnson has been carrying the banner for PPA as it's Chairman until recently. Linda has stepped down (she's still on the board) and they've turned to a failed politician from NY to serve as Chairman. Former 3 term Senator from New York, Alfonse D'Amato.

The Poker Blogs have been reporting the official press releases about it. Here.

Except for one sleazy stock deal, D'Amato doesn't seem to be much of a crook. I'm not sure what deal making talents he has though. When a Senator he was known as Sen. Pothole, it seems he did a good job of making the voters think he was looking out for them. Kind of like the old Cook County Machine.

I'll have to write more about D'Amato in a future post. He seems less than top notch to me, but I might be wrong.

PPA's tax filings

A commenter on the blog Running Good sent me a link to an old tax filing of PPA.

Any thoughts?javascript:void(0)
Publish

Bill and PPA

Bills Poker Blog has some comments on the PPA/Full Tilt postition on the legality of poker. For some reason he seems to support it.

I don't.

Here's the comment I left on his blog.

Yep, now they want to take the position that online poker is illegal.

Why in the world are they interested in taking that position?

PPA is a very suspect organization, which I've talked about in this series of posts.

I don't think online poker is illegal and I don't think players should support any organization like PPA which takes the position that it is.

Actually, I'm not sure the comment took.

The Poker Carveout

In my last post about the futility of the PPA proposed carveout one of the comments was

Drizztdj said...
Why wouldn't poker move over to the same payment processor as online horseracing does with an exemption?

I think at one time the online poker industry could have done that without a carveout.

But I think that most of the online poker industry really wanted poker to be considered illegal online to at least create the appearance of a barrier to entry. I'm not sure about that but I think that's at least partially true.

Today, I don't think so.

And, even if it did get a carveout and then convince banks it was okay to fund the poker sites (at this point I'm not so sure banks won't block them even if there is a carveout), it would create an implication in a statute that poker online was an illegal activity covered by the wire act. That would not be good in the long run.

One thing you might not be aware of is that banks have recently gotten multimillion dollar finds for money laundering for things clients do, not things they do. So they won't really want to climb on board real fast with a carveout because even without that new anti-gambling law they are at risk.

Right now the 5th circuit has ruled that it money is deposited out side the US and in a completely separate transaction that money is used to make a bet out side the US then the wire act doesn't apply.

A statute that says online poker is illegal but it's not illegal to fund accounts at online sites doesn't really help if you want to argue the position of the 5th circuit.

Right now the US doesn't want to push that issue with poker or other forms of online gambling other than sports betting.

If they can get it to the SC and get the ruling they expect from the authoritarian SC then they might move on to poker. The carve out suggesting by PPA helps them in that future move against online poker.\

I'm not sure why PPA wants to support the Justice Department attitude against online gambling and oppose the rulings of US appeals courts (none has ruled the wire act does apply to the internet, not one) and rulings of international courts.

But I do know that's the position PPA takes.

They don't deserve your trust. They have someones best interests in mind, but not yours.

Lou Krieger told me he doesn't understand why PPA won't respond to my emails. He says he doesn't understand, but of course he does. They don't want to answer any actual questions. They only want to talk to people who won't actually ask questions, but will give them publicity with softball interviews.