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The Online Poker Crackdown

The United States cracks down on online poker. Billions in the pot. We look at a gambling world on the move.

Jeff Markley, an online media executive, peruses Full Tilt, Bodog and Poker Stars online on three screens in his office in Atlanta, in October of 2006. (AP)

Jeff Markley, an online media executive, peruses Full Tilt, Bodog and Poker Stars online on three screens in his office in Atlanta, in October of 2006. (AP)

Online poker blew up big in the United States in the last half dozen years. Huge. Millions of players. Billions in the pot.

Little players, and mid-sized, and big dogs — the sharks — who raked in very handsomely at the top of the heap. Lots of buzz and heat and money.

Then, on April 15, it all came crashing down. Busted. Federal authorities moved in, seized websites, froze assets and brought charges: bank fraud, money laundering, online gambling.

Shocked, shocked!, there was gambling — poker — in this arena.

This hour On Point: the big flame-out and fate of online poker.

- Tom Ashbrook


Vin Narayanan, managing editor at the Casino City Times, where he’s been covering online poker and the DOJ crackdown.

Jeffrey Standen, law professor at Willamette University, where he teaches sports and gaming law. He blogs about the legal issues behind sports, gaming, and gambling at “The Sports Law Professor.

Scott Dorin, professional poker player who has been playing for a living since graduating college in 2008.

As the Justice Department investigates online gaming, many poker sites have freezed deposits. Full Tilt Poker has this message on its homepage:

Full Tilt

Along with the Department of Justice logos, some of the text reads:

“Full Tilt Poker has always maintained the highest levels of integrity and compliance with the law. Due to recent events Full Tilt Poker is unable to accept ‘Real Money’ play from customers located in the United States. However, please know that your funds are safe and secure we are working to resolve the distribution of these funds.”

Please follow our community rules when engaging in comment discussion on this site.
  • Gary

    Poker is not a game of skill. Yes, it involves skill, but in the short-run, it is a game of luck. Football has luck involved, but that doesn’t make it a game of luck. The mere presence of some degree of skill does not make poker “a game of skill.” The outcome is predominately determined by luck, so that you have to play thousands of hands just to see the effects of the small degree of skill involved.

    • Chris

      @4d08e771e81ebf9ebb8834b5ccfca228:disqus – Poker is a game of skill. How much an individual player wins or loses is predominantly determined by that player’s skill. Whether or not you win or lose any single hand may have some luck involved, but how much you win (or equivalently, how much you avoid losing) is affected by your skill.

      One simple test you can use to see that it is a skill game is if you can intentionally lose:

      – roulette: once you place your bet, you have no way to affect the outcome, and you cannot intentionally lose your bet

      – poker: there are multiple opportunities for you to intentionally lose the hand (you can fold)

      Having said all that, all of this missing the larger point, which is that a government ‘prohibition’ of poker is a violation of one of the core principles upon which this country was founded: personal freedom. It is not the job of the government to tell me what I can or cannot do, as long as I’m not directly hurting someone else. Yes, there are some people who have problems playing poker, but there should not be a broad proscription of an activity among consenting adults just because a few cannot control themselves. Otherwise, we would still be unable to purchase and consume alcohol.

      • Tcabral24

        there are more people hurt as a result of alcohol and cigarettes consumption than there are from the game of poker, specially online poker where there is a set limit of how much money you can deposit into your online account.

      • kcolton2009

        @Chris:disqus  There is something else involved besides your personal freedom. When you, or I, make deposits to accounts overseas,
        that money is taken out of the U.S economy. Most of that money
        will not come back here. Maybe yours or mine might come back, but for the most part what is lost winds up in other accounts that belong to people in other countrys. If any of us shows a profit, how much of that is reported to the IRS? Not so much I’d wager.

        • phllllllllllllllllllllp

           i fail to understand your point!  If the U.S. gov would regulate and tax, then the benefits would serve us all!  Prohibition has NEVER worked!

        • http://pulse.yahoo.com/_5WENUGL4H4RBW2PAT3M7V4FXVI Wilson

          The only way for the IRS to not know about poker earnings is to have it turned directly into cash and very very few players were able to come up with methods of doing this.  Then, how much cash are you really willing to keep under the mattress?  How many big purchases are you able to buy with pure cash anyway?  You see my point, I’m sure.

          No, most players simply were withdrawing their surplus earnings straight into their bank accounts which Uncle Sam knew about and were reporting them come April every year.

          Also, you need to realize that about 2/3s of the players online weren’t American and that basically if you were a winning player, you were bringing foreign money into America.

    • http://pulse.yahoo.com/_5WENUGL4H4RBW2PAT3M7V4FXVI Wilson

      It’s hilarious how wrong you are. While poker has its moments where there is essentially a “coinflip”, people who don’t play the game fail to recognize that the best hand doesn’t always win. Most hands that are played don’t get to the “showdown” where both players reveal their cards and the best hand wins.

      The mind games that go on in poker are incredibly complex. You are constantly trying to keep up on the past hands against your opponent, interpreting their playing style, trying to understand how you are coming across to them and using reverse psychology. But are they expecting the reverse psychology?
      If you truly think poker isn’t a game of skill, I highly encourage you to play on Full Tilt for play chips (because last I checked that’s still allowed). See how many thousands of play chips you go through before you’re convinced because I guarantee you won’t be able to keep up for quite some time :)

  • Joshua Hendrickson

    I think gambling is a stupid waste of time and money, but I certainly don’t support making it illegal.

  • Yar

    We can only have one unregulated gambling market, and that belongs to Wall Street. If poker wants to get in on the game they need to step up campaign contributions. Of course we could kill both markets by simply teaching our children math.

  • NrthOfTheBorder

    My image of poker was that of my father and his cronies, smoking cigars, around a table in the garage on Saturday night.

    Is it just me, or have we in the meantime, become a nation of gamblers? Is there now a more pervasive and insidious gamblers mentality afoot – informing everything from tax policy to how we spend our retirement?

  • Cory

    I am an unapolagetic big government liberal. This is just damned silly! Let people blow their money and time on poker, pot, or antique hummels if they like. People really need these diversions to make life a little enjoyable. No jobs, healthcare, political voice, retirement… Let folks play their games without government meddling or attempts at making it into a revenue stream!

  • Diamond

    @ Gary, poker and football are more alike than you think. If you take two football teams and they play 10 games against each other, is the better team going to win all ten games? Chances are no. There will be fluke plays/injuries etc. They will win most the most games, say 8 out of 10, but they will lose occasionally. Poker is much the same. Good players put them self into situations where statistically they believed they are the favorite. Sure they are not going to win every time, but to make money at the game you don’t have to.

    • Tcabral24

      to add to your comment, maybe we should try to make football illegal because money is involved. Where is the money coming from ?

      All the FANs, right? who is keeping most of the money? a small group of people, right? this is ridiculous. perhaps we humans shouldn’t live at all, because it doesn’t matter what action someone takes it always bothers someone else

  • Chris

    Some key points:

    - The Justice Department believes that online poker violates the Wire Act; however, there is plenty of case law that has determined that the Wire Act does NOT apply to Internet poker (see theppa.org for references)

    - Currently, online poker is NOT illegal at the federal level, and is illegal in only one state (Washington)

    - Online poker is specifically legal in the District of Columbia

    - The Unlawful Internet Gambling Enforcement Act (UIGEA) (2006) [rider to a port security bill] prohibits banks from processing transactions FROM the banks TO ‘illegal gambling’ sites; however, it did not change the legality of any kind of gambling

    - Playing online poker should not be a crime; it is not the government’s job to tell me what I can or cannot do with my own money in my home

    • Cory

      - Playing online poker should not be a crime; it is not the government’s job to tell me what I can or cannot do with my own money in my home

      You are just plain right.

  • Anonymous

    I read somewhere that everyone is guilty of some kind of sin, perhaps if we just prohibit people then we could make the world a sin free place?

    • Cory

      Ever see the movie “12 Monkeys”?

  • metrowest

    Online poker is very destructive to families. Addicts ignore family obligations, deplete bank accounts and isolate themselves.

    • Cory

      So is porn, chat rooms, religious fanatiscism, beer/alchohol and a myriad of other things that give life color. We have to let people have their vices, even if some go overboard.

    • Nick

      Isn’t that an issue for families to resolve? What right does the government have to intrude? Is it taking lessons from China? Our big brother just keeps getting bigger and bigger.

    • Debbie R.

      The problem with gambling is that it is an addictive behavior. For every person who “makes a living” at poker, how many people are losing money repeatedly, to their own and their families’ detriment? Nate Silver wrote about how he used to make money playing poker, but stopped when the level of people playing got too good (i.e., once their were fewer easy targets). Poker playing as a social event is one thing and has positive aspects. Online poker allows people to avoid realizing the costs of their actions.

      At the very least, perhaps we can require online poker sites to keep track of who is losing lots of money and send them alerts or limit how often they can play. But, then of course, that would ruin everything.

      • ThresherK

        Don’t online poker sites already limit how much players can lose? It’s called “every cent they can get”.

        Anyone who picks stocks or pork-bellies will repeat the first thing they are told by a responsible investment advice firm: Only invest the amount you are willing to lose. There is no intersection betweeen proper, accepted limiting behaviou (like the friend who’ll tell you “you’ve had enough”) and automated online gambling. It’s counter-indicated, even.

        (Not that the in-person casinos are paragons, either, but that’s not the subject today.)

        And if Nate Silver can’t make a living playing poker, wow. That’s a warning right there.

        • Tcabral24

          It is true, and I like it

      • Tcabral24

        In this case we should make a lot of things illegal for everybody such as smoking cigarettes, drinking alcohol etc., maybe we shut down all casinos because there is a long line of people that go to casinos almost every day to gamble, and we know not all of them are coming home winners, how about the state lotteries and scratch tickets, there are a whole lot of people addicted to those, better yet we should shut down all states sponsored bingo games run by churches, in fact I know hundreds of people in my town that play bingo 2, 3 times a week sometimes more, every single week, and that is true in every community.

    • Jim

      Where is the proof your premise? Addicts of anything can be personally or publicly destructive. Online poker can be a vehicle for this kind of behaviour, however it is NOT the cause of the behaviour. An addictive behaviour will still manifest itself with or without whatever vehicle they choose for that personal destruction.

      So who are you to say that, to stop a few people that are going to destroy themselves anyway with or without poker should ruin the fun that responsible people can have enjoying a social game? Why should you decide what I do?

    • Anonymous

      Then talk to them. Don’t limit the behavior of the many for the stupidity of the few.

    • Tcabral24

      It is just like everything else in life. If you have a sports FAN in the family that likes to watch all games on tv or live when ever they’re on, isn’t that an addiction and distraction to families?

  • Kathy

    The government should find more important things to spend it’s time on than preventing me from playing poker. I’ve stretched $25 over a year of playing on 2 cent and nickel tables on Full Tilt. This isn’t hurt anyone.

  • Anonymous

    I know a few online poker players. Some of them make a living doing so. Just as your guests have said, many were making 100-200k/year. I also know school teachers who would make 5-10k a weekend. I’ve heard that many of them hide their earnings from the IRS and have been doing so for many years usually in the form of off shore accounts.

    If they are going after online poker sites, will they be going after some of the players too?
    And which players?

  • Paul

    DOJ should be spending its time and resourses to find a way to prosecute the greedy monsters on Wall Street who brought this economy to its knees. On-line poker??? Give me a break.

  • fran

    A general comment. Mr. Ashbrook, please allow your guests to talk; sometimes you seem to need to hurry things along and give the information we are listening to your guest to give us. At times I feel like you only have the guest on to reflect what you think or have learned from reading the guest’s report or book or whatever.

  • Anna

    Hopefully now there will be more money for food for my children, since their mother and her parents won’t be wasting it on online gambling anymore.

    • Tcabral24

      what about the millions of people who spend hundreds of dollars a week or a day purchasing alcohol, cigarettes and play bingo, state lotteries ( example: Megamillions, Powerball and scratch tickets ).

  • Anna

    are all these players paying taxes?

    • http://pulse.yahoo.com/_5WENUGL4H4RBW2PAT3M7V4FXVI Wilson

      For the most part, yes. The highest of the high rollers have their methods of having portions of their money turned into cash, but for the rest of us, the money is deposited in your bank account and Uncle Sam knows about it.

  • http://gregorycamp.wordpress.com/ Greg Camp

    Treat the money won as income, and tax it appropriately. Otherwise, you pays your money, and you rides the ride.

  • Bryan Lowder

    All I hear about is how much money people make from playing online poker. I thought poker was a zero-sum game: for every big winner, there are a bunch of losers. Is online poker different? Aren’t we guilty of glorifying the whole thing by focusing only on the winners?

    • Tcabral24

      So are the lotteries across the country. Why they still exist?

  • Rob

    Why not crack down on the online gambling system called the stock exchange. After the public companies receive payment for their shares, all the buying and selling is just…gambling.

  • Will Churchill

    Listening to these guys complain that the crackdown has hurt their ability to make a living is pathetic. A gambler is bound to lose, or haven’t they heard? Gambling contributes nothing positive to the culture, and gambling professionally is a lazy way to make a living. If want to count cards, they should go be math teachers.

    • http://gregorycamp.wordpress.com/ Greg Camp

      We don’t pay math teachers enough, at least in elementary and secondary schools, to attract the best mathematicians.

    • mymftw

      lol ur a idiot

  • Andrea

    Should we really be concerned with “professional poker players?” Such people contribute nothing to society.

    • http://gregorycamp.wordpress.com/ Greg Camp

      The same could be said about Wall Street executives or professional basketball players. I don’t mind regulation of the economy, but I object to shutting down any portion of it that is a matter of choice.

    • bcooke

      Such a dumb statement. People should have the right to do what they want to do with their own time/money. There are so many professions that you could argue contribute nothing.

    • Jim

      What is your definition of “contribution.” Please define that. Otherwise you’re in danger of equivocating most people proffesions as “nothing contributors”.

  • God69

    nobody contributes anything to society

  • Sue

    Just an observation. All the calls on autism were from women. All the poker ones from men.

  • ANE

    There was some conversation about how tracking and controling the activities of people with gambling addictions is one of the challenges… we don’t track and control alcoholic’s purchasing behavior? What is the difference? Why is it a challenge or why aren’t we focused on controlling other addicts?

  • zack

    The role of government is to work with companies to keep players from evading taxes, playing underage, and getting addicted. It is not the role of the government to outlaw this activity!

    Create a licensed industry that is safe and responsible!

  • bcooke

    Some of these comments show just how ignorant the general population is about poker. The masses are so dumb, and that’s why online poker is profitable for pros in the first place. So please do not listen to these people’s erroneous claims and opinions. Counting cards? That’s blackjack. Poker is a so much more than that.. and the great ones are anything but lazy. Those of us who have spent the time/energy it takes to become a top player understand this. You compete against other players, not against the house as in other casino games. Therefore if you’re skilled enough at the game (better than the other players) you will profit in the long term. The good players win while the bad ones lose, and the house putting on the games profit too through rake. It’s not just betting on black or red.

    • Cory

      Can’t recommed beginning an argument by telling those you wish to persuade that they are all dumb.

      • twenty-niner

        But he’s right.

  • anon

    One point of correction on the show with respect to the state-by-state exception under the 2006 federal statute. The exception says people can play if it’s legal in the state and also legal where the online operator is located (Costa Rica or wherever). So if it’s legal in your state, you could play with people all around the world on an offshore server. One of the guests (Vin) said you could only play with people within your state. Not true.

  • Lestat138

    State or Not…. I feel Poker should be available in ALL states regardless of how the state feels….. People playing poker online are not hurting ANYONE and its absurd that our country is doing this to Us. I fucking HATE the USA and im thinking of moving out of the country. I fucking HATE THIS COUNTRY. FUCK YOU USA ILL PISS ON YOUR FLAG AND WHIP UP MY SHIT WITH IT!!!

    • Brett

      I believe you’re looking for a Yahoo™ forum, there.

    • Cory

      Where you thinking of moving to?

  • bob23

    Saying poker players contribute nothing to society is completely wrong. Ive been a fulltime poker player for a long time and I actively donate some of my free time by volunteering for habitat for humanity and work for a youth sports program a few hours a week. There are also countless fundraising poker tournaments. Barry Greenstein alone has donated around 3 million dollars to various charities.

    • Hessni06

      Anyone who pays taxes contributes to society… assuming you pay your taxes

  • Ajnaran929

    What’s the name of the intro instrumental music. Anyone know? Soothing, I find it (Yoda voice)! Thanks!

  • Michael

    It’s silly for the government to try and ban/stop online gambling, esp when the person is over 18. If one can go to war and die for this country they should be able to gamble.

  • Curtiss

    I play online for fun to help improve my skills for when i play in real tournaments. I never played for real cash because i never felt secure. However, if the economy wasn’t bad would DOJ be gong for these groups?

  • http://pulse.yahoo.com/_5WENUGL4H4RBW2PAT3M7V4FXVI Wilson

    Online poker being illegal makes absolutely no sense. I do understand that because these sites were likely operating in an illegal manner, they very well might have to face the consequences. But the laws in the first place are hypocritical. America is a country that supports gambling in many ways and it is this gambling that creates a huge amount of tax revenue.

    I’m of course referring to the the lottery (otherwise known as the tax on the poor). In the online poker world, we frown (frowned?) upon mindless gambling (unless its a humorous/interesting prop bet lol) and refer to people who throw away money in this manner as degenerates…and there is honestly no more senseless way to throw away money than the lottery. There is zero skill and an astronomically slim chance of winning, and yet the state love the existence of the lottery. Why? Because it produces an absurdly huge revenue for the state. Of course this is at the cost of countless low income people who can’t help but play in hopes of winning.

    Then there’s Vegas. Every year Americans spend billions of dollars on slots…again, mindless, idiotic gambling where there is zero chance of winding up on top in the long term and yet the government allows it. Here the state makes less (I’m guessing here, but am probably right since I believe the big jackpots are the only ones that get taxed).

    So the government isn’t keeping online gambling illegal to protect us. They harbor and support plenty of gambling outlets…just as long as they keep the tax dollars flowing.

    So, in a long winded manner, I’ve established that gambling is in fact socially accepted in our glorious country. So why would skilled gambling be illegal online? Legislation needs to be passed that allows for online gambling. We allow it in countless casinos, poker rooms, race tracks, keno…things, and in every state’s lottery. It is senseless that talented online poker players be denied this basic right.

    Tax it and regulate it. (Where have I heard that before?)

  • Dkfjaskl

    It is my money, I should be able to do with it what I pleased. Go away please government.

  • Togglescratch

    I think online poker should be legal. However, I do not feel bad for the pro players who were making a living online and are now scrambling. Their occupation has ZERO social utility. Get a real skill that adds something to society. There are too many people who make a living doing something that is a net zero or even a net loss for society who need to be taken down a notch, including many on Wall Street, certain types of lawyers, lobbyists, and even online poker players.

    • http://pulse.yahoo.com/_5WENUGL4H4RBW2PAT3M7V4FXVI Wilson

      Most jobs don’t add to society, it’s usually in peoples free time where they contribute.  In contrast, however, many jobs take away from society.  Most of the super wealthy have exploited society in one way or another to get there.  Whether it is companies in the health care business who exploit sick people, billionaire businesses who underpay and overwork the people lowest on the totem pole, or it is (as I learned on NPR today) for-profit universities who put under privileged students into lifelong debt at the cost of tax payers.

      Poker players may not contribute to society when playing, but they aren’t hurting anybody (except their opponent’s bankroll :P).  It also gives the players the ability (ideally) to make more money than they would otherwise and more free time to pursue other interests.

      Also, you are failing to realize that most poker players have jobs!  It’s just a hobby for most where they either slowly lose cash, gain minuscule amounts or just break even.

      Then when it comes to the people raking in the huge bucks, more often than not they’re making money that they never would have otherwise come into and thus it allows them to raise a family in better circumstances.  You can’t argue that isn’t a good thing.

    • Be

      Agreed that playing poker doesn’t add to society.  But thats why we should legalize it and TAX it so that it does add to society.  Just like we should be regulating and TAXING Wallstreet.  Over half of Wall Street Transactions are mini-second transactions.  It is a Gaming of the systems, they should be TAXED.  Wallstreet was not created to be gamed and to do mini-second automatic computer transactions. It as build to fund and invest in real businesses.  IF people put in long term investments in Wallstreet they shouldn’t be taxed, but all this mini-auto-second transactions should be taxed!

    • Orangeheadrocks

      Yeah, and all those useless professional  athletes. Get rid of em’ I say.

  • Zeno

    No online gambling. So they are closing down Wall St.

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  • Johnfulk

    Well I don’t know about other people’s contributions but I participated in several tournaments where half of the entry fee went for Haiti releif and also Japan, plus there are thousands of other charity event each year, so pay attention and you will learn that poker players who choose to, do indeed make a contribution to society..!!!! John

  • Captainmike8614

    the notice above is not the one shown on FTP. The one they are showing cites their inability to refund your money.This was the original message. Has it changed? 

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  • Rich


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