Online Players React To The FBI's Poker Crackdown

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Business Insider was able to talk in-depth with three online poker players that had accounts with at least one of the websites that got shutdown by the FBI this past Friday.We asked the players — who operate at varying levels of experience and stakes — if they had any expectation of something like this happening, if they had any money tied up within the system that they could not currently access, any stories they have heard any harrowing tales from other online poker players.

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“Kyle” is a professional poker player who plays most of his poker online. It’s a significant portion of his living, and he has gone on to the World Series of Poker a few times.

Which online poker sites were you signed up with?

I have accounts with Poker Stars and Full Tilt. I joined up with Poker Stars in late 2005, and with Full Tilt in 2006.

Being a professional player, you must know at least a few players that depend on online poker to earn a living.

Oh, no question! This is affecting a lot of people. Some players only do online play, save for the World Series of Poker, and those players may not have a way to get there now since a lot of what they earned is stuck.

Do you know the size or scope of how much money some players have stuck in limbo?

I actually consider myself fortunate in this case, because I had recently cashed out before all of this hit the fan. There’s probably $25-30K of my money between both sites that I just can’t get to, but I think I’ll be able 
to eventually. It’s not an amount that will ruin me, but I’d be lying if I said that amount didn’t matter.

As for other players, I obviously can’t name names, but there are some players who have well over $1,000,000 tied up.

While we don’t really know what’s going to happen with our money, PokerStars and Full Tilt continue to tell us that our money is safe. I’m not sure if the Department of Justice is after our money or just the companies’ money, but if the government is trying to seize US players’ funds, I will be outraged. It would be blatantly stealing hard-earned money out of our pockets.

What’s your personal experience like dealing with these poker websites?

I’ve had concerns with how they go about their business sometimes. For example, Full Tilt has had problems with bank transactions. Sometimes necessary transfers just wouldn’t work, the checks that they would write you would bounce every now and then. When one of their checks bounced, they’d apologise and give you a bonus, but that would sometimes take a while. They had so many banking issues, though, and I found it a little shady.

Have you ever questioned the legality of online poker?

I had minimal concerns, even after the passing of the UIGEA (Unlawful Internet Gambling Enforcement Act). Poker seemed to be within this legal grey area. They clearly found some loopholes within the legislation and didn’t really miss a beat, but there was some initial scrambling and panic. The websites had to get a new system together pretty quickly and I thought they had done so fairly successfully.

Poker is a game that requires critical thinking, an advanced understanding in mathematics, and the ability to think clearly under pressure. It’s easy to see poker is not a game entirely based on luck, which I think is the biggest problem we have with lawmakers and how it’s classified in terms of legality today. Poker needs to be deemed a game of skill, or at least differentiated from something like slot machines or roulette.

And while online poker is banned, betting on horse racing over the internet is legal according to the UIGEA. It really makes you think, “Who is actually writing these laws?”

There was no telling that something like this was going to happen, even though I know it has happened in the past. In 2009, the feds seized around $30 million, but these sites make one to two million a day, and more on tournament days, so $30 million is pocket change to them.

Did you suspect of anything fishy in the days leading up to the FBI’s seizure?

In hindsight, for sure. Full Tilt has a “double guarantees week” tournament series that they usually do once a year, but sometimes a little less than that. The normal guarantees for tournaments during this week are doubled. So, for example, if the tournament prize pool was normally $25,000,double guarantees week would make it $50,000.

This past month, though, Full Tilt had two weeks of these tournaments, and they were also multi-entry tournaments, which meant players could buy-in up to 4 to 6 times for each tournament, paying rake on every entry. Full Tilt would make a killing on these tournaments since they make so much rake on the buy-ins, and they must have seen something coming if they decided to do two weeks of these promotions in a single month. Full Tilt just made a lot of money from players, and it’s probably because they had warning that some trouble was headed their way.

It sounds like Full Tilt has given you more problems than Poker Stars.

Poker Stars is great. They are much more responsive. Their tournaments are actually bigger guarantees because they have a larger player base, but since Friday, they’ve all gotten a lot smaller. I think U.S. players made up about 25% of their customer base. On May 8th, their SCOOP (Spring Championship of Online Poker) tournament series was going to start, but I am not sure if that’s going to change now. We’ll probably hear about that soon.

How often are guarantees not met or are just lower than typically expected?

More so recently; the guarantees have all changed. PokerStars has a weekly thing called the Sunday Million, which has a guarantee of $1.5 million. It’s now down to $1 million. Full Tilt’s F-Top Main Event multi-entry tournament has had guarantees of $3 million in the past. That’s also down to $1 million.  

Do you think online poker is finished?

It’s tough to say they’re finished, as they have always found a way around things like this. There’s not a ton of overhead in the maintenance and creation of these websites, either. You know those online music sharing programs? It’s the same sort of thing. The government could shut down a lot of those websites or programs, but even more will pop up. It’s impossible to shut them all down. Plus, the penalties for running websites like this are fairly minimal. Most offenses are five years at most, and the fines are around $250,000, which is practically no money to the people who run these websites.

And even still, though consumer confidence is very low right now, some websites are still accepting memberships.

I do, however, think U.S. customers will be shut out for a while. It’s really sad when we are called the freest country in the world, yet we are one of the few countries who have banned internet poker. France is the only other one I know of…but they didn’t ban it, they just have a closed market to French players.

Are we going to see any residual affects from this online shutdown trickling down to more well-known and prominent poker events such as the World Series of Poker?

The fields at the World Series are going to be way down. Online gambling sites give out quite a bit of seats at the World Series, and the bankrolling that some of these online players provide is really important to the tournament. The jackpot could be down since the people who are supposed to be bankrolling it have their money stuck in limbo. Less money coming in, less money coming out.

Matthew “Spuds” Mackenzie is a graduate student that has played online poker on and off for the past five years.

Which online poker sites are you signed up with?

Just Full Tilt Poker. I signed up with them before my senior year of high school.

So you were under 18 when you started playing poker online?

Yeah, but Full Tilt had a method of playing that let you use fake money, so the age didn’t matter apparently. You could earn a certain amount of fake money to enter into sweepstakes where you could potentially win prizes, or even real money.

Have you ever questioned the legality of online poker?

I would have thought something like this would have happened earlier, honestly. I knew that gambling outside of any regulated areas was illegal, but millions of people play online poker so that sort of blinded you to it. I found it weird that you could somehow not play roulette, or any other games online, but we could somehow make poker work.

Do you have any money tied up with Full Tilt right now?

Thankfully, I don’t, but I know I am one of the lucky ones.

Did you suffer any negative consequences of playing too much online poker?

It affected my grades a little bit. I would often just play poker online instead of studying, but I had netted a nice chunk of change doing it, so it is what it is. I actually don’t play all that much any more since I just don’t have enough time with my graduate work.

George Ross is a regular player of online poker and has aspirations of possibly making it further up the poker world’s ladder.

Which online poker sites are you signed up with?

Full Tilt and Poker Stars, since they were the two must reputable sites. I started playing there while I was in high school.

Did you see the FBI’s seize coming at all?

I didn’t think it was inevitable. The UIGEA had caused some panic, but that had calmed down and we forgot about it mostly. Online poker just seemed to be part of this implied “grey area.” All the UIGEA really seemed to do was make it difficult to move your money around, but it wasn’t impossible. They obviously found ways around all that. I guess that just didn’t last.

I was never really worried about the general legality of online poker. I stayed informed about the happenings. I am a member of the Poker Players Alliance (PPA) and am able to keep up with the legal developments through their newsletters.

The UIGA, according to some, is legislation designed to attack mostly just online poker players. What is your opinion on that?

I think there’s some truth to that. It may be in the Government’s best interest to regulate it. For starters, every U.S. President in our history has played poker before. (Editors note: [Citation needed])It’s a game of skill that people really enjoy playing. We get a lot of joy out of it, and most of us are not as compulsory as one may think. I resent that online poker is just shut out and labelled as “criminal activity.” It’s like the marijuana laws in my opinion.

There’s billions of dollars just sitting out there in the online poker world and if the U.S. Government were to regulate it, we could really help out this debt that we all seem so concerned with. Plus, it would help out the websites themselves since they’d seem more legit and it would attract more players knowing that what they were doing is totally legal and totally safe. They aren’t likely to do it soon since the “old guard” in Washington seems to have some sort of issue with poker and stopping these websites, but it could happen down the line.

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