The feds fold online poker

I got dealt some pretty bad hands in the last few days by forces far out of my control. I awoke April 15 to find that the feds had indicted 11 executives on multiple felony charges, including bank fraud and money laundering, at the three top sites in America’s online poker market and seized their Web domains.

If you logged on to Absolute Poker, Full Tilt Poker or PokerStars, you got to look at the shiny logo of the FBI. I like to play the 50-cent minimum, no-limit game on Full Tilt, and that’s what I saw that Friday instead of direct access to the $216.05 that was in my now-frozen online account.

No sooner than Monday morning comes around and Standard & Poor’s downgrades the U.S. debt outlook, the Dow plummets 140 points and boom, I’m down another six or seven thousand out of my stock-based retirement accounts.

Where can a sucker get an even break nowadays?


Certainly not from the Obama administration’s Department of Justice, with what can only be called this asinine clampdown on online poker. “Donkey” is the common epithet branded on the worst player at any poker table and, in this game, that seems to be the feds.

No one knows for sure how many Americans play online poker for money, but most reliable estimates are about 10 million. What we do know is that last year our fellow citizens, myself included, wagered a whopping $16 billion on the sites now under attack. That’s more than Americans spend going to the movies.

Only burro-minded pols would not figure out that with that kind of money on the table and that kind of mass popularity, the logical thing to do would be to fully legalize online poker, regulate it and tax it — the same way we do with brick-and mortar-casinos. Or, if you prefer, as we do with alcohol.

Rep. Barney Frank (D-Mass.) has been leading the charge to do just that, and after these indictments, he told the Hill newspaper that the crackdown was “an incredible waste of resources.” And he chided the administration for “protecting the public from the scourge of inside straights.”


Well, no player enjoys seeing his or her pocket aces cracked by a donkey — indeed, drawing successfully to make that miracle straight. But we’re willing to play the odds and take our chances. It’s our money, not the Justice Department’s.

I am not about to defend the specific crimes alleged in the indictments, which boil down to site operators allegedly setting up front companies so that Americans could bypass absurd legal barriers to transfer their money back and forth to the sites, which are based overseas.

But this financial monkey business was made inevitable in 2006 when Congress passed and President George W. Bush signed a measure that did not exactly make online poker illegal, but rather outlawed U.S. financial institutions from processing online poker deposits and withdrawals.

For the last five years, players and site operators have found myriad workarounds (good poker players are nothing if not clever), and some of the site operators may have been a little too creative.


It’s not a defense that’s going to work in court, but the money-laundering schemes alleged in the federal charges were as predictable an outcome of that 2006 law and the federal mismanagement of online poker as Al Capone was the inevitable product of Prohibition.

And just like Prohibition, this clampdown, which took down the Big 3 of the American online poker market, cannot and will not stand. Either the poker community will find one more workaround or, heaven forbid, the U.S. government will see the light and use this incident to finally get on with legalizing — and cashing in on — a mainstream pastime much more popular than either political party. (How many Americans spend nearly as many hours in front of their laptops clicking through the sites of the RNC and DNC as they do sitting in a Texas hold ‘em game?)

Indeed, we players even have a formal lobby, the 1.2-million-member Poker Players Alliance, headed by former Republican Sen. Alfonse D’Amato of New York (online poker being the only issue I’ve ever agreed on with former Senator Pothole).

I guarantee you we are not about to fold. Poker is a game of nerve, and all the feds have done is raised the stakes, they haven’t swept the table.


There is, of course, a compelling counterargument to be made against online poker.

University of Illinois professor John W. Kindt told the Christian Science Monitor last week that online betting was “the crack cocaine of gambling, putting it in every living room, on every school desk and work desk, and on every iPhone and BlackBerry.”

I know what he means. When I saw the Dow tanking Monday morn, I almost wore my fingertips to the bone, using my iPhone to frantically transfer my online stock accounts back and forth trying to offset a faceless house that was handing me a much worse beating than any I had ever suffered from a donkey’s inside straight draw on Full Tilt.

Marc Cooper is a journalism professor and director of Annenberg Digital News at the USC Annenberg School for Communication and Journalism. He is the author of “The Last Honest Place in America: Paradise and Perdition in the New Las Vegas.”