Online Poker Sites Aren’t Banks

This is something that I knew for quite some time, but it seems that many in the poker community didn’t take to heart. I completely understand why someone would want to have a nice bankroll on these online poker sites – playing at the best stakes possible, able to enter bigger tournaments, able to back some horses, etc. – but some of the horror stories that have come out about players having tens of thousands of dollars (at least) can be a bit disappointing. Still, it does make you wonder what these people were thinking.

In the case of affiliates, they perhaps used that money as a way of running their business. They potentially paid their employees through that (to be honest, I have worked for companies that paid across online sites) and, as such, it made sense. It also may have made sense in actually having the business’ money separated from personal funds – a business tenet that, it appears, the Full Tilt Poker leadership didn’t learn in business school.

For the people with large amounts of cash on the sites, perhaps it was a way to play at the biggest stakes possible. But it could also have been something more nefarious, a way to avoid paying taxes on their play by keeping the money “safely” away from their national government’s coffers. If that was the logic, then there’s little that I feel for those people. But overall, the lesson that an online poker site isn’t a bank seems to be something that many people missed.

The Hero(es) Take The Fall

We’ve seen this example in several of the online poker fiascos over the past few years. For his involvement in the Super-User scandal, a former World Champion – who, like the villain in the Harry Potter novels, now goes by “He Who Will Not Be Named” – was disgraced to the point that he cannot show his face in a Las Vegas poker room (for the most part). The longtime sponsored pros of UB, Phil Hellmuth and Annie Duke, to this day still get chastised for their involvement with the company.

Now the stable of pros at Full Tilt Poker have the scarlet letters of “FTP” pinned to their chests. Furthermore, two of them, Howard Lederer and Chris “Jesus” Ferguson, are facing not only the potential for the loss of everything they own but also could face criminal charges for their alleged actions with the company (some of the venom that people have for especially these two men on many poker message boards is vitriolic, but expected in a way).

As someone who has had the opportunity to talk to professional poker players and know many of them, it is difficult to see someone whose skills you admired – heck, even thought them to be good people – getting slammed in such a manner. While it is perfectly right for people to accuse, blame and seek justice, it is still disappointing to see people that you respect and their corresponding fall from grace.

U. S. Online Poker – A Long Time To Wait

Although there are a smattering of sites that still accept American action, it is almost Pollyanna-ish to believe that we will be returning to the pre-“Black Friday” days of online poker anytime soon. Even though several major players in the industry are now calling for a regulated online poker scene in America, the current state of political affairs in this country do not bode well for anything to happen anytime soon.

We currently have a government that views a $750 billion bailout of the banking industry as acceptable, but has a hard time deciding that $3.5 billion for people that have lost their homes and businesses in the various natural disasters that have affected this country is worthwhile. The online poker industry faces opponents that, perhaps driven by their particular convictions, view our game as something that is resplendent with cheats, crooks and ne’er do wells that prey on “good people.” The FTP scandal has given them the ammunition that they need.

While many are looking at the “super committee” as a potential savior, it isn’t going to happen. We know that there is the potential for tens of billions of dollars in revenues and the creation of jobs if online poker was regulated in the United States, but it just isn’t enough when the committee is looking at $1.5 TRILLION in cuts and/or revenue increases. We lack the firepower to make a huge difference in the grand scheme. Add in the fact that it is a bipartisan group, evenly divided between Republicans and Democrats, and the situation seems set up for failure.

Then there are the upcoming 2012 elections. After all the bad press that online poker has received in the past few years, no one in Congress or the Obama administration is going to stick their neck out on what could be a divisive issue (note Massachusetts Representative Barney Frank’s recent return of campaign contributions from the online gaming industry recently). Furthermore, if the 2012 elections bring in a Republican majority in the Congress – or even a change in the White House – don’t expect them to jump up and suddenly change their decade-long tune against online gaming. Even if the Democrats prevail, it wouldn’t be a prime issue for them to address.

With this said, it could be a long wait before we see anything remotely resembling regulation of the online poker industry in the United States. I believe myself that, due to the FTP events, we may be looking at the minimum of five years down the road to catch up with the rest of the world and potentially as much as another decade.

These are just a few things that I have learned over the long five months that the Full Tilt Poker saga has played out. What are some of the things that you’ve learned?