The Poker Chronicles

Just a note on Click2Pay. I've been trying to call them since Friday and have gotten the message "Call Rejected" everytime. I called Cingular customer service and was told the number is no longer in operation. Whenever I try to log into my accout, I get a message that my e-mail is not registered or my account is locked (I've been using them for over two years and WAS in good standing). I called UltimateBet Saturday the 20th and when I asked about Click2Pay, was told with no hesitation that they were out of business.

I did open an ATMOnline account through Ultimate and got a call back within an hour to verify information. Of course now that I posted that it will be closed on Monday.

As an aside, how is it that Doyle Brunson hasn't been arrested yet? His face and "personal guarantee" to U.S. players are the first thing you see (as of about 3 weeks ago) when you open Doyles Room.

An update-

Just went to UltimateBet to deposit using ATMOnline (which I just setup yesterday) and got this:

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ATM Online is currently not taking any deposits right now. Please email mysupport@myatmonline.com to have any of your questions resolved. We will get back to you with any issue regarding a previous deposit. You may also continue to withdraw any of your balance in the withdraw section.

Anybody who has done a Rapid Collect (Moneygram deposit) or an EMT will be contacted directly today.

We will post an update in the near future.

Regards,

Management
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The end is near.

Two things. First, I talked to Click2Pay support literally 5 hours ago. Their number works fine. Their support is bad because they are overwhelmed, or maybe because it's always bad. Whoever told you that at Ultimate Bet was flat out wrong. Try giving it a call through someone other than Cingular if that problem persists, though I can't imagine it has anything to do with them.

Second, wtf is atmonline? The end of them is aparently near, but I never even knew they had a beginning. This is undoubtedly the worst side effect of the UIGEA, and one that I suspect will grow worse as time goes on. Fly by night poker sites and e-wallets bilking customers. Stick with established ones like instadebit, click2pay, payspark, epassporte, etc.

The demise isn't based on foreign companies not stepping up to take the business, because as you said, someone always will.

The real problem is the US Govt does have the ability to block transactions stateside through our banks. While you've said in the past that it will be a hassle, it will be the law and the banks have absolutely no incentive not to comply.

Matt,

I'm probably just being dense here but I'm having a hard time following your logic.

The downtrend in the graph must reverse because all downtrends reverse? Or do only downtrends in what were once lucrative industries always reverse themselves?

The slave trade used to be enormously profitable for the individuals and businesses involved in it. The social and legal environment changed and it ceased to be enormously profitable. There wasn't a magical reversal back to former glory in the slave trade, because the basic rules of the game had been changed for forever.

(True, we can both cherry pick examples like that all day to make a case for either side of the coin, but none of that is really the point.)

You seem to be clinging to the idea that it's still business as usual in the world of online poker, when event after event after event point to what's becoming patently obvious. It's not business as usual in the world of online poker.

It doesn't matter how illogical it all is, as far as the US government ramming through a jacked-up piece of legislation in an unrelated bill, and then public and private companies outside the US caving in and complying with it. It's completely illogical. But it's happening, at an ever increasing rate.

ePassporte and Click2Pay won't be allowing US citizens to transact with gambling sites a month from now. Guaranteed.

That doesn't mean it's hopeless, as a few years from now Harrah's and MGM might have booming online sites, and fishy money will pout into the game and we'll all be saying "Man, it's even better now than it was before!". This current mess could, in the long run, be the best thing that could have happened to the online poker industry.

But as for now, it's pretty damn grim, and getting grimmer, and there's no logical reason to expect that it will get any better in the near future.

Accordingn to Firepay it says you need a "Canadian bank account". How hard is it to be a US citizen and open up a Canadian account used just for poker. Has anyone tried this?

Matt:

Tried to sign up today for Click2Pay and got this e-mail:

Dear Sir or Madam,

Thank you for contacting the CLICK2PAY Service Team.

Due to the existing US legal situation the decision has been taken to not accept any new sign-ups from US players. Please respect our decision in this regard.

Kind regards

CLICK2PAY Service Team

My point here is simple. As investors say, past performance is not an indicator of future results. Just like you can't look at a stock's line graph and assume it will continue on in the same direction, you can't assume that recent events are an indicator of the future.

Everyone knew there would be fallout from the UIGEA. It was obvious. It was just a question of when and how much. One of the first things people said was "publicly traded companies will stop accepting Americans." Neteller announced almost immediately that they would. And that's been 95% of what's happened. I don't know how much any of the private companies were making, but I'm sure it's a drop in the bucket compared to the public ones that quit.

And it's also obvious that someone will be there to pick up the pieces. There's so much money. Whenever something is that profitable, someone is there to make the money. Always. It's an inviolable rule of nature. People start cocaine rings for much less profit than ePassporte stands to make, and they have to face a lot more heat to do it.

There are quite literally billions of dollars to be made here. If I weren't kind of attached to so many people here I'd be in Costa Rica running a new Neteller right now. If I were British I'd have done it three months ago. Why not?

If the government has any success at all, it will only be by stopping the flow of money from the US to e-wallets and poker sites. It won't be by scaring them into shuttering their doors. There will always be plenty of both for the money to flow to. To think otherwise is simply foolish.

And in this case there is no reason for either click2pay or epassporte to stop. There's too much money to be made and literally no punishment for continuing, provided the proprietors remain overseas. That's not much of a problem for 95% of the world's population.

Also, do you think PokerStars is going to stop taking Americans? If not, why not them? What about Ultimate Bet, Doyle's Room, and Full Tilt? I know for a fact that at least two of them will take it to the Supreme Court if they have to, and their owners are here in the U.S. If Howard Lederer is willing to do this, why not some guy in Antigua who has no chance of ever being arrested?

And the slave trade is quite different. You're comparing apples to oranges there. Slavery isn't a vice, its an infringement on human rights. History is full of examples of laws successfully stopping people from doing brutal things to each other. I can't think of one instance of a harmless vice being successfully eradicated by outlawing it. Can you? I can think of dozens of miserable failures.

Do we have any mutual friends who we would both trust to escrow? I'll gladly wager you a grand or two that one of those two will still be willing to accept American customers in a month, and with a little odds I'll even take both. I'm pretty sure they'll both be accepting American bets for as long as banks are willing to EFT to them.

You know Mark, I was actually just thinking about my conversation with their support guy today. I think what I asked him was whether or not I would still be able to transfer money to and from casinos. I guess it never occurred to me that they would stop taking Americans but allow existing ones to go on making transfers to casinos because that makes literally no sense at all. But I used them to deposit to a casino an hour ago, so apparently that is the case.

Either way you should be glad, they are pretty miserable. They are about as bad as it gets. Their signup process is abominable and their support non-existent.

Hi Matt,

regarding the following statement of yours -
"Google around and try to find anything else that they appear to make money off of. It looks like they might do a couple porn sites too, but I can't imagine that being much of a source of revenue, since pornography is legal and sites could therefore presumably accept a credit card.", I'ld like to inform you that ePassporte not only does billing for porn sites (which I suspect does not make them any revenue worth speaking about, but is the only real solution left for porn affiliate programs to send money to their affiliates.
Neteller, Moneybookers and some other ewallets did stop these services due to certain problems, but ePassporte stayed in that industry.
You can be assured that transfering those payments does generate them some decent revenue and from what I know, the adult industry was where it all began for ePassporte.

From my point of view, the management of ePassporte would stop doing gambling transactions when they are faced with possible jail time if not doing so.

OK Matt, what number are you dialing for Click2Pay support? I just called 1-888-254-2729 from my home phone (Time Warner Digital Phone, not Cingular this time) and was told the number I called is no longer in service. This number is directly from the Click2Pay website.

ATMOnline is a service similar to Click2Pay I assume. I just set it up from the UltimateBet website, though it has been listed there as a deposit option for quite awhile (before the UIGEA was passed).

Sorry for this post so close to the last one, feel free to combine them.

In your first response, you said to use established paysites like instadebit, etc.

Instadebit is closed to US customers as well.
From UltimateBet:
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InstaDebit has decided to stop offering their services to customers within the United States. We apologize for the inconvenience and encourage you to use your Visa, MasterCard, or any of our many other payment methods. For any questions, please contact our deposit assistance team at 1.866.605.0311.
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Looks like Western Union is going to be the only way to go soon.

Hi Matt:

I generally agree with your line of economic thinking, here. But I wonder if the U.S. government can make it so difficult to fund these accounts that the online games become bad for everyone but the very best players. Clearly, all of these restrictions are disproportionately turning away the casual fish, so clearly there is an amount of success the gov't can have, such that for a player of skill X, online poker is no longer worth it.

I'd love to hear your comments on the reality of this situation and/or your thoughts on the future vis a vis it.

best
matt

That's the same number I call, and I get through. Sometimes I get a busy signal, and most of the time I get put on hold for 5 minutes or more. They suck, but they are there.

If ePassporte has substantial non-gaming revenues then I could see them exiting the market if they felt gambling transactions put them in danger. I have to believe their revenues are nowhere on the order of Neteller's, but maybe I'm wrong. I have no idea whatsoever how big the porn affiliate business is, though I don't understand why those sites wouldn't just send EFTs and checks and skip ePassporte's exorbitant fees.

On the other hand, Click2Pay I don't understand at all. Maybe they have something going that I don't know about, or maybe they are US-owned. Either way they suck so I'm glad they'll be vanishing.

It doesn't matter though, e-wallets are like drug dealers. Kill one and two will take their place.

And Matt, yes that will happen to an extent. Luckily poker is catching on around the world, so there will always be plenty of fish from other countries too. In the very long run it might even make the games better. I know I'm giving serious consideration to hopping back on Party Poker.

Matt,

You're too smart to argue that sloppily, as far as taking the I'll-continue-to-ignore-all-other-evidence-and-proclaim-that-gambling-is-a-vice-you-can't-successfully-eradicate-the-market-for-vices-look-at-Prohibition-and-the-drug-wars route.

Slavery wasn't an infringement upon human rights when it was legal. Neither was denying women or blacks the right to vote, when it was legal to do so. Before the UIGEA it was legal for Neteller to allow US account holders to deposit and withdraw funds from online poker sites. Now it isn't. Things change. Things have changed.

I barely have a nickel to my name online now but how about this. If ePassporte is still allowing US citizens to create accounts and deposit and withdraw money from online gaming sites a month from now (February 21, 2007), I'll post the following in my blog, with no other explanation:

"I'm a two bit poker hack, writer, and predictor of the future, and will always remain envious of much more successful people like Matt Maroon. He shall always remain wiser than I am, on any topic, despite any education or experience I might have. Any attempt of mine to engage him in debate ends in miserable failure for me, with humiliation writ large across my face. His penis is also larger than mine."

If instead ePassporte has pulled out of the US market a month from now, you'll post the following here, with no further explanation:

"My name is Matt Maroon and I tend to make grand, bold statements about things I have no experience with, most of which never come true. Instead of ever admitting I was wrong, I simply continue to make more bold statements. If pressed to defend an untenable bold statement, I simply slightly alter my statement. When I shop for jeans, I shop in the kids section."

Deal?

Slavery wasn't an infringement upon human rights when it was legal. Neither was denying women or blacks the right to vote, when it was legal to do so.
That may be the dumbest thing I've ever heard, ever. I seem to remember something about life, LIBERTY, and the pursuit of happiness from history class. The vast majority of Americans believed slavery to be grossly immoral shortly before it ended. Basic human rights transcend laws. Again, apples to oranges.

If you think that a vice and slavery are a good comparison as relates to this argument then maybe you are dense. Either way I'm calling an end to this silly thread. Your logic train was holding tenuously to the tracks to begin with, it's now derailed, gone over a bridge, and exploded.

Matt,

I had question about something you stated:

"Also, do you think PokerStars is going to stop taking Americans? If not, why not them? What about Ultimate Bet, Doyle's Room, and Full Tilt?"

I have a bankroll and was trying to decide which online poker site was the safest place to keep my money and most likely to continue providing service to the U.S. customer. Maybe Stars is the safest but UB is most likely to continue providing service. I most likely will move my bankroll onto Stars while I still have a method for moving my money around. I would appreciate any suggestions or thoughts.

Essentially, I don't need to fund an account anymore I just want a site that I can withdraw via check from that isn't going to fold. I know all we can do at this point is make an educated guess.

Best,
Mike

My guess is that FTP, Stars, and UB/Absolute are in it until the end. The FTP people seem eager to challenge this bullshit in court. Stars and UB seem content to simply not come to this country and make hundreds of millions. I would be too in their position.

And I'm very confident that given the position Stars has, and their considerable non-American user base, that at least if they did kick us out they'd not steal our money.

And by the way, how the hell is Western Union still providing online gaming payments? Anyone have any idea on that?

International Herald Tribune
U.S. issues subpoenas to banks on online gambling

LONDON: The Department of Justice has issued subpoenas to at least four Wall Street investment banks as part of a widening investigation into the multibillion-dollar online gambling industry, according to people briefed on the investigation.
The subpoenas were issued to firms that had underwritten the initial public offerings of some of the most popular online gambling sites that operate abroad. The banks involved in the investigation include HSBC, Credit Suisse, Deutsche Bank and Dresdner Kleinwort, these people said.
The developments appeared to be part of an indirect but aggressive and far-reaching attack by U.S. prosecutors on the Internet gambling industry just two weeks before one of its biggest days of the year, the Super Bowl.
Unable to go directly after the casinos, which are based overseas, they have sought to prosecute the operations' American partners, marketing arms and, possibly now, investors.
The prosecutors may be emboldened by a law signed by President George W. Bush last October that explicitly defined the illegality of running an Internet casino. Even before the adoption of that law, the Unlawful Internet Gambling Enforcement Act, the government said that Internet gaming was illegal under a 1961 provision.
While online gaming sites like PartyGaming and 888 Holdings operate from Gibraltar and their initial public offerings took place on the London Stock Exchange, companies that do business with them and have large bases in United States have come under scrutiny by regulators in Washington.
These offshore casinos, typically based in Costa Rica and Antigua, offer millions of American bettors the ability to use their home and office computers to place wagers on a range of contests — from sports to poker and table games, like blackjack.
The prosecutors' efforts have already taken a serious toll in the last two years on offshore casinos, most notably with the arrest last year of David Carruthers, the chief executive of an Internet sports book, BetOnSports. The arrest led to BetOnSports's decision to stop taking bets from the United States, crippling its business.
Several weeks after Carruthers was detained, agents of the Port Authority of New York arrested Peter Dicks, the chairman of Sportingbet, which offers online sports betting and, like Carruthers' company, trades on the London Stock Exchange.
Last week, Neteller, an online money transfer business based in Britain, said it would cease handling gambling transactions from U.S. customers because of regulatory uncertainty. That followed the arrest of former directors.
Neteller was the principal way that people sitting at home got money to Internet gambling sites, according to I. Nelson Rose, a professor of law at Whittier School of Law.
"It appears that the Department of Justice is waging a war of intimidation against Internet gambling," Rose said.
One question facing prosecutors is whether the American financial companies are within their rights to invest in the offshore casinos, given that those operations are legal and licensed in other jurisdictions.
Matt Richtel contributed to this article from San Francisco.

Whoever is making the argument about slavery: keep in mind that before its demise slavery was becoming an unprofitable enterprise mainly due to the development of the cotton gin. Your argument that slavery is an example of a profitable business that did not survive the government's prohibition is weakened by that fact. I see no reason to question Matt's examples of alcohol prohibition, abortions, etc.

i can't believe any of the "pros" involved with FTP is stupid enough to get involved in this...esp howard who has already been to jail on a witchhunt

WU is pretty tough to track you send money to john doe not pokerstars. but since they have worked with feds in the past its pretty tough to see them being available for long

i'd gladly make you a wager that americans can't use epassporte for gaming in 9 months

Frankly, I just don't see Stars leaving the U.S. market. Stars is large enough that it could just go ahead start up its own bank and e-wallet service and continue serving its U.S. player base.

Even if it does not do that and there are very few ways for U.S. players to get money onto Stars, why would they leave the U.S. market? First, still having some U.S. players is better than no U.S. players. Second, nothing has changed with this Neteller fiasco. The U.S. has shown a willingness to go after online gaming executives and the Stars executives know this, so this Neteller thing hasn't changed anything as far as the risk they are assuming.

I'd guess that FTP, UB/Absolute and Bodog are in for the long term, too. There will be places for U.S. players to play. Game selection and quality may be another issue.

I'd guess that Western Union still works because it would be damn near impossible to determine if the money you wire to "Jose Martinez" is being used for online gaming or not.

Rumor has it that games are good at Party, but at the limits you play there may not be much game selection.

Matt,

I finally did get through to Click2Pay, just set a speed-dial and kept trying (about half an hour). So, my apologies if I seemed to doubt you. Let me know next time you're at Panera (if you're still playing there) and I'll buy you lunch.

I asked about American players and her response was "I'm not sure what's happening next month, but for now everything's fine."

If the pond dries up from the lack of making easy EFTs to and from (insert eWallet here) for the newer players aren't the sharks going to end up eating themselves?

This is what could kill online poker, not the lack of eWallets for the savvy online players.

For grins I just deposited $50 on PokerStars with my debit card. Still no problem.

"Your logic train was holding tenuously to the tracks to begin with, it's now derailed, gone over a bridge, and exploded."

lol classic

It's not going to be that difficult for the Government to block ACH transfers to certain accounts. I'm very familiar with how these transactions happen.

Physical checks would be much more difficult and I think that is what a lot of the banks were complaining about. Credit Card companies can easily block the transactions and it's not much more difficult for banks too. It's all goign to be a matter of how much the government wants to attack this.

Plus, the pro players will obviously find some sort of way to get their money in and out. It's the thousands of recreational players not feeding the games that will ultimately dry up the games. I'd expect there to be enough average foreign players out there that are bad enough to keep the games going but the mid limit guys grinding 1BB/100 are going to have a serious reality check (which is fine by me).

I agree with you Matt. It's going to be a little rough in the short term as everything settles out, but I think in the long term everything will work itself out.

Whatever the outcome, I just wish the Chicken Littles of the poker world would settle down. Their negativity is starting to annoy me.

I do not understand why some bright boy has not approached Neteller and said: "hey, I'd like to license your technology for use with poker sites only in the United States" and set up the equivalent here: as I understand the current state of the law, poker is really sort of an open question under the wire act. We really do need a test case for this proposition; if it's a winner, the market will revive instantly.

I did like the prop bet above: I don't know the poster, but the language both ways was fairly amusing.

It was a funny prop bet, and though the guy is all doom and gloom at the moment, and I think is not thinking objectively, he seems pretty smart.

I guess I'll seize on something Matt said above:

I'm pretty sure they'll both be accepting American bets for as long as banks are willing to EFT to them.

As anybody who has been paying attention knows, EFTs got shut down last week at the clearinghouse level, for nearly the entire industry. Stars eChecks don't work, Full Tilt EFTs don't work, Neteller even after pulling out can't send people their money, etc. Some sites have claimed they are working on getting alternate processors set up; I'm not sure how much they should believed.

If they get the ability to do EFTs back, and maintain them, then I would agree with Matt. But I don't think that's certain by any means.

There's been a lot of yammering over the loss of Neteller, but buried in there is the loss of the ACH system, which is legitmately a huge blow.

Does anybody doubt that when all is said and done, Harrahs (which, conveniently, was recently taken private) holds the nuts?

Seriously. The B&M casinos were conspicuously late to/absent from the online poker party. The way things are breaking, they can simply wait out the shakeout. A year or two (if it takes that long) down the road, they throw their considerable corporate and legal resources into the fray and presto! An execrable piece of legislation magically gets overturned/rewritten, and the popularity of online poker picks up where it left off -- but with Harrahs and one or two US-based B&M casino behemoths installed at the top of the food chain.

Or something like that.

PS: While writing this I blew the last $400 in my Stars account at a ridiculously juicy 6-max $3/6 limit game. I lost every single hand where I held AK or better, and suspect Harrahs is behind that as well. Although a neutral observer might conclude that I'm one of those people for whom the inability to conveniently deposit funds is a blessing in disguise...