It hit him like a kick in the teeth, a punch in the stomach, a slap in the face. It wasn’t that he wasn’t expecting it; Scott Christiansen (not his real name; he was interviewed for this story on the condition of anonymity) knew it was coming. He’d felt it in his bones for the last month. That botched wire transfer, the tepid, dismissive response from customer service: “Yes, sir, and perhaps if you use a more civil tone with us in the future you will get a more prompt response.”
He knew it was coming, but it didn’t hurt any less.
A cool $12K stuck in a bank account somewhere—maybe Switzerland, maybe a remote island country—it didn’t really matter where.
It could even have been stored at his local Bank of America branch. But regardless, he knew he wasn’t going to be getting his hands on it anytime soon. The feds were involved. “It was like the Department of Justice knocked down my door and kicked me in the sack,” Christiansen recalls.
His day started like any other, in the dimming light of the late, late afternoon. Around 4 PM he rolled out of bed, grabbed something caffeinated—an iced tea, or maybe a Coke—and a cup of Greek yogurt with honey. And then plunked down on the couch for an hour or two. . . . Let the haze of sleepiness drift away slowly. No sudden movements, no big decisions, maybe a little TV. It was a gray April 15—tax day—but to Christiansen, a Capital Region resident, it was like most other days. That is, until he moved from his couch to the computer.
There he would normally sign on to fulltiltpoker.com, one of many online poker sites that advertises its free poker learning rooms while relying on its real online cash games to make money. Launch the client, enter a password, wait for the connection and then poke around a bit. Maybe slide on his headphones and microphone, connect to Skype to tutor his Norwegian student in the finer points of the game.
Slide from virtual room to virtual room looking for the right game, the perfect opponent, the ideal sucker: an easy mark with easy money. “I just started my scouting routine and went over to a poker site and saw that the funds were frozen, and it went viral from there. It was like a kick in the nuts.”
There, smack-dab on the front of all the poker sites, were the seals of the FBI and Department of Justice, and a message: “This domain name has been seized by the Federal Bureau of Investigation pursuant to an Arrest Warrant in Rem issued by the United States District Court for the Southern District of New York.”
Twelve thousand dollars frozen in the virtual ether.
The feds had nailed the poker sites. The charges: illegal gambling and fraud. Federal authorities claim that the poker sites that operate in places such as the Isle of Man and Costa Rica are openly flouting a 2006 law that says sites may not “knowingly accept” most forms of payment “in connection with the participation of another person in unlawful Internet gambling.” The feds said the poker sites were misleading banks into handling millions and millions in earnings from illegal gambling, and in some cases were bribing the banks to do so.
The population of online poker forums swelled to the brim. “I can’t pay my student loans,” they said. “I make five times more grinding than what my job pays me,” they said. “The feds fucked us and good,” they said.
And the news got worse: The FBI wasn’t going to let anyone have their money back.
It seemed like the end.
“This is just a blip,” said James Maney of the New York Council on Problem Gambling. “There is too much money and too many people involved. When they passed the first law banning it the industry found a way around it.”
Maney says that while the popularity of online gambling clearly has grown over the past seven years, it isn’t clear to him exactly how much. Why? Because no one is funding research on how much impact it has. And Maney hasn’t noticed an increase in calls for help from gambling addicts.
“Why would our calls go up?” Maney asks. “People mostly end up in rehab for alcohol when they are mandated to by the court. With Internet gambling they only stop when the money runs out, and we know with credit, these days it can go on for a long time. The only time you see legal action is when it comes to embezzlement, but by the time the case is brought, the addiction has been going on for years.”
Maney says online poker makes it so much easier for gamblers to keep playing and keep it on the hush-hush.
“There isn’t even physical money involved,” says Maney. “People are using their credit cards, and we know people don’t think of that as real money. And it is completely secret. How would my wife know if I was addicted to online gambling?”
Playing the horses used to mean Joe Q. Average had to make his way down to the OTB—catch a bus, hitch a ride, spend some gas. Once old Joe was there it took about half an hour between races. With online poker, Maney says, “You can run six, 10, 12 hands at a time. It is right there all the time.”
And, Maney points out, it isn’t like online poker is the only online gambling game in town. Gambling may be illegal online, yet New York has found a way around it. People can gamble on horses on the Internet through the New York State Racing Authority and Off Track Betting.
Maybe the government doesn’t want to know how much money people are losing online.
“In Batavia Downs people lost $25 million last year,” says Maney. “Who is losing it? It’s not like there are jets coming in with high rollers from overseas. And that community is not well off. I don’t think we want to know who is losing the money.”
So who stood to benefit from the government shutdown? Online gambling is legal in Canada and in Europe, and the governments get to tax the proceeds. In America that giant cash cow is basically the Wild West. Independent offshore groups siphon in loads of cash from college kids, professional gamblers, stay-at-home moms, stay-at-home dads, people at work and people at school—the majority of whom should be spending their money on something else—and the government wants a part of the action.
The inside dope, according to Internet chat rooms, political pundits, and gambling industry vets, is this: U.S. Senate Majority Leader Harry Reid (D-Nev.) had himself a rough reelection campaign. Remember all that talk that our very own Sen. Chuck Schumer (D-N.Y.) could end up leading Senate Democrats if Reid lost? Well, Reid didn’t lose. And his come-from-behind win (over Tea Party-backed Republican challenger Sharron Angle) was financed in part by his newfound pals in the Las Vegas gaming industry. Harrah’s casinos donated $83,000 to Reid through employees and political action committees, and MGM Resorts International, a major casino operator, was Reid’s biggest donor with $192,000, according to Politico.com.
Casino heads at Harrah’s sent e-mails demanding that lower management push employees to vote for Reid; one e-mail featured the warning, “Waking up to the defeat of Harry Reid Nov. 3 will be devastating for our industry’s future.” Casino shuttle buses ran employees to the polling places on election day; reportedly, they had been told to vote Reid. Some employees reportedly resisted, and middle management complained to upper management. The conversation has been documented by leaked inter-office e-mails, but the Federal Election Commission declined to investigate.
“Put a headlock on your supervisors to get them to follow through,” they were told.
Reid had been staunchly opposed to online gambling. That is why observers were a bit surprised and more than a little tickled when, in December 2010, Reid started pushing to add language legalizing online gambling to a spending package. The legislation had interesting wording about which big fishes would be able to run online gambling sites: “. . . providers that have an established track record of complying with a strict regulatory environment, have an established track record of providing fair games to consumers, and have significant goodwill and assets at stake, in addition to their Internet poker assets, to ensure they would comply strictly with the new regulatory regime.”
In other words, it seems that Reid wanted to hand over the fat cash cow that is online gambling to his friends in the casino business—the ones who helped him win reelection. Up until the FBI sting, casinos had been looking for a way to get into online gambling. They rubbed up against her; they put a hand on her thigh. She slapped it away. “Let’s be friends,” she said. Some poker sites were working on arrangements to have virtual online rooms in conjunction with major casinos like Harrah’s, but those deals were all thrown out when the feds came rapping on the door.
And surprise! Billionaire casino mogul Steve Wynn and his counterpart over at Caesar’s Entertainment Corp., Gary Loveman, are pushing to “clarify” federal laws about online gambling in a way that would legalize online poker so that they can get in on the game.
It is not clear that the FBI took action at the behest of anyone in particular, but to poker fiends and a number of politicos, it all seems a little too convenient.
Meanwhile, the FBI has allowed gaming sites to use their seized addresses to coordinate refunds to America poker players. Some have moved faster than others. Christiansen got a lousy $60 from a poker site he never used that much. Full Tilt Poker has yet to give him the major refund he is looking for, but he has moved on. “I made $75K on poker in one year,” Christiansen recalls fondly, explaining that an initial fasination with poker led to his investment in a slew of poker guides, and that the years he spent afterward “grinding out” local poker games have given him an edge over the average player.
“But I’m sort of lazy. The potential was there to make $200K a year if I put the time in, but I was grinding maybe one to three days a week at three hours a day. If I was playing seven hours six days a week I would be making much, much more.”
It’s not like Christiansen is looking for sympathy. He knows his three-hour days three days a week were a luxury. “The bills were more than covered—not even close. I can win or lose six times the rent money in a few days or an hour,” he laughs. He also had the tutoring gig, getting beaucoup bucks an hour for tutoring poker star wannabes from Belgium, Germany, all across Europe. He made $40,000 a year doing that, he says.
It was one of those connections that has bailed Christiansen out of having to go look for another gig, something perhaps a bit more legit.
He has an agreement with a friend in Europe. He got that sweet wire transfer, a cool $8,000, to get his bankroll started again. They will split the winnings 60/40 in Christiansen’s favor and square up with more wires.
As for the future of online gaming in America, Christiansen thinks he has a pretty good idea about where this is all going.
He expects a long period where only “small fish renegade sites” deal with the American market. Eventually, he says, the big fishes will swim back in.
“It will help the casinos get their foot in the door. It’s like they cleared out the playing field so the major casinos could get a piece of the action. They will eventually get this regulated and they won’t be facing any competition from companies like Full Tilt that have the name recognition and have been around for seven years.”
Christiansen sees similarities between the game of poker and what he sees as the strategy that politicians and corporations are employing.
“It’s like the politicians are playing the game of who can get the drop on the other guy. It is a lot like poker; you’ve got the one-shot guys who come home at night angry about their job, angry their wife cooked them a steak and it’s cold, angry they are drinking a beer but it’s the cheap shit, and they want to blow $50 on a poker game. It’s the guys like me who get them when they maybe get a little luck, go on a run and end up in the $800 room. And then it’s the big fish who get my roll when I play a $10,000 buy-in.”
Christiansen remembers his start in poker years ago, grinding out local games, playing in the underground games with the vigs and the smoky rooms, the occasional brawl. The random college game, the exclusive get-together in the closed business, the lawyers, the kids, the teachers, the “professional rounders” who got their start from watching poker on television. He recalls the early-morning runs to the casino poker table. He remembers the bad old days of always looking to find a game to make ends meet. He remembers it all—and the feeling of rolling up their cash and putting it in his pocket. Picking up the sucker’s money and making it his own. And really, it’s not all that bad. Real life just got a bad rap.
“There’s always going to be poker,” he says. “It’s just about where to find a game. I may have to go back to the underground games, but oh well.”