Barack Obama wins, will poker win too?

November 4 marked a historic day for the United States as Barack Obama won a landslide victory over John McCain in the 2008 Presidential Election. Scores of voters turned out to help Obama defeat McCain 349 electoral votes to 173; this ensured that Obama would become the nation’s first black president. And there may be no group of people happier about Obama’s election than poker players.

Obama is a person who’s played a fair amount of poker in his time. When he was a senator in Illinois Obama used to play a lot of Texas Hold’em and 7 Card Stud and developed a reputation among his opponents as a smart player who didn’t bluff much.

During 2008 Presidential Race, word got out about Obama’s poker playing background and many professional players started to support his candidacy. In being a fellow poker player, Obama also understands the game and has a softer stance on it than the man who ran against him in John McCain. The big question is though; will this be a difference make in lifting the UIGEA?

The government is already getting lots of pressure from groups like the Interactive Media Entertainment and Gaming Association (iMEGA) to lift the UIGEA since iMEGA recently appealed their lawsuit against the US Department of Justice. That probably won’t be enough to get the law lifted, but it’s definitely a help. And with Obama as the president, that’s just another plus in the quest to banish the UIGEA.

I don’t know how big of a part Obama will play in the future as far as getting rid of these ridiculous online gambling laws, but I do hope it’s a significant one since his stance towards poker is favorable.

Are your site's terms fair?

Internet poker players have a lot to cope with these days. First, there is the battle against the omnipresent cheating scams. Then, there is the US government’s current assault on online gaming in general via the ban on money transfers. If those things aren’t enough to chill you from playing poker online, let’s take a look at the terms under which players must agree to play!

If you are like most people, when the terms and conditions (T&C) for a software product come up on your computer screen, you just click on whatever version of “yes” they present to you and move on. For online poker players, it is no different. After a few conversations and interactions with other players online, it occurred to me that most people have very little idea just how much authority they grant to the gaming sites at which they play and place their money.

The typical T&C that poker players sign up to are outrageously one-sided and unfair in my opinion. We would never accept these terms from anyone else handling our money, but we do so from these guys. Why? Well, mostly it is because players do not take the time to understand them, and because together, the site providers form a united front. The various companies agree to non-compete on terms and only compete in other areas. The consumer has nowhere to go. Your choices are to play or not to play. All of this is fair to a large degree, because playing poker is not a necessity. Sites have the right to create unreasonable terms. Players, on the other hand, have the right to understand the terms and start fighting against them.

I have money deposited at online poker sites. However, I would never keep more money deposited online than I would want to be taken unfairly and without due process. My advice to you, the reader, is to follow my lead and keep your balances low.

Additionally, I understand that poker sites maintain a separation from what they can legally do and what they can reasonably do without losing their client base. After all, the online poker community is very vocal and spreads information quickly. If poker sites started screwing around with player’s money left and right, they would start losing clients.

Still, do you want to sign up for these T&C and trust poker sites to act ethically with your money? And how does the site become aware of your failure to comply? There are no poker police are there? Where is the Due Process? Where is the appeal process?

The only thing the gaming sites will respond to is decreased revenue. That’s all. So when you terminate an account for any reason, always state the T&C as the main cause. Complain about these terms frequently online in forums and when corresponding with the sites. All of this is necessary as we move forward toward regulation of online poker, a necessary step in legalizing online poker in the United States.

It’s a long battle, but it has to start somewhere.

Pokerstars terms & conditions

Other Considerations: Cheaters

Most poker players in the United States play the game over the Internet without any worries. After all, there is no specific law in the US which states that online poker is totally illegal; only the UIGEA which makes specific elements of online gambling illegal. You can say that online poker is illegal in certain states such as Washington where being caught playing over the Internet can yield the same punishment as raping someone. But once again, it can’t be said that online poker is illegal across America…unless you’re listening to 60 Minutes.

A recent 60 Minutes broadcast of a segment called “The Cheaters” focused on the cheating scandals which took place at Ultimate Bet and Absolute Poker (both have since been joined by the CEREUS network). In the segment, 60 Minutes did present some facts to their general audience who probably has no clue how online poker really operates. However, they also managed to botch several things within the show’s airing as well.

One thing they repeatedly said was that online poker is illegal which is not necessarily true. As mentioned before, in certain states like Washington, it can be a crime to play online poker. But if you’re talking about the US in general, then ‘no’ it is not illegal to play poker. There are just too many variables at work to simply label online poker as being illegal.

Another thing that 60 Minutes got wrong was that no legal action has been taken in the case involving UB and Absolute Poker. This is false due to the fact that the Kahnawake Gaming Commission is currently seeking legal action against Russ Hamilton. This is a very big fact to get wrong along with repeatedly saying that online poker is illegal. Hopefully, this misinformed segment on 60 Minutes doesn’t tarnish online poker much.

Completer Poker Scandal Story

Putting the UIGEA in Financial Perspective

One aspect of UIGEA that has really struck me the wrong way is the provision to keep state lotteries and horse races out of the act. This part of the act shows the real motives of the US government, and I can tell you that it has nothing to do with them looking out for our well being. One “fun” little fact that I have researched about the state lottery provisions shows exactly why the US government is fighting so hard to keep the UIGEA enforced with its special provisions.

State lotteries are funded completely by consumers and generate millions of dollars each year to the US government. The financial aspects of state lotteries are so lucrative for the government that it is easy to see why they are fighting to keep them intact as they are. Here is exactly how most state lotteries are run and why they are so profitable for the government. I will use $1 million awarded to the winner for this example:

• State lotteries are composed of all the money generated for that week in ticket sales, and then simple math is used to determine the “jackpot.” In this example, we will assume the state generated $2 million in ticket sales for the week. The jackpot is about 50% of total ticket sales, so $1 million is to be awarded to the winner. (About 1/3 of the ticket sales goes towards education and is included as profit to the government.)

  + $1 million to the US government
  
  

• One lucky person wins the jackpot worth “$1 million dollars,” so now it's time for the government to pay up 1/2 of their profits, right? Wrong. The winner is given two options for its winnings. Option A allows for the winner to take $1 million in fixed payments over a 20-year span. Option B allows the winner to take a lump sum worth about half of the jackpot. Fixed payment Option A actually costs the government around $625k, as they immediately purchase an annuity for this amount to be paid in 20 years. Since they have generated the money up front from consumers, they have just profited another $375k for this week of the lotto. If the winner chooses Option B, the US government only forks out $500k of the $1 million jackpot, giving them another cool $500K pay day.

  - Option A is + $1,375,000 already to the government

  - Option B is + $1,500,000 already to the government
  
  

• Next the winner of the “$1 million” jackpot has just moved into the highest tax rates of the state. In this example, we'll assume the winner chose Option B and has $500k sitting in his bank account, less any withholding taxes the government may have collected. (This is the best option if you are smart and decide to invest most of the money to get a better rate of return than with fixed payments.) Come tax time, the winner will owe roughly $200K more in taxes. Yes, that's right. As a regular consumer, the taxes would be as high as 40% of the total winnings. You are luckily not subject to paying income tax on top of all that. Well, only because the winner would end up with close to nothing left of the winnings.

  + $1,700,000 direct pure profit to the US government
  
  

• Now this “lucky” winner can use the $300K for whatever they choose. Hopefully most of it will be invested, but it will most likely be spent directly back into the US economy.

  + any taxable money spent indirectly to the US government

So as you can see, it is almost sickening to see how much money is made from state lotteries on a minimum bi-weekly basis. Remember how the example was for a $1 million jackpot? The lottery of California's jackpot is set right now at $27 million for December 10, 2008. If you don't have a weak stomach, go ahead and run the numbers for how much the US government is going to make in the next 2 days in this wonderful “regulated gaming industry.”

http://www.plan-investments.com/index.asp

So is poker really gambling?

There are very few people in my life that I have actually taken the time to explain why poker, if played properly, isn't gambling. Many people just wouldn't understand. A lot of people were raised to believe any games you play in a casino can't be beaten, period. After all, how are all those hotels in Las Vegas so big and glamorous? For the most part, that's all paid for with customers' money that was gambled away.

'The house' will be the only long-term winner, right? This is true when the person is playing against only 'the house.' However, poker is great because you're playing against other players and can capitalize on their mistakes. The casino always gets its cut from the games, regardless of who wins. It rakes a percentage of each pot in cash games and charges an entry fee to tournaments. The money that is won and lost by the players in poker comes down to those individual players' decisions. Poker is a game of skill. If I were to sit down with a complete novice and play 10 hands of no limit holdem, it is not unrealistic to think I could lose many of the chips. But if we were to play 100 hands, I would win the majority. And as the number of hands went up, the more talented player would subsequently win a higher percentage of chips. On any given hand, anyone at the table can win, but skill is the deciding factor in the long run.

There is a lot of variance in poker, both positive and negative. It is variance that truly makes the game fun and profitable for the more skilled players. Some new players experience positive variance when they start, making them think they are better than they truly are. Conversely, sometimes when strong players experience negative variance, they tilt and don't play up to their potential. Once variance can be understood and accepted, the peaks and valleys are minimized.

Emotional control is just one of many skill sets involved with poker. Computing pot-odds, recognizing betting patters, and understanding the intricacies of the game, such as positional power, hand strength, and the general ebb and flow of the game are also factors that make poker a skillful game. There are thousands of people that have made a living strictly from poker for their entire adult life. You can not say the same for games such as roulette and craps. While some may have tried, none have succeeded for any extended period of time.

Poker is a game that can be learned, studied, and improved upon. If this wasn't the case, then how can the continued success of players such as Phil Hellmuth be explained? This is a 42-year-old who has over $9 million in career tournament winnings and 11 World Series of Poker bracelets. Or, better yet, how did 19-year-old Annette Obrestad, the recent winner of the inaugural WSOP Europe on Sept. 16, win a 180-person online tournament while having her hole cards covered the entire time?

There are many smart, educated people in the world that are oblivious to poker being a game of skill. Perhaps if they took the time to understand the complexity of the game, they would have different opinions, and the government would not continue to hinder poker by classifying it with other casino games decided solely by chance.