Wednesday, September 21, 2011

Poker Ponzi Followup

I received a lot of phone calls and e-mails yesterday from people who wanted my opinion after news broke about the US Attorney in Manhattan calling the online poker site Full Tilt Poker a "global ponzi scheme" and filing a civil lawsuit against the owners of the company, including well-known poker pros Howard Lederer and Chris Ferguson.

Dennis Phillips and I spent the first half of our Final Table show discussing all the details of the story at length yesterday (you can listen to it here), with me concluding that Lederer and Ferguson may go down as bigger poker pariahs than Russ Hamilton, the man behind the Ultimate Bet cheating scandal of a few years ago. If the allegations against Lederer, Ferguson, et al are true, then they cheated a lot more people out of a lot more money -- hundreds of millions of dollars -- than Hamilton ever dreamed of, thus rushing past Hamilton and approaching Bernie Madoff on the scumbag scale.

What this means for anyone who still has money locked up on Full Tilt (which they haven't been able to withdraw since the DOJ shut down their US operations on Black Friday, April 15th) is that any hope of recouping those funds is now almost assuredly lost. This entire affair, while far from over, serves as more proof of why online poker needs to be licensed and regulated in the United States. While strict rules don't guarantee people won't get ripped off -- see Bernie Madoff, Enron, the financial industry, etc. -- they do create an environment where safety and security are a priority and, with proper oversight, limit the opportunities for customers' cash to be misused by criminal enterprises or businesses that are simply run incompetently, whether there's an intent to steal or not.

The story also highlights the difference between Full Tilt and PokerStars. While the execs at the former allegedly had a pay-themselves-first policy to the tune of $444 million over four years (!), the latter has kept players' funds segregated and secure so that they could return them to US players after Black Friday, and continue to service players in other parts of the world. That's why, going forward, the DOJ will likely look more favorably on PokerStars than Full Tilt (and Absolute Poker and Ultimate Bet and other sites).

Lederer and Ferguson, along with CEO Ray Bitar and other Full Tilt owners like Rafe Furst, created a new-media business that, if run honorably, would have printed lots of money for them year in and year out. Unfortunately, they let greed get the best of them and cooked their golden goose.

I didn't have any money on Full Tilt, so I'm not directly affected by these allegations, but I worry that none of this is good for poker's overall image. Unfortunately, poker only gets major media attention when something negative like this Full Tilt story breaks, and then it seems as if none of the reporters has ever played a hand online or set foot in a poker room. Thus, their bias is to present our game as something slimy, when in fact the story is about corrupt business practices.

Most of us who play poker are upstanding, normal people who enjoy the challenge of outplaying our opponents at the table. Some play for small amounts, others play for more. Most of us play within our means recreationally, while some have turned it into a profession. I know of a friendly neighborhood game played in someone's basement for $5 each, but I also know of a weekly game that existed in DC when I lived there where the buy-in was $10,000 and the participants included a Supreme Court Justice and several big-shot lawyers.

Regardless of the size of the game or the circumstances, poker players must be conscious of the image we're presenting -- not to each other, but to the general population. I'm not suggesting that all the hoodies and sunglasses be thrown aside in favor of suits and ties, but the way players dress and act (both at the tables and elsewhere) can have a great impact on how the non-poker-playing world views all of us.

We don't play in dingy smoke-filled backrooms anymore, and we shouldn't act like it. We play out in the open in our local casinos, with dozens of cameras and personnel ensuring the integrity of the game. I don't know anywhere else in the world you'd see people leaving a stack of hundreds of dollars worth of chips behind while they go to the bathroom, secure in the knowledge it'll still be there when they get back.

As in any industry, there are people with sad stories related to finance, relationships, jobs, and other problem areas, and unfortunately, they tend to get the spotlight more often than poker success stories. Why? Because most winning poker players don't make a fuss about themselves. It's bad for business to go around bragging about how much you've won or who you beat or why you're the best. It's also bad for business for any poker player to be revealed as a cheater, because it reflects on all of us, just like every baseball slugger was assumed to be using steroids.

Besides, we're usually playing against people we know, who know us and our reputations: this guy's a great player, this guy's a lousy player, this guy's a fish, this guy plays tight unless he's had too many beers, this guy plays too many hands, this guy may be ahead now but he won't have any chips left when he leaves, this guy almost always wins, etc. Yet it's not an exclusive club -- when a visitor comes to town or a first-timer sits down at the table, they're not shunned, but welcomed to the game and treated like everyone else.

So, if you're not a poker player, please don't let the Full Tilt headlines color your view of those of us who play the game legitimately and honestly. Save your frowns for the real culprits, or for the opponent who just cracked your aces.