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2008 Online Poker Scrooge Awards
2008 was a tough year for online poker. The specter of the UIGEA hung over the industry like a toxic rain cloud for most of the year, before it finally poured down its poisonous regulations late in the year.
Congress has made some moves that promised change but so far have failed to deliver. And the courts were no help at all either.
It would be fair to say that the online poker industry in the United States has been Scrooged this year, and below is a list of the biggest culprits of 2008.
Governor Steve Beshear
The first candidate is Kentucky Governor Steve Beshear. When Beshear ran for governor in 2007, his major campaign promise was to fix Kentucky's economic woes by expanding gambling.
But six months into his term, he had failed to garner enough support to even get the issue before the Kentucky legislature for a vote and had to back away from that key campaign position.
So, he took a new approach. Stating that "Unlicensed, unregulated, illegal Internet gambling poses a tremendous threat to the citizens of the Commonwealth because of its ease, availability and anonymity," Beshear went after Internet gambling.
He brought suit against 141 Internet gambling sites and had their domain names seized in a secret, closed-door court proceeding.
Beshear justified his attack on the Internet sites by stating, "The owners and operators of these illegal sites prey on Kentucky citizens, including our youth, and deprive the Commonwealth of millions of dollars in revenue. It's an underworld wrought with scams and schemes."
But it was clear that dollars were the real issue. A press release issued by his office following the seizure order stated: "Unlicensed Internet gambling significantly undermines and threatens horseracing, Kentucky's signature industry and a key tourism industry, by creating unregulated and untaxed competition."
Russ Hamilton, 1994 Main Event Champion, could have been remembered as the guy who won $1 million along with his considerable weight in silver to celebrate his win at the 25th anniversary of the WSOP.
Instead, his name in poker circles is now synonymous with the biggest cheating scandal to hit online poker.
The report stated that the Commission "found clear and convincing evidence to support the conclusion that between the approximate dates of May 2004 to January 2008, Russell Hamilton, an individual associated with Ultimate Bet's affiliate program, was the main person responsible for and benefiting from the multiple cheating incidents."
According to the Commission, the affected Ultimate Bet players were cheated out of over $20 million.
The cheating did much damage to the online gambling industry. It raised serious questions about safety and security, and about the integrity and honesty of the industry, giving more ammunition to Internet gambling foes.
The Bush administration
The Bush administration can decide among themselves who the most worthy of a lump of coal is for the hasty push of regulations to implement the UIGEA. One possible winner is William Wichterman, White House Deputy Director of Public Liaison, a title which is apparently synonymous with influential insider.
Up until his last-minute appointment to the lame duck administration this past March, Wichterman had been associated with Covington & Burling law firm, lobbying on behalf of the NFL against Internet gambling.
According to an article in the Washington Post, once in the White House, Wichterman worked to get the Treasury Department and Federal Reserve to finalize the UIGEA regulations before the end of the term.
Rep. Stephen I. Cohen (D-Tenn.) raised the potential conflict of interest issue in a letter to White House counsel Fred Fielding, stating that the "impetus for the rule may have been a particular White House employee who has a clear and obvious conflict of interest."
There is no question that the NFL is against legalization of online gambling. It supported the UIGEA back in 2006 which, not coincidentally, contained a carve-out for fantasy sports betting. According to their general counsel, the NFL also opposed efforts by Rep. Barney Frank (D-Mass.) to overturn the UIGEA.
Having a former lobbyist for the NFL in the White House, pushing for the UIGEA rule to be finalized, helped the organization get the ball over the goal line with just seconds on the clock.
The television news magazine turned its eye on Internet poker with a lead story that was long on sordid insinuation but lacking in any new facts.
Promising to deliver the results of its eight-month-long joint investigation with the Washington Post into the cheating scandals at Absolute Poker and UltimateBet, 60 Minutes instead rehashed old facts while taking the opportunity to sully the already-embattled online poker industry.
The 12-minute piece included numerous misleading statements about the "illegal" nature of online gambling. It reinforced negative stereotypes about online gambling being unregulated, dangerous and shadowy, and the piece closed with the warning that these scandals could very well still be going on today.
Rather than stressing the self-policing nature of online gambling and the involved Web sites' reimbursement of their injured users, the purpose of the piece seemed to be to malign the industry.
Why would 60 Minutes do that? Other than the fact that discrediting people and companies is their raison d'être, one can also look at parent company CBS. CBS not only is largely beholden to the NFL, it runs its own fantasy sports Web site that benefits from the exclusion of online sports betting from the UIGEA.
There would appear to be a conflict of interest in CBS's 60 Minutes investigating a competing industry.
Multi-accounting is a practice of playing on more than one username or using a single username for multiple players, and is widely viewed as just another form of cheating.
It has been an issue that has plagued online gambling in the past, with Josh "JJProdigy" Field and Sorel "Imper1um" Mizzi being two of the biggest names associated with using multi-accounts. But it was the twin revelations that well-known and highly respected players were still doing it which gave Internet poker another unneeded black eye.
First, Justin Bonomo revealed earlier this year that he had been banned from PartyPoker and PokerStars for using multiple accounts in tournaments, often using the accounts to enter a single tournament as four simultaneous players.
Then, in September, Brian Townsend was accused of multi-accounting. In a written apology following the disclosure, Townsend explained the creation of the additional accounts as a way to provide himself with anonymity online, not an unfair advantage.
Still, he was contrite and accepted his punishment, and indicated he would be donating $25,000 to charity as a sign of good faith. Yet, the harm was still done as once again the headlines proclaimed another "online poker cheating scandal."
It was yet another example that online gambling foes could use against the industry at a time where its future is not certain.
Democrat and Nevada resident Harry Reid would seem an unlikely candidate for the Scrooge award, yet it is precisely because of his background and importance in Congress that he comes under scrutiny.
Reid, past chairman of the Nevada Gaming Commission, has been an unabashed supporter of his state's key industry. When he was promoted to the head of the Democratic Party in the Senate, the Las Vegas Sun ran a headline, "Casinos are elated over Reid's promotion," which quoted state gambling officials praising Reid as the industry's biggest supporter.
However, Reid, whose top contributors have been MGM Mirage, Station Casinos, Harrah's Entertainment and Boyd Gaming, has said, "I do everything I can to protect Nevada's No. 1 industry, but I have no obligation to protect gaming in other places."
And there is the rub. Reid's support of land-based casinos in Nevada doesn't translate to support for online gambling. Just the opposite, in fact; Reid has been quoted as saying, "Internet gambling cannot be controlled and, therefore, it should be illegal."
He once said the only online gambling bill he would support would be one that includes an outright ban. Reid told the Las Vegas Review-Journal in regards to online gambling. "It can't be controlled. It's ripe for cheating. And it's open to fraud."
While he opposed the tactics that saw the UIGEA snuck into the Safe Ports Act, Reid has done nothing over the past two years to overturn the Act.
With the current economic slump, some Las Vegas casinos are now reconsidering their position on online gambling and looking to get into the business themselves. If they do decide to "join it" rather than "beat it," then Reid may have an opportunity to use his considerable clout to benefit the online poker industry after all.
Perhaps he could even make our "nice" list next year.
What these Scrooges have in common is that, to benefit their own interests, they have inflicted great damage on the online poker community. Whether by sullying the integrity of the industry or trying to close it down entirely, they have made it that much harder for the industry to get the respect and freedom it deserves.
To all of them, we say Bah Humbug!