My Reaction to the 60 Minutes Story Part 2

7 December 2008, Created By: Nolan Dalla
My Reaction to the <i>60 Minutes</i> Story Part 2
The 60 Minutes story that was so anticipated yet at the same time feared finally aired on the East Coast at slightly past 7 p.m. It was the first segment in the customary three-story format which has been a staple of the Sunday night newsmagazine for nearly four decades.

Editor's note: If you haven't already make sure to get up to speed with part 1 of this series.

Correspondent Steve Kroft opened up the segment sitting in the forefront, with "The Cheaters" emblazoned as the segment's title on the rear backdrop. The illustration showed what is supposed to be an online poker site, but with five aces exposed.

Kroft began his remarks with allusions to the Old West. He mentioned that in earlier times, poker cheats were brought to justice instantly at the gaming table, presumably by a fellow player brandishing a loaded revolver. He then said:

But today, if you're caught cheating in the popular and lucrative world of Internet poker, you may get away scot-free. At least that seems to be the case in the biggest scandal in the history of online gambling ... It raises new questions about the integrity and security of the shadowy and highly-profitable business that operates outside U.S. law.

Frankie O'Dell
Some parts of poker are still scary.

This was the first indication that 60 Minutes would resort to exaggerating evils and propagating outdated fears. How exactly are legitimate online poker companies "shadowy?" Virtually all of them of have been licensed and are perfectly legal in their host countries.

Are all companies based outside the United States to be considered "shadowy?" If an online poker site is operating responsibly under local laws, are other Costa Rican businesses "shadowy" as well?

For instance, are farms and factories based in Costa Rica - none of which conform to U.S. safety standards and labor laws, but which aggressively sell goods and services to the U.S. market - also "shadowy" businesses?

This loaded word revealed an obvious and unmistakable bias which continues to be perpetuated by online poker's critics. 60 Minutes should have known better than to fall into using outdated rhetoric.

During the segment we're shown archival footage of Chris Moneymaker's stunning victory at the 2003 World Series of Poker. It was noted that the poker boom detonated the instant the everyman accountant from Tennessee first rocketed into America's living rooms, demonstrating that just about anyone with an online poker account and a little bit of luck could do the impossible and become a poker champion.

Kroft appeared on camera and properly noted that the WSOP is the "richest sporting event on the planet" - a nice plug to most of us who have been parroting this fact for almost a decade, and news perhaps to others who are still unaware of the game's phenomenal growth and development in recent years.

Tom Dwan
Don't take away the internet pokers!

In a fitting illustration of how big online poker has really become, Kroft said that although the WSOP is huge, it "pales in comparison to what is happening online right now."

He then said that 500,000 people are playing poker online "at this very moment." The comment implied that at any given time, half a million people are logged on, which is generally an accurate statement.

Next came a short tutorial, which happened to be very good. Viewers saw how quick and easy it is to set up an online poker account. Interestingly, the two Web sites shown onscreen were Absolute Poker and Ultimate Bet, leading me to ask the obligatory question - is there such a thing as "bad publicity?" I wonder if either of the sites got a spike out of the broadcast.

60 Minutes got really lazy at this point. Kroft naively pointed out that players can open up and fund online poker accounts with a credit card. Not quite true. This has been going off and on in recent years, with the Unlawful Internet Gaming Enforcement Act (UIEGA) now making it considerably more difficult for Americans to do what Kroft suggested.

This was followed by an outright bit of misinformation:

We should tell you that this $18 billion dollar industry is illegal in the U.S. But the ban is almost impossible to enforce since the Internet sites and the computers that randomly deal the cards and keep track of the bets are located offshore.

It would take at least a column (if not a legal brief) to go over all of the ramifications of this misleading statement. If 60 Minutes meant to say it is illegal for an online poker site to be based inside the U.S., that is correct. No online poker site may operate within U.S. borders.

The implication here is something quite different, however. The statement implies it is illegal to play online poker inside the U.S. That means millions of Americans are, in fact, criminals. Many noted gaming law scholars have taken issue with this idea, and have proven irrefutably that (except in some states, such as Washington) under current federal law it is not a crime to play online poker. Kroft blew this one like Linda Lovelace.

The next shot was the hazy, dirt-filled horizon of downtown San Jose, Costa Rica. I've been there. It's not particularly appealing for visitors.

But it seems 60 Minutes intentionally aired footage of a smoggy, overcrowded city in order to reinforce the previous allegation that online poker companies are "shadowy" operators.

Nolan Dalla
Nolan's been around the block.

Having visited a few of the offices where online sites are actually based in Costa Rica (yes, I actually stepped inside the offices - something the camera crew might have considered doing), I can say firsthand that these local businesses look very much like what one might expect to see at an insurance agency, a real estate office or any other typical business based in the U.S.

This is where online poker companies actually conduct their daily business. Not in the streets or back alleys.

Of course, the visual outdoor reminder that this is a developing country served to promulgate the myth that America is culturally and morally superior to other nations.

Then, Kroft said:

Unlike land-based casinos, there is almost no official regulation, enforcement or supervision.

This was an absurd statement. Numerous online gambling companies, including poker sites, adhere to strict laws and regulations, especially in Europe. Some online companies such as PartyPoker are actually traded on the stock exchange.

It's probably true that Caribbean and Central American laws and regulations are less strict than in Europe, or elsewhere. But many online industry leaders (BetFair, William Hill, Ladbrokes, PartyPoker, PokerStars, Full Tilt Poker, and others) operate legally and responsibly in developed nations. To completely ignore this fact and suggest most online sites are unregulated was incorrect.

Next, poker pro Todd Witteles was introduced to us for the first time. Fortunately, Witteles and the other online poker players who appeared on camera were likable and intelligent, and seemed like responsible people. Both in terms of style and substance, the interviewees provided an accurate overview of the industry and the scandals (with a few gut-wrenching exceptions, which will be cited later).

At one point during the exchange with Witteles, though, Kroft made an irreverent comment that should have been corrected immediately. He said cards "tumble out of the computer." This must have been confusing to many viewers. "Tumble?"

I didn't expect to see a technical discussion of randomization agents or to learn exactly how the cards are dealt at an online site.

But cards "tumbling out of the computer" is yet another deceptive, poorly chosen phrase which serves to make online poker seem inferior (and perhaps substandard) to live poker games played at a casino. Anyone who has ever played online poker knows that computerized poker is vastly quicker and more efficient than the game played in a live format (with apologies to the many good dealers and excellent cardrooms out there).

Then, Witteles dropped his first bombshell. Any last hope that the poker industry wouldn't be painted with the broadest, most incriminating brush of guilt was shattered when he said online poker players can never be quite sure the other players at the table "are legitimate." Worse, he said "maybe the whole game isn't [legitimate]."

The implication here was that the games themselves are dishonest. Not just the players. But the games. Wham!

One might have expected to hear this tripe from the likes of Sen. Jon Kyl or Rev. Tom Grey - that online poker can't be trusted. No one expected to hear this rubbish from one of our own loyalists.

Dan Druff
Fanning the flames.

Okay, so Witteles was cheated out of his money. He's bitter. He should have trouble trusting online sites in the future given what he has been through.

But his comments were both inflammatory and terribly misleading to far more people than those who were guilty in the cheating scandal. It was like saying that because there's a very real problem with pedophilia inside the Catholic Church, you can't ever really be certain that the priest at your local church isn't screwing your kids.

The story continued with the nuts and bolts of the Absolute Poker and Ultimate Bet scandals, followed by two detailed investigations. To 60 Minutes' credit, the poker community was identified as the real sleuths of the scandal - specifically, several players who were cheated, and those who selfishly gave of their time and energy to meticulously research mountains of data unquestionably proving that there were misdeeds.

It wasn't 60 Minutes or its powerful partner on this story, the Washington Post, that first uncovered and then fended off the critics of disbelief. It was average, everyday poker players who were the real heroes. Woodward and Bernstein would be proud.

Perhaps poker player Serge Ravitch came across as one of the most positive faces of the entire segment. The former lawyer has since been interviewed about his segment. From his remarks, he clearly understood that a story of this nature (about cheating) couldn't possibly be any good for the industry.

However, having someone like Ravitch speaking about the scandal, without the hyperbole and apprehension that everything and everyone out there might be corrupt, was indeed refreshing.

The other interviewee who came across well was Michael Josem, an Australian computer expert who was the first person to reveal the near impossibility that the cheaters could have legitimately won so much money.

Although he appeared for only about a minute or so, I came away with the understanding that Josem's role in uncovering statistical probabilities served to finalize the unofficial indictment in the court of public opinion that the AB and UB sites were indeed infested with cheaters working from the inside.

After Witteles appeared on camera again, justifiably outraged by Absolute Poker's lack of a response to the charges (first, it ignored the controversy; then it failed to identify the guilty parties by name), Kroft lobbed another assault:

In the murky world of Internet poker, there was precious little that the players could do about it. The companies were located in Costa Rica. They couldn't really complain to U.S. authorities, because online gambling is illegal.

Once again, we are reminded that online poker is a "murky world." And, online gambling (which I guess includes poker, a skill game) is deemed "illegal."

In Part 3, I look closely at the rest of the 60 Minutes story, with my comments.

Nolan Dalla can be reached at:

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