TV show sensationalizes online poker scandal

Last night 60 Minutes finally aired a feature it had been promising for months on the Absolute Poker/Ultimate Bet cheating scandals. A story in the Washington Post was released the same day, summarizing the details of the scandals, the facts of which are by now old news to those in the online poker community.

The stories, the result of a joint investigation by the two news sources, did not shed any additional light on the cheating scandals, now over a year old. They did, however, manage to set back the already-reeling online poker industry with half-truths, inflammatory language and pointed innuendos.

The stories discussed the cheating scandals in which some insiders at the two online sites gained real-time access to all of the hole cards of live games and used that information to cheat players out of millions of dollars.

This part of the story was accurate, as was the discussion of the part played by the online poker community itself in discovering and investigating the cheating.

The rest of the story, however, cast online poker in a decidedly dangerous and negative light. In 60 Minutes' typical ominous tones of foreboding, online poker was called "shadowy" and "murky," and the fact that the sites themselves are not based in the U.S. was mentioned repeatedly.

The Washington Post similarly tried to stigmatize the online poker world, calling online sites "freewheeling" and comparing them to "modern-day bootleggers." The origins of Absolute Poker were called "sketchy."

Three times the 60 Minutes piece said that online poker is illegal in the United States, something that is a gross oversimplification and plain misstatement of the status of the law on online poker in the country.

The Wire Act has been interpreted by the Department of Justice as making all online gambling illegal, but the only federal U.S. courts to have ruled on the issue have found just the opposite.

The U.S. Fifth Circuit Court of Appeals ruled that the Wire Act only applied to sports betting, and the Supreme Court has not ruled on the Act's applicability to online gambling. As far as the UIGEA is concerned, by its very language it does not make any act that is otherwise legal under state, federal or tribal law illegal.

Both 60 Minutes and the Washington Post claim that there is no official regulation, enforcement or supervision of the online gambling sites. Yet, there are a number of regulatory commissions that regulate, license and provide oversight for online gambling sites, such as the Gibraltar Regulatory Authority, the U.K.'s Gambling Commission and the Kahnawake Gaming Commission.

All three of these regulatory commissions utilize the safety and security standards of eCOGRA as part of their regulatory oversight. eCOGRA is "the independent standards authority of the online gaming industry," meaning it is responsible for the examination and accreditation of sites that provide online gambling to make sure they abide by certain rules to protect players and ensure their games are fair.

The Kahnawake Gaming Commission and its investigation into the scandals were also discussed last night. Kahnawake was described somewhat condescendingly as a small, inexperienced licensing operation which works out of a nondescript building that used to house a mattress factory.

In the 60 Minutes piece, both the reporter and a reporter from the Washington Post saw fit to repeat the word "nondescript" twice more, in describing the exterior of the building.

Then 60 Minutes discussed how the three-person Gaming Commission met "in secret" and is independent of tribal leaders. It alleged that its investigation had been neither transparent nor aggressive because the owner of the sites, Joe Norton, was a former grand chief of the Kahnawake who helped establish the Gaming Commission.

The fact that the two sites were fined $2 million by the Gaming Commission and were ordered to repay all losses to injured players was quickly dismissed as a "slap on the wrist" by the 60 Minutes report. The story did not mention that the sites are on probation for two years and under strict review by the commission in the aftermath of the scandals.

The 60 Minutes piece ended ominously with the thought that "maybe this is still going on" and the idea that there are people out there "figuring out here's a way we can do this again."

But nowhere in the piece is there a discussion of alternatives to offshore poker sites, such as having the United States government license and regulate online gambling sites and set up oversight and security measures if the government is worried about protecting players.

In response to the 60 Minutes/Washington Post story, Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative, issued a statement on how the problems discussed in the story could be addressed by legislation regulating the online gambling industry.

"Now more than ever, Congress should understand why it should step in and regulate the industry to protect the public," the statement provides. "We are hopeful that increased attention in the media about the issue will lead to increased movement in Congress."

Sandman expressly mentioned legislation introduced last year by Barney Frank (D-Mass.), the Internet Gambling Regulation and Enforcement Act of 2007, which "would establish an enforcement framework for licensed gambling operators to accept bets and wagers from individuals in the U.S."

Paul Leggett, Chief Operating Officer of Tokwiro, owners of Ultimate Bet and Absolute Poker, released a statement about the 60 Minutes/Washington Post stories last week, before either aired. He indicated that he had been contacted by them some eight months earlier and had provided detailed answers to approximately 150 questions submitted in his effort to bring all the facts to light.

He said he ultimately decided not to go on camera once it became clear to him that they were not looking for the truth but wanted instead "to produce a sexy story about the 'dark underbelly' of online poker and embellish it with details of the cheating scandal."

His blog continued: "After dealing with 60 Minutes and the WP for many months, everything inside me was screaming they were going to try and crucify us. " Leggett wrote that "after viewing the two video clips on their website yesterday www.cbsnews.com/video/60minutes my worst fears seem to be coming true. By the looks of the first video, it seems that they will paint online poker as an illegal industry with no oversight."

Between the highly charged words chosen for maximum effect - of the shadowy and murky online poker industry operating "outside of U.S. law" - and the omission of details of how the industry is regulated and supervised and how the companies involved were punished, it is difficult to argue that the stories were aiming for fair and balanced.