My personal/industry thoughts on Black Friday

Do you think US players will be able to play online poker again and if so how long would you say it will be until we can?

On April 17 2011 11:41 tooker wrote: Do you think US players will be able to play online poker again and if so how long would you say it will be until we can?

Yes,
best case scenarios:
state level 1-1.5 years
federal 1.5-2 years
(I've adjusted this, simply because states may cooperate to get something federal in place more than just going forward alone on a state level)- but as a conservative guy- I'd say minimum of 2 years.

Just because even if it is approved next month, there is simply the process of organizing and setting things up.

But for the 3 sites that were indicted,
this case will last at least 2 years,
if the party poker founder Anurag Dikshit case is any indication and
if they should win the case, then they may enter in thereafter, but likely not at the start if the legalization happens within 2 years. Keeping in mind that this indictment is as serious as can be.

I would think because of the level of activity towards legalization, that this recent event occurred and it is no coincidence they targeted the top 3 sites.

If you consider, 2006 is when the UIGEA came into effect, in has been 5 years now, regardless of the recent activities and during this time, Party, 888 and ipoker have been out of the market.

Do you believe any of the big 3 will survive the lawsuits without going bankrupt? The fines that they are facing look quite menacing.

On April 17 2011 12:14 Surprise wrote: Do you believe any of the big 3 will survive the lawsuits without going bankrupt? The fines that they are facing look quite menacing.

Very insightful question,
and I can't answer it without it shocking people, but I'll give you the criteria of what you need to look at:

1. How much of their market is US based?

2. What was their long term potential had they not gotten indicted in the US, if the US had eventually legalized?

3. Do they participate in any other regulated markets?

Questions that can't be answered are:
(a)Will the DOJ be able to freeze all the international accounts they have identified as related to the big 3 via interpol?
(b)How much has the brands been damaged from this and its ability to get new customers and keep a cash flow going?
(c) Will the sites be able to continue to use the .co.uk & .eu urls?

Ultimately, site themselves will do a cost analysis of the potential cost to address the full consequences of the indictment,
so its not just a matter of going bankrupt, its a matter of 'is it worth it?' and the top 3 questions will illuminate that.

The last point is the sites must try their best to honour the non-US cashouts, even if it is a huge blow to their business foundation,
if they don't, then its not a matter of everyone cashing out, it's a matter than no will want to 'cash in/deposit' and their cash flow will dry up.
If they have any hope of getting through this to get back into the market, they must maintain their international credibility with their existing
customers to have the cash flow to go through the entire process with the DOJ. If they don't honour international cash outs, then something is up. But I wouldn't jump the gun on this, even a weeks wait after something like this would be considered reasonable.
In cash of US cash outs, it's really to early to say anything without it being full speculation.

It wouldn't be right for me to put a % beside who I think would make it and not, but I think it's obvious from the main 3 questions above.
But if something from questions a, b, c, should turn out in the negative result, I really think all bets are off.

When PS and FT set up ways to allow players to withdraw, what time frame do you believe this will happen in and how will they go about doing so?

thanks for this david. i dont have any questions at the moment but just wanted to show appreciation for your time and the professionalism youve shown on lp so far.

I'm aware of the shit storm we are in but a small part of me hopes that I may one day at least see a fraction of my bankroll again.

What would be at this point from the information you've gathered be the best case scenario on US players getting their money back or is that simply not an option at all? It's very obvious the Feds want their piece, and they'll use their vast resources/reach to get it.

On April 17 2011 12:57 joLin wrote: thanks for this david. i dont have any questions at the moment but just wanted to show appreciation for your time and the professionalism youve shown on lp so far.

Also +1 to this post.

I liked your posts the instant you started posting on LP. Props yo~

Awesome post sir.

I have 500k on PS should i try to cash it out? How many risk is there of NON US players (australian) of losing their bankrolls..

Thanks! If stars goes down, will u offer me some kind of special deal to play on heropoker??

Do u think non americans are safe playing at FT/PS?

do u expect a boom on smaller sites that accept US players? will/can such sites be targeted by US govt?

do sites that accept US players at the moment work legally (how does cashout occur etc?), if not legal are they in serious threat of being shut down in near future?

On April 17 2011 12:46 Carthac wrote: When PS and FT set up ways to allow players to withdraw, what time frame do you believe this will happen in and how will they go about doing so?

On April 17 2011 13:01 YoMeR wrote: I'm aware of the shit storm we are in but a small part of me hopes that I may one day at least see a fraction of my bankroll again. What would be at this point from the information you've gathered be the best case scenario on US players getting their money back or is that simply not an option at all? It's very obvious the Feds want their piece, and they'll use their vast resources/reach to get it.

International: All they need to do is just make a good estimate of where they stand financially as a company. The issue is, while player funds are separate and may be protected, the ones in transit, likely not as much. If the DOJ had accounts which were for fund transfer to players, then the sites need to account for the fact that they these funds are gone, but they still need to pay these out to the players. And while most of these accounts should have been for US players only, no one knows what the percentages are in these frozen accounts are between US/International. That being said, I do not think the sites would be trying to make an exact count, just enough to know what is the general situation is so the accounting doesn't become even more convoluted later on.

So obviously for high valued players they want to get them their cash asap to maintain their trust, so they will likely start with those cash outs first.


US: This is a pretty sick question mainly because, even if they had the funds available to give to you, by what processing agent would they use to get you the funds? I can only say, unless it is in cooperation with the DOJ to let you get your funds, any attempt to send them through would give further exposure to those sites and even make them potentially even more guilty, as, they would either have to use the current system they have which hasn't been exposed yet, or actually state it is really from 'x company' and still have the transferred funds rejected by the back from being related to online gaming. I think anyone who says they have a time line or answer for this is speculating hardcore and even if the DOJ were to get directly involved with this, they would need to get access to the funds and the player balances to get this process started and that would only happen once the legal proceedings got far enough for the DOJ to get control of those assets.

That being said, I was not on the payment side of any site, so I don't know if there is some other mechanism to do so, but even the player balances may be considered evidence now. Other than flying to the bank and picking up your funds in cash, I can't see any other process off the top of my head.

BUT, the DOJ's intention wouldn't be to screw the little guy (I know it doesn't feel like that), but if they claim the revenue in damages, they will sort things out as well with player balances. I would said though ANYTHING right now, even my comments are mere speculation, you will will have to simply wait for further developments. So I'm trying to say, on many levels, it doesn't look good, but we simply don't have enough information to really say one way or another, yet.

On April 17 2011 13:02 YoMeR wrote: Show nested quote + On April 17 2011 12:57 joLin wrote: thanks for this david. i dont have any questions at the moment but just wanted to show appreciation for your time and the professionalism youve shown on lp so far. Also +1 to this post. I liked your posts the instant you started posting on LP. Props yo~

Thanks to both of you & sorry this couldn't be under better circumstances.

Thanks for your posts.
Out of curiosity since I play on Playersonly: how much jurisdiction do the skins on Merge have on cashing out policies?

On April 17 2011 13:10 wobbly_au wrote: Awesome post sir. I have 500k on PS should i try to cash it out? How many risk is there of NON US players (australian) of losing their bankrolls.. Thanks! If stars goes down, will u offer me some kind of special deal to play on heropoker??

Again, if a company wishes to really continue business, and I think PS does, then they will honour cash outs and keep the international business running;
but I would minimize your exposure, not because I think that PS will tank immediately or in the short term, but it would not be prudent not to keep that much online considering the overall situation. After all the sites are under indictment, its not like they left completely voluntarily.

But to share this is one point that players wouldn't normally think about:

The players numbers right now haven't dropped, but unlike you educated regs, fish are always coming and going,
this is called the 'churn rate'. meaning every month a set average percentage of players drop out of the poker site because they went busto, or
haven't decided to reload for this month.

If a site is unable to get new members sign ups at a certain rate to compensate for this churn rate, the numbers will decrease each month and
the games will also get tougher and thus also increase the churn rate among, not just fish, but regs as well.

So now PS, FT and UB need to now publicize their new url to get players, and if they players just assume its dot com, well that is worst possible thing you want to see
as a new player signing up.

I mention the above because I want to put your question into context,
if the site, minus the US players, does not drop further, month on month and even grows,
your online balance is that much more secured.

If the site, minus the US players, drops month on month,
you may one day wake up and feel very much akin with your US poker playing brothers.
But out of the 3, I do feel that PS has the most chance to take it as far as it can go.

Regardless of PS going down, which I honest to God hope it doesn't (as I still have many colleagues and juniors working there who have jobs there as well as all the international players),
I will always try to my best treat you well at Hero Poker on all levels whenever you'd like to come over. But again, I wouldn't want PS to fold for any reason.

Cheers.

On April 17 2011 13:35 HeroPoker-CEO wrote: Show nested quote + On April 17 2011 13:10 wobbly_au wrote: Awesome post sir. I have 500k on PS should i try to cash it out? How many risk is there of NON US players (australian) of losing their bankrolls.. Thanks! If stars goes down, will u offer me some kind of special deal to play on heropoker?? Again, if a company wishes to really continue business, and I think PS does, then they will honour cash outs and keep the international business running; but I would minimize your exposure, not because I think that PS will tank immediately or in the short term, but it would not be prudent not to keep that much online considering the overall situation. After all the sites are under indictment, its not like they left completely voluntarily. But to share this is one point that players wouldn't normally think about: The players numbers right now haven't dropped, but unlike you educated regs, fish are always coming and going, this is called the 'churn rate'. meaning every month a set average percentage of players drop out of the poker site because they went busto, or haven't decided to reload for this month. If a site is unable to get new members sign ups at a certain rate to compensate for this churn rate, the numbers will decrease each month and the games will also get tougher and thus also increase the churn rate among, not just fish, but regs as well. So now PS, FT and UB need to now publicize their new url to get players, and if they players just assume its dot com, well that is worst possible thing you want to see as a new player signing up. I mention the above because I want to put your question into context, if the site, minus the US players, does not drop further, month on month and even grows, your online balance is that much more secured. If the site, minus the US players, drops month on month, you may one day wake up and feel very much akin with your US poker playing brothers. But out of the 3, I do feel that PS has the most chance to take it as far as it can go. Regardless of PS going down, which I honest to God hope it doesn't (as I still have many colleagues and juniors working there who have jobs there as well as all the international players), I will always try to my best treat you well at Hero Poker on all levels whenever you'd like to come over. But again, I wouldn't want PS to fold for any reason. Cheers.

Thanks for the awesome post, I think i may just cancel my 500k wire and cash out a lil less.

expected this blogpost to be about Rebecca

On April 17 2011 13:16 CamilaPunt wrote: Do u think non americans are safe playing at FT/PS? do u expect a boom on smaller sites that accept US players? will/can such sites be targeted by US govt? do sites that accept US players at the moment work legally (how does cashout occur etc?), if not legal are they in serious threat of being shut down in near future?

Just keep checking 3 things:
1. no more url confiscations of the current url they are using
2. no constant decrease in player numbers month on month
3. international cash outs are still going through with no issues

But, I'll be clear about one statement.
In regards to AB/UB, the fact that they are willing to allow current US players to keep playing while in the US,
speaks volumes to me (even if payments are disabled). Whereas PS/FT have disallowed US players from playing in the US.
While you didn't mention UB/AP in your question, you definitely shouldn't.

There will be minor boom with the smaller sites,
but 100% the DOJ targeted the top 3 sites for a purpose
and while I'm sure the DOJ likely does have a lot of information on the smaller sites as well,
politically this is a much bigger win on many levels.

But likely legalization will occur before the smaller sites can really have an impact,
but should US legalization not occur and the smaller sites do replace PS/FT (highly unlikely because no one will engage in the same level of
marketing spend/investment, if there is a chance of this happening again) then I'm sure the DOJ would come after them.

How other sites do their cash out process, would possible be different due to the fact the volumes are significantly lower and the nature of the relationships may be more direct, as bank may actually accept the gaming code, but since the volume is so low, the bank is never warned etc, so it is 'legal' insofar as the bank hasn't received a warning yet, when when the warning does come, to do so further would be risky,
(no I'm not counting this as ignorance of the law or innocent till caught, but that the bank may have assessed it to be 'lawful gaming' internally)but it is difficult to comment further on that.

Again PS may have thought what they were doing was actually legal because they consider poker a skill game and don't offer table games,
but there are some sites don't promote to US players but the network is open to US players.

So this may be more of a politically motivated indictment where by these sites were very mainstream and open in the US market, even if it was through the dot net. The main issue is that they allegedly in worked cooperation with payment processors to circumvent the US wire/funding issue, thus the money laundering charges.

As an extreme example: a poker site in Denmark may be open to US residents and their credit card works on the site, but its not marketed to US players and has no English on the site.
It's not likely this would be targeted, but if the payment processor is doing something shady and there can be a concrete link between the two, well a case could be made, but they likely wouldn't be targeted.

But there is a reason why Party left the market, and those reasons never changed, so in the same way, just because a site isn't targeted is no guarantee that it won't be.

But to answer your question, I don't think these smaller sites in the short term are at risk to be shut down, but these sites that market to the US will likely be excluded from any legal market entry, and as you've seen with PS/FT, you never know what will happen.

But I would think that this is a high enough profile case, which took out the three market leaders, as sufficient enough to satisfy the intentions of the whatever parties that have an interest or gain in this indictment have and scare the crap out of the existing operators.

On April 17 2011 13:33 ManofFire wrote: Thanks for your posts. Out of curiosity since I play on Playersonly: how much jurisdiction do the skins on Merge have on cashing out policies?

Much, we can handle it on our own, or through the network or give specific instructions on it,
like restrictions or exceptions.

What do you think is gonna happen with Cereus?