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The Week in Post-DOJ News

THE WEEKLY SHUFFLE, 2011-05-01, by Ozone

The second full week after Black Friday, the day on which the U.S. DOJ indicted the operators of three large online poker rooms thereby radically changing the online poker landscape, was not without it's share of interesting news. Here is a rundown of some of the noteworthy news items that unfolded in the second week of online poker's phase in the Dark Ages:

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PokerStars Begins Processing Cashouts, Full Tilt Still Pending

On Tuesday, PokerStars announced they were able to move forward with processing cashouts for U.S. customers. This came after they, along with Full Tilt, struck a deal with the DOJ in which each company recovered their .com domain names for the purposes of returning U.S. player funds.

Many U.S. players have already reported receiving their PokerStars withdraw. It seems apparent that any American with money on PokerStars may indeed view that money as safe. The same cannot be said, at least not with as much confidence, about monies at Full Tilt. The company has yet to start processing cashouts. However, in a player FAQ page directed at their U.S. customers, they state that they will release an update regarding cashouts sometime this week.

As for U.S. players with money on UB and Absolute Poker, the cashout process may not go as smoothly. UB has already limited cashouts for non-US players to a paltry $250 a week maximum. They have thus far failed to enter the same agreement as Stars and Tilt with the DOJ to begin returning funds to U.S. players. Industry consensus is that money on these sites may possibly never be recovered.

Caesars CEO Calls for Federal-Level Legalized Online Poker

In an op-ed written for Fortune magazine, Caesars Entertainment CEO Gary Loveman argues for why online poker should be legalized on a federal level. Loveman drew a parallel of online poker's current status to that of 1920s Prohibition saying, "The current ban on Internet poker has many parallels with the Prohibition of the 1920s. Business is being diverted from legitimate, respected companies that employ thousands of people to fly-by-night, underground (and in this case, foreign) operations."

While Loveman's article in and of itself didn't really say anything that hasn't already been said by someone else, it is a really good sign for poker. The chances of online poker being legalized at the federal level are substantially higher when CEOs of large casino groups support the cause. Corporations hold considerable leverage within the U.S. government so it's a good beat for poker that powerful casino corporations seem to be in favor of legalizing online poker.

Another good beat is that staunch anti-gambling proponent Jon Kyl seems to be softening his stance towards online poker.

At the end of last year, Senator Harry Reid nearly succeeded in legalizing online poker in an 11th hour effort. Black Friday combined with continued pressure from high-ranking businessmen like Mr. Loveman could result in a successful attempt by Mr. Reid to legalize online poker at the end of next year. At the moment, this scenario is probably poker's best chance at gaining legal status in the U.S.

Poker Traffic Down 22%

According to PokerScout.com, a site that tracks online poker traffic, Black Friday has resulted in a 22% decrease in worldwide cash game players. The 'Big Three' sites that were shutdown by the DOJ account for this decline. PokerStars has seen a 28% drop in cash game play. Full Tilt has experienced a 35% drop. The real loser is the CEREUS network, home to UB and Absolute Poker, which has dropped a staggering 65% since Black Friday.

Sites that have not serviced U.S. customers since the UIGEA was passed in 2006 have slowly been increasing their player bases since Black Friday. Party Poker has climbed 3% thus far with 888 Poker adding a 4% boost to their player pool. The largest winner so far has been the OnGame Network, which is home to sites like Betfair Poker. That network has seen it's cash game play grow by 9% over the past two weeks.

It's tough to say what direction these trends will go in the future. Facing a multi-billion dollar legal battle in the U.S., PokerStars and Full Tilt may have a fight to remain solvent in the coming months and years. Since they are not publicly traded, it's anyone's guess how much liquidity these companies have with which to fight the DOJ while continuing to operate a business outside the U.S.

More Media Exposure for Poker

A silver-lining of the Black Friday ordeal, if there is one, is that poker has been receiving a lot of mainstream media attention over the past two weeks. Poker pro and writer Shane Schleger recently had an article about how Black Friday affects online pros featured in Slate. Another poker author, Matt Matros, had his thoughts published in the Washington Post. Recreational poker player Nate Silver published a great piece in his NY Times political blog. Yours truly was featured in a Wall Street Journal article and Fox News segment. Countless other players, both professional and recreational, have contributed to other media publications.

The mainstream media has done a great job making sure Black Friday was not an incident only those intimate with the poker community know about. They have also, by and large, portrayed the situation and poker community fairly. The considerable amount of media exposure poker has received since April 15th is a big help towards putting the topic of online poker on the national agenda.

Now poker has to hope to get lucky enough that the Dark Ages only last for a couple of years.

The Weekly Shuffle is our Sunday column with our observations and commentary on the poker world. Have an idea for an article? Leave a suggestion on the feedback page.

 


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