October 2006
« Sep   Nov »




So America can’t play poker online any more.

That’s not strictly true.  As I understand it, and to be honest I haven’t done extensive research to work out which versions I’ve read are the complete truth, it’s going to become an offence to fund gambling transactions through a US-based financial institution.  The bill – which has still not become law – does not make it any less legal than it currently is for Americans to play online poker.

Today my mailbox started filling up with newsletters from various affiliate programs reacting to the news.  Interestingly, I’ve not yet had anything from a poker site directed towards me as a player, only as an affiliate.  A few statements have been issued, with a handful of sites claiming it’s business as usual (well done particularly to Absolute Poker, whose shirt I am wearing inadvertently today, but had I realised the significance it would be with pride) and the rest saying, well, really we don’t know what to do yet.

Here are some excerpts from the emails I received today:

"As of today Betfred have stopped taking business from US customers in the wake of recent prohibitive legislation by the US government. To clarify, this means that US residents and/or US citizens will not be able to use Betfred at all for telephone betting, online sports betting, casino or poker."

"Our software and ECash provider for, The Sands and Omni Casino, CryptoLogic and ECashDirect, have made the decision to no longer service US registered accounts.  Consequently, all accounts with US based addresses will no longer be able to play in the casino or poker room as of 12PM EST today October 3rd.  Our sister casino 49er Casino uses a different provider, Real Time Gaming (RTG) who has not announced any changes due to these new regulations."

These two seem to be simply overreacting however the legislation may have given them the final push to block access to US players.  It’s unlikely that this is the real reason for kneejerk.  Last week William Hill already decided to dump their US players, probably in light of the Peter Dicks and David Carruthers arrests.  It makes sense that Betfred would follow suit, and the tone of SunPoker’s email suggests that they wouldn’t care if they still had a payment provider that hadn’t jumped ship.

"(InterPoker) regret to inform you that from 11am EST on 3rd October 2006, we will be closing all US gaming accounts. Player’s balances, minus uncleared bonuses, will be returned to players  within the next 3 – 4 weeks by check and you will cease to earn revenue share from these players in the future."

InterPoker also use EcashDirect and Cryptologic, so I guess their hands are tied too.  However this is quite drastic.  Less than three hours after this email was sent, all their US accounts are being automaticaly closed.  However they are going to take nearly a month to send those guys their money back.  The final statement is somewhat redundant – how could you earn revenue from a closed account anyway?  Or do they mean they’re just going to keep that commission anyway?  This is what started me thinking… and then…

"PartyGaming will no longer accept wagers from US customers once the act becomes law. Customers resident in the United States, or accessing us from the USA will no longer be able to access our real money gaming services. … Percentage Plan revenues from US customers will continue until the point those customers are unable to play for real i.e. until the legislation becomes law."

This is huge.  Party’s stock price has plunged by over half since Friday, and understandably so when they have reacted so dramatically so quickly.  Almost all of the other major operators’ statements have been undecided until they work out how the new law will actually affect them.  Party – the largest on the net – have immediately said that they will block access to US customers.

My cynical mind sees a problem here.  Firstly, their play money servers will remain available to US players.  Whilst play money poker is clearly not illegal, why would they bother keeping the servers open? only exists as a decaf version of the real thing to give new players a taste for the action.  And it works.  So if there is any possible loophole to exploit, Party will be back in the market.  Whilst Ecash is solely a gaming transaction provider, Party would be able to carry on using Neteller at least – a European company that has already stated that the US law cannot touch them.  I just don’t believe they really mean this.

The statement about affiliate revenue makes me very suspicious.  Even if it becomes difficult to play poker online, some players will be serious enough and make enough money to carry on despite the hurdles they have to overcome.  The biggest players are those likely to have an illegal rakeback agreement, and even if they don’t many will have been referred via an affiliate bonus code.  Party already has a history of closing down affiliates who give a share of commission back to their players – so here is an ideal opportunity to sever those affiliate ties and take back the 25% of the rake they are paying out.

You have to wonder just how much that affiliate commission amounts to and whether it is comparable to the amount of business Party stand to lose if they had simply issued an "undecided" statement.