$33 Million In Poker Winnings Seized By US Govt

An anonymous reader writes "A New York Times story reports that, 'Opening a new front in the government's battle against Internet gambling, federal prosecutors have asked four American banks to freeze tens of millions of dollars in payments owed to people who play poker online. ... "It's very aggressive, and I think it's a gamble on the part of the prosecutors," Mr. Rose said. He added that it was not clear what law would cover the seizure of money belonging to poker players, as opposed to the money of the companies involved.' Many players are reporting that their cashout checks have bounced."

Comments

Lame Gov

[tc3driver]

Hello.... Government....
Don't you have more important things to be thinking about than `internet poker`?
Like an economy on the rocks?
or maybe nearly 10% of the folks in this nation who have no source of income?

Honestly, I'll never understand who goes through our governments minds... they do nothing but waste time, thus waste money... and people wonder why this nation is on the verge of collapse...

Re:Lame Gov

[Brett Buck]

There's no more important government function that getting their hands on someone else's money.

      Brett

Re:Lame Gov

[geekoid]

Yes the government is just one big agency that only does one thing at a time~

The nation is on the verge of collapse(it's actually not) due to libertarian shifts in the banking industry.

Re:Lame Gov

[MetinAustralia]

Wasn't this law brought in to protect the individual from losing his/her money to gambling? Then why is the individual now losing his/her money to the government?

Re:Lame Gov

[MindlessAutomata]

I guess they forgot how America was "discovered" in the first place... to escape an oppressive and over size government that is at it's heart, was hypocritical, much like today

The problem isn't that the politicians forgot this. It's that the American population did.

Re:Lame Gov

[QuoteMstr]

Stop funding tasks that aren't improving urgent concerns

So in your world, nothing not urgent should be worked on? I take it you're not a fan of preventative maintenance then.

Re:Lame Gov

[moosesocks]

'+5, Insightful'? Really?

Care to propose a government that can function without taxation? The Nobel Prize committee would love to hear about it.

If the government is unable to enforce its laws (tax evasion being among those laws), it becomes completely ineffective. Many consider the ability to systematically and consistently collect a tax to be one of the cornerstones of a stable government. The fact that the economy is fux0red has absolutely nothing to do with the government's enforcement of the tax code. As long as there's a code, it needs to be enforced, just like the rest of our laws.

I suppose you could question whether or not this law should be on the books to begin with. However, the fact that it's being enforced shouldn't even be the subject of discussion. It's quite well-known that this sort of activity is illegal, and there are plenty of legal venues for gambling available. The situation here isn't even remotely controversial.

In fact, we'd have huge problems if the government selectively chose which laws to enforce.

Re:Lame Gov

[Khyber]

Libertarian and banking do not, and most likely never will be, associated in the same sentence.

Go look at the Federal Reserve. How fucked would they be if we subjected them to a standard audit?

THERE lies your answer. The government is the problem. Bye, libertarians, bye democrats, bye greens, bye republicans - you're all at fault.

Re:Lame Gov

[Anonymous Coward]

Care to propose a government that can function without taxation?

Ours, more or less, for the first 50 years or so. You know, back in the olden days when "interstate" meant interstate and "exclusion of powers" referred to an exclusion of powers. Crazy times. I hear that there was only one law against murder in a given jurisdiction, instead of 17. It's a wonder we weren't all killed.

Re:Lame Gov

[Darkness404]

Just like the 1880s, right? Sure, you can live free if you're the upper crust. Otherwise, your life will be nasty, brutish, and short, and spent toiling away and never seeing more of your proceeds than you need to stay alive, barely.

Please elaborate. With the decline of government comes the decline of patents, therefore medicine would be cheaper than ever before and would only be limited by the materials needed to manufacture it. And how won't you see any more of your proceeds? Today we can import almost anything we need for cheap, with the sharp reduction in tariffs expected with a decline in government, goods become cheaper.

This isn't a nightmare scenario. It actually happened. It was called the Gilded Age, and we should be glad it ended. Why do extreme libertarians like you consistently deny the logical implications of your policies?

Again, elaborate, the Gilded Age was plagued with lack of information, government policies (such as giving land away to the railroad companies), a lack of a global economy to export to and import from and a lack of (today) basic technology. Suffice to say that the Gilded Age could not be recreated with A) A weaker government and B) 21st century technology/world economy.

I can't eat a Youtube video. How do you think all the thousands of people who are paid to create internet content get paid? With currency only good on the internet? The Internet isn't some isolated bubble divorced from the real economy. It's enmeshed quite heavily: people order real, hard goods through it, put real capital derived from conventional industry into it, and spend the real money generated from it on tangible products.

Your point holds true to a point, but look at Google, their entire business is intangible and works on choice. Plus even though there are thousands getting paid for internet content there are untold millions making no profit whatsoever on internet content. If you don't believe me simply look at your post, you posted a comment with a 0% chance that you could use that comment to make a profit.

The internet though is different than the traditional government controlled economy because you have absolute freedom of choice. Where in the USA you are penalized for choosing a provider in a certain area (either by taxes or by tariffs) it makes no difference where the site is you are accessing on the internet. If I want to go to www.nicovideo.jp rather than YouTube for my online video, that makes no difference. Whereas if I choose to get a Japanese car rather than an American car I would be paying more to the government for doing absolutely nothing.

I suppose I'm dealing with a true believer here. Of course there's a recession "in the internet": it makes as much sense to say "no recession in the internet" as it does to say "no recession on the telephone network".

The difference is there are entire industries not based off the network of the internet but rather the internet as a whole. The phone network functions, well, as a phone network. Other than perhaps a few phone-based services, there is no business using the phone system to really function like Google has for the internet. Then there is the internet community, the phone network has no real community.

Re:Lame Gov

[JStegmaier]

I think you're showing your own bias in how you interpreted that AC's post. You read it as bashing the Democrats, and point out that it's just a continuation of a Bush policy--which was exactly what he was criticizing!

Since when is "But the Republicans were doing it to!" a defense of the Democratic party? If anything, they should be doing absolutely nothing the Republicans were doing, but unfortunately we're just getting more of the same.

Re:Lame Gov

[tsm_sf]

With the decline of government comes the decline of patents, therefore medicine would be cheaper than ever before and would only be limited by the materials needed to manufacture it.

Those who don't remember history are doomed to buy Dr. Brush's Magic Tonsil Tonic.

Re:Lame Gov

[kcitren]

Please elaborate. With the decline of government comes the decline of patents, therefore medicine would be cheaper than ever before and would only be limited by the materials needed to manufacture it. And how won't you see any more of your proceeds? Today we can import almost anything we need for cheap, with the sharp reduction in tariffs expected with a decline in government, goods become cheaper.

And where is the incentive to create new medications? I, for one, am awaiting for the creation of a few new medical treatments [a pill, say, to replace the three times a week injections I have to give myself; or a cure, perhaps to the underlying condition, not that it's in the pharmaceutical companies interest to actually cure anything ]. The value of something is not simply the material costs. Research costs time and money, that cost has to be a) recouped, and b) incentivized. While I'm a huge proponent of the open-source, work on what you believe in, approach to development, it's not enough. There are not enough independently wealthy, selfless, do-gooders [in the best sense of the word] in the world to rely on for advancement in technologies.

Re:Lame Gov

[Lunzo]

Libertarians (or more correctly neo-liberals) are opponents of the reserve bank yes. However they have had a huge influence on the banking industry. They successfully lobbied for deregulation in the extreme under the mantra of "the free market is more efficient" and "let the market decide". What they didn't realize is that some regulation of the banking industry is needed to ensure there is still a market for people to decide on when times get tough.

Re:Lame Gov

[Daniel Dvorkin]

a pay-per-use government with only one tax mandatory (for defense)

So why is defense the special case in this pay-as-you-go libertopia? Why can't we all just defend our own homes and communities, as the Framers intended? ("A well regulated Militia, being necessary to the security of a free State ...") Once you admit that one particular function is too big a problem for individuals to handle on their own, you pretty much open the door to all the others.

Re:Lame Gov

[martin-boundary]

Because you have to destroy the village in order to save it.

Re:Lame Gov

[Migity]

Well, let's see....the Republicans started it...so we shouldn't bitch about it when the Dems do it??

Maybe this guy was right.

20 I have already intimated to you the danger of parties in the state, with particular reference to the founding of them on geographical discriminations. Let me now take a more comprehensive view, and warn you in the most solemn manner against the baneful effects of the spirit of party, generally.

21 This spirit, unfortunately, is inseparable from our nature, having its root in the strongest passions of the human mind. It exists under different shapes in all governments, more or less stifled, controlled, or repressed; but, in those of the popular form, it is seen in its greatest rankness, and is truly their worst enemy.

22 The alternate domination of one faction over another, sharpened by the spirit of revenge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries, which result, gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of Public Liberty.

23 Without looking forward to an extremity of this kind, (which nevertheless ought not to be entirely out of sight,) the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it.

24 It serves always to distract the Public Councils, and enfeeble the Public Administration. It agitates the Community with ill-founded jealousies and false alarms; kindles the animosity of one part against another, foments occasionally riot and insurrection. It opens the door to foreign influence and corruption, which find a facilitated access to the government itself through the channels of party passions. Thus the policy and the will of one country are subjected to the policy and will of another.

25 There is an opinion, that parties in free countries are useful checks upon the administration of the Government, and serve to keep alive the spirit of Liberty. This within certain limits is probably true; and in Governments of a Monarchical cast, Patriotism may look with indulgence, if not with favor, upon the spirit of party. But in those of the popular character, in Governments purely elective, it is a spirit not to be encouraged. From their natural tendency, it is certain there will always be enough of that spirit for every salutary purpose. And, there being constant danger of excess, the effort ought to be, by force of public opinion, to mitigate and assuage it. A fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest, instead of warming, it should consume.

-George Washington's Farewell Address, paragraph 20-25

Re:Lame Gov

[Korin43]

Isn't the point of drug laws to keep people from ruining their lives?

Why is the government ruining drug users' lives by arresting them and leaving them with criminal records?

Re:Lame Gov

[Threni]

Because it's about government control and looking tough on crime, not about stopping people from ruining their lives.

Re:Lame Gov

[WNight]

Nobody is suggesting stopping gambling, just non-state sponsored gambling where taxes aren't being paid. All your moralizing about gambling is totally irrelevant here because the US Gov would be really happy if the addicts would ruin their lives in approved casinos.

It's absolute theft to take this money. It belonged to one person, he gave it to another, they gave some back. Now the government decides that like the "house" in a crooked casino we can't leave, we owe a percentage of each transaction to them. For the favour of doing business in their turf.

Like all taxation it's theft.

But because we're all already screwed sixty-seven different ways from various taxes we're content to sit by for, no - we demand that, the government put the screws to someone else because we desperately believe the lie that it'll lighten our burden.

But it's just theft. Seizing evil gambling winnings to pay for orphanages (and the staggering collapse of the banking system) is a winning political move because it's nothing more than "See that shady-looking guy? Let's beat him up and take his money!" People are always willing to ignore the rights of others for a quick buck - or the promise of one.

(cough) See that Iraqi with that oil well... One quick little war...(/cough)

Re:Lame Gov

[Anonymous Coward]

Mostly because it's a load of shit.

America was "discovered" by Columbus in search of a trade route, so I guess, at its heart, Americans are pure capitalists.

But wait! Before that, Lief Erickson "discovered" America when looking for new lands to pillage! So, I guess, at its heart, Americans are thieves and vandals.

But wait! Before that, Asian immigrants "discovered" America while migrating across a now-disappeared land bridge! So, I guess, at its heart, Americans are migratory nomads.

But wait! That's all a load of worthless pop-psychology drivel! I guess, at its heart, America is whatever the fuck it wants to be!

Re:Lame Gov

[XcepticZP]

Bullshit. Instead of "voting for Republican/Democrat", how about you get off your lazy, fat, McDonald's eating and Starbucks chugging ass and institute a democracy instead of a bi-party republic.

Then you can preach to the rest of the world about "freedom and democracy".

Re:Another reason not to gamble online

[Anonymous Coward]

If you're playing with a real deck, at a real casino.

Who knows whats in the virtual deck you're playing with?

Re:Another reason not to gamble online

[Zocalo]

Actually, there are no house odds in poker played with a real deck of cards. For anything involving a computer (or mechanics, historically) it's just a matter of how you implement the game.

Wont work.

[wonderboss]

They may successfully grab the money of these unfortunates, but then people will stop depositing winnings in US banks. The internet does not respect borders or jurisdictions.

Re:Wont work.

[MrMista_B]

Governments, however, do. And are able to monitor such activity. Having your house seized as 'proceeds of illegal activity' is something that would very utterly negate the benefit of using offshore banks.

Re:Another reason not to gamble online

[Pulzar]

It's poker, you're not playing against the house. There's no reason to skew the odds.

(Before somebody else says it, yeah, they could try to generate "action" hands to increase the rake. They could make weaker hands win more often to keep the fish around. This is a much harder thing to do undetectably than have the house win 10% more often in blackjack... with all the software available to keep track of and analyze all hands played, it's easy to spot any irregularities in randomness. I doubt that it's worth the effort to try to develop an undetectable skew in probabilities... Not to mention that if you screw up and get detected, your gold mine will be deserted the next day).

Saw it Coming

[Renraku]

Honestly, I wondered why this hadn't happen sooner.

Now, instead of the people taking a risk of getting cheated out of their money, they 100% did get cheated out of their money.

The companies should be allowed to pay-out what has already been accumulated, but no more after that. There's no guarantee whatsoever that the gamblers themselves weren't going to pay taxes on the money that they won.

Re:Another reason not to gamble online

[Anonymous Coward]

you're not playing against the house

Assuming that the other three people at the table aren't "the house", and that their computers don't tell them what cards you have, etc. etc.

Re:Another reason not to gamble online

[NFN_NLN]

There are no house odds in poker.

Sure there is. There is a 100% chance the house will take a rake. Those are pretty favorable odds if you ask me.

Re:Another reason not to gamble online

[clem]

It's poker, you're not playing against the house. There's no reason to skew the odds.

For all one knows, one could very well be playing against the house. Any guarantee that one or more of the other players aren't automated agents there to pull in winnings for the casino?

Re:Another reason not to gamble online

[panthroman]

Unlike homeowner's insurance, where you ARE playing against the house. Or car insurance. Or the state lottery. Or mutual funds. Or health insurance.

We manage risk all the time, and happily pay people for the privilege. I've never understood why poker got such a bad rep.

Re:that's what you get for breaking the law

[Anonymous Coward]

And somehow gambling isn't rigged in Las Vegas?

They don't build billion dollar casinos from winners.

Re:that's what you get for breaking the law

[geekoid]

I know that, but it's online. You know you are playing against real people how? you know the computer isn't feeding you a 'good' hand and someone else a better hand? how do you know the computer doesn't change the hands you can't see dependant on the pot?

You can't. And since they are over seas without regulation you have no way of knowing.

SO you get the normal house pot, AND the winning from some other player.
It's a trivial scam. Considering the history of gambling houses, and shady people who use the internet it's a risk.

I wrote a poker software package that did all that for SnGs in 99.
Trivial.

Re:that's what you get for breaking the law

[lorenlal]

Furthermore - As someone who used to partake in the online casino gambling industry (as a participant):

Most online gambling might be an outright lie. But in the case of online poker, the house took a rake, just like in the real casino. In fact, I managed to even cash out a few winnings before I lost interest, and then it became illegal. It was *possible* for the online casino to have a ringer that got stacked decks... But I seriously doubt that any of the mainstream sites would use that tactic especially since there was:
1) A metric F ton of competition from other casinos.
2) The cash they raked anyway was pretty darn good.
3) No risk on their part... They just needed to provide a service.

I was absolutely shocked that all online gambling was banned... until I saw that casinos and racetracks were the primary fund^H^H^H^H beneficiaries of the law. But IIRC the real selling point was that it was treated as unreported income for most of the users. That translated directly to lost tax receipts. I personally thought that the govt could have worked with the sites to find a way to slice off some of the winnings, or to get the sites to properly report losses and gains of the members. I'll assume that the reason they didn't was because the sites were mostly offshore.

Re:Let's push poker underground too!

[DerekLyons]

Wait until those same people with gambling problems get in front of a loan shark, or shot because they can't pay.

So, prior to the 'net, how many people were shot in the D.C. area per annum because they couldn't pay?

Re:Another reason not to gamble online

[hedwards]

The house isn't going to do that, it's not in their best interest to cheat in games that are designed to be in their favor.

Employees on the other hand have been caught scamming, I remember a while back that an employee was fixing games by revealing the opponents hands to his friends. That went on for a while until the house took notice of the unusual winning streak and figured out what was going on.

Re:'Cause THIS is clearly the highest priority

[phantomfive]

You're the second person who has said something like this. You do realize that the federal government has millions of employees, and is in fact capable of focusing on more than a thousand things at the same time? It's not like budget-planning is being put off to focus on this, or President Obama personally ordered it himself. Someone down the chain thought it would be a good idea. It's a weird idea, but at least this will bring some attention to the issue.

Re:US v. $124,700

[ObsessiveMathsFreak]

Your morals already have a poor reflection. You've spent your time going over the pedantics of civil vs criminal and spouting latin terms that you've completely set aside the fact that peoples property is being taken from them, by force, without fair trial or just compensation.

I don't care if they're drug dealers. I really don't. I don't care if they're murdering peodophile terrorists. A court should not be able to take away their property with proving that it was ill gotten. Currently, the owners have to prove it wasn't, if they even get a chance to do that.

What's the logic behind this? To win the War on Drugs? Boo hoo. I'm a teetotaler and I don't give a flying fig whether people get high on alcohol, cannabis, cocaine or heroin. It's all the one to me. But so are all defendants. I don't care how evil anyone thinks they are. Justice for all means justice for all, not for people you think deserve it.

These comments are just stupid

[Canberra Bob]

Reading through this it is amazing the ignorance shown in a lot of the comments.

To elaborate - I will come out and say it. I play poker professionally online. Mid stakes limit hold em to be precise. Firstly, I have been paid in full every time I have made a withdrawal. There are PokerStars offices (yes, real offices, with people working in them) in many countries around the world. I have bought many items, including cash bonuses, through the site store. I have received every single one (including the cash) in a timely manner and have not once had an issue. International freight is via DHL and usually arrives within a week (with no charge on shipping to me). The statement that you will not get paid just shows pure ignorance of the subject. I am sure there are some dodgy sites out there, but there are many dodgy sites out there in other activities too. I suppose you should never buy anything off a site because there are some dodgy sites?

As for fair or not, let me continue...

You can purchase quite sophisticated statistical analysis software for poker. Most (possibly all) professional and serious amateur players use it. It will break down every single part of all the games you have played and you can pull numbers on almost any conceivable situation you have ever been in to find flaws in your game ("leaks" in poker jargon). The data is stored in a PostgreSQL database for you to access if you care to write your own front end. This software stores every single hand I have ever played in. Included is analysis that shows if you are running "lucky" - you can prove mathematically if you have been "lucky" or "unlucky" with how the cards have come out - that is - if your results are skewed due to the cards being dealt giving you statistically more or less wins than you should have on average. There are some VERY smart guys playing (as one would imagine with the money that is at stake) including pros who have post grads in statistics, finance etc. I personally studied electrical engineering and am currently doing some stats study on my own to improve my game and move my play towards the holy grail that is Game Theory Optimal (which may not even exist in multi-handed poker due to incomplete information). These guys are not some country yokels who have no idea if they are being duped or not.

As for bots...
Firstly, I invite you to put your money where your mouth is, get a bot and play some mid stakes or higher multi-way poker (6-max or full ring). Your bot will be crushed. Period. Yes I know about Polaris (the University of Alberta bot which can match it with the best heads up limit players in the world). A few points to note. This is for heads up limit - more players than 2 and the game becomes exponentially more difficult for a bot to play. Bots are not all conquering in the poker world as some assume, a good player will crush almost any bot. Unlike other games poker is a loooooong way from being solved (if it can be). As for collusion, this happens unfortunately from time to time (as it does in a real casino) but there are protection mechanisms in place against it. Firstly, the sites employ poker and statistical specialists who have no other job than to keep the games honest. You can see if someone is playing statistically better than they should. Added to that, as a professional player many can quite easily spot when people are colluding on the table. If someone is caught cheating they have their entire playing account funds frozen and anybody who has played against them has their money refunded.

I have played pro live and online. I play online as I can get multiples more hands per hour against weak player in than I can in a live game. Also the rake is a small fraction of what I pay live. The only ones who say "omgz online is rigged" either have no idea what they are talking about, or are players who just suck at poker and instead of working on their game find something else to blame for why they always lose.

Plenty more to say but that will do for now...

The point of drug laws?

[BancBoy]

I thought the point of drug laws was to punish people for choosing non-corporate recreational drugs. This Bud's for you! That bud growing over there? We'll lock you up for that...

Absurd

[Anonymous Coward]

The UIGEA is bad enough (amazing that it could pass) and this is just becoming ridiculous. People have a right to use their money as they see fit as long as it does not invalidate the rights of other individuals. Spending money on poker is a personal choice. It's true that some people lose money doing so but it's their own fault and we should not be made to pay for their mistakes. What's next, if a couple goes on a vacation they truly can't afford we will outlaw vacations? Moreover, poker is popular and growing. All this is doing is creating more problems and an underground movement that will not be pretty. For example, No-Limit-Hold'em is illegal in San Jose (yes, those idiots actually decided what games they'd like you to gamble in with your own money), but do you really think it isn't played for big stakes?

Finally, poker is not gambling in the pure sense. There is AT LEAST 25% skill and over time, better players just win much more and lose less. 25% is a very large degree when you consider that in just an hour you may play 40 or more hands. It's not chess, but it is a rational game. It's far from bingo, slot machines or the lottery. Good poker players play when they know they have an edge and make plays that have positive expectation. Some of them, like Ed Miller are actually Harvard graduates with degrees in mathematics. Many of them even say outright that they are not gamblers and have never played a slot machine in their life because they know that it has negative expectation and is a mathematically losing situation.

The government cannot and should not regulate this. It's making a mockery of our tax money, capitalism as well as the idea of personal responsibility.

As usual, the discussion is missing the point.

[ThEATrE]

While I don't play poker and consider it a vapid waste of time and energy better spent on doing something productive, I will say this. To everyone replying that the government is "wasting time and money" and is suggesting that there more important matters to be concerned with than shutting down internet poker. I will remind all of you of a seldom talked about and suppressed fact about our society. In a society as civilly disengaged, disillusioned, propagandized, and atomized as ours, the government will be able to get away with continuing and escalating their ongoing efforts to continue shaping society in the current negative direction by keeping up with their current and developing new means of doing what it does: engaging in social control while multinational unaccountable private tyrannies have their way with us.

Re:Just splendid...

[gujo-odori]

Where it gets really bad is that there are just soooo many crazy aggressive players in online poker these days. My wife is a pretty decent poker player (where "decent" is defined as consistently making money at it), but the crazies have made it a lot harder than it used to be. In a heads-up game they aren't so bad - she had a game last week where the dude's strategy was to go all-in pre-flop on every hand. Happily, the genius kept on accepting rematches for quite a while. He eventually gave up, but she'd beaten him 80% of the time. I guess he finally got tired of handing over his money.

The hard part is when you get 3 or 4 people at a full-handed table who'll literally play any two cards. Any one person like that will lose against a decent player most of the time, but when you have several of them, the chances of one of them hitting the crazy hand become a lot higher and they become a pain in the ass. Overall, these donks have got to be losing money, but they make it a lot harder for people with skill to make money.

Things didn't used to be this way, even a year ago. My pulled-from-orifice theory is that more and more people are watching poker on TV and figuring that's the way you play, without realizing that televised WSOP is just a highlight reel with commentary, it's not the whole tournament. It's especially bad when they see people like Kido Pham, who really is a hyper-aggressive player and is highly skilled enough to be fairly successful at that style of play. The concept of trying to actually be a good poker player seems utterly lost on this latest crop of noobs; to them, it seems that poker is nothing more than a slot machine handle.

Sadly, anything that becomes popular usually becomes worse.