Wednesday, January 17, 2007

Online Poker in the US Takes Another Shot to the Kidneys

It's been posted everywhere by now, but two of the founders and former directors of Neteller were the latest to get pinched by the feds while traveling separately in the US, and are currently being held and investigated for money laundering and with the intent to promote illegal gambling, with each facing a maximum of 20 years in jail.

Early reports aren't promising as far as the effects of the arrests, with all InstaCash deposits being disabled by Neteller, and individual sites such as Bodog reportedly no longer allowing deposits using Neteller in any form. Neteller is publicly traded on the LSE and, at their request, their shares were halted when news first came out regarding the arrests, as they knew it'd be a bloodbath for their share price (and market cap) if they allowed their shares to trade.

Coming on the heels of Pinnacle exiting the US market at what is one of its most profitable times of the year (Super Bowl), the future ain't too bright for online poker players in the US. It's definitely not time to nail up the coffin but it's also rapidly approaching the point where people have to admit, finally, whether they like it or not, whether it's riduclous or not, that the passage of the UIGEA is going to have a huge effect on the ability of US players to play online poker.

Assuming that Neteller pulls out of the US market completely (and this is looking more and more like a foregone conclusion), many people are currently shrugging their shoulders, saying So what?, and vowing that there will always be another electronic funds processor out there that they can use. Not only is that a sloppy, shortsighted vow, but it doesn't get to the real issue here.

While some players may be dedicated and savvy enough to hop from processor to processor, it's not those players that are feeding the online poker world, from the bottom up, and pumping new money into the ecosystem. Pretend for a minute that for whatever reason all deposits to online poker sites ceased, for forever, and that no new funds were introduced. How long do you think the current conditions would continue at Stars and Full Tilt? How long before the losing and marginal players went busto, games tightened up, and total players on the site plummeted, impacting your ability to find good games whenever you log in, causing many players to finally give up and throw their hands in the air, speeding up the death spiral? 'Tis just a wild-assed guessed, but I think it'd happen very, very quickly. Even as quickly as a month or two.

Removing Neteller from the ecosystem is, in many ways, closely akin to the above doomsday scenario of no money flowing in at all. People seem to think that if Neteller exits stage left, they'll simply sign up somewhere else, with a similar service, which, if it doesn't exist now, will be launched in the near future to replace Neteller.

Umm, okay. Which one? FirePay has already fled, so you're looking at services like ePassPorte and Click2Pay or InstanteChecks, and all of those are almost certain to roll over now and pull out as well. If any processor was going to weather the storm and stick it out it was Neteller, and they're already rolling over.

As far as new services springing up or a someone buying out Neteller and taking it private and maintaining the status quo (despite the risks made patently obvious in the last few days), well, sure, who knows what the future will hold. Not me. But I can't help but think that you're grasping at straws when you can't even hang a name on your potential savior.

Poker sites will likely still offer the ability to deposit/withdraw via paper checks, but that's just delaying the inevitable death blow, as that's just not a viable way to provide the necessary influx of new money. Remember, it's getting new money in, quickly, on a regular and consistent basis, that's the real key to whether or not online poker in the US can dodge this bullet. Sites could offer withdrawals only by burros carrying packsaddles filled with gold bullion and it wouldn't impact winning players, who are more than content to patiently wait for their donkey to arrive at their front door. Those players don't matter, though. If anything, they'll speed the demise of online poker in the US, as they'll be extracting a proportionally larger amount of the available cash floating around in the poker ecosystem, if the influx of new money slows.

At this point, I'm not sure what can save online poker as we know it. You'll still be able to play, at least at a few sites, but it may be a radically different game that you're playing, as far as a much more social endeavor, sort of like online bingo in its current state, where many people are drawn by the ability to chat and interact with virtual friends, and the actual money at risk is relatively insignificant. If you depend on poker for a substantial portion of your income, you're going to have to work much, much harder for that money.

(Stepping back a bit into grunt-monkey land of personal opinion, all of this really fucking sucks. I try not to take for granted all of the benefits involved in living in the US, because there are a ton of them, but this particular period of US history is one I'd really like to forget. Politicians of every bent and party affiliation have displayed the ability to be superlative, crooked as shit, and mediocre in every way, so I pretty much view all that as a wash, but I'm so fucking ready for the current climate to shift away from the current crop of conservatives that feel perfectly comfortable legislating what adults of an age of majority may do, whether it's marry, play poker online, or give birth.)

6 comments:

Pokerwolf said...

If you think that things will change when the "conservatives" leave and the "liberals" move in, you're crazy.

Politicians are all alike. If they're given something that provides them with power, they'll keep it around and use it. That's why things like the PATRIOT Act are still around instead of them being either defined with more details or completely stricken from the law.

ScurvyDog said...

Pokerwolf,

I nearly left off the parenthetical at the end, as I know better, but I'll bite, because I'm full of coffee and haven't argued politics in awhile.

I'm in favor of privatizing Social Security. I think raising the federal minimum wage was a knee-jerk, wrong-headed move. I believe people should be able to own as many guns as they want, for any reason. I believe tax cuts and incentives for businesses are a more effective way of stimulating the econonmy than handing out welfare checks. I'm in favor of the death penalty. Of the candidates that have thrown their names into the hat so far, I'm most likely to vote for McCain in the next presidential election. I object to the way we have implemented our presence in Iraq, but I don't object in principle to the fact that we're there.

Using the convenient labels, that probably makes me a "conservative" and not a "liberal". Okay, fine. I won't holler at that.

With the exception of the death penalty, there's a common theme to my stances listed above. It's a pretty simple one. Legislate and mandate fiscal and foreign policy all you want, because that's what you're paid to do, but leave your opinions on how people should live their personal lives the fuck out of the equation. Especially when they're driven by religious beliefs.

Which is why I'll probably always be a "liberal". Chase power for the sake of power. Use it for your personal gain. Get massive pork projects allocated to your gome state in order to ensure you're re-elected. That's all fine. It's how both sides play the game. It's not optimal but there's no optimal system. All I ask is that you check your personal beliefs at the door when you enter the legislative arena, as far as whether or not men can marry men, if abortion should be illegal, or whether or not I should be able to deposit $100 at Full Tilt and play poker for real money.

Politicans aren't all alike. We're currently in a pretty unique period of our history as a country when our supreme commander makes some decisions that are not based on his experience, intelligence, or advice from advisors; he makes some decisions based on what he believes God wants him to do.

No matter what religious or political bent you are, that's a pretty fucking scary proposition. Unless, of course, you share his particular religious beliefs.

I don't think the "liberals" are going to save us. But I'm pretty sick of the "conservatives" kicking in my front door and telling me what is moral and immoral, what I can or can not do in my personal life. Given those options, I'll always take the "liberals", even if they have no real plan of extricating ourselves from Iraq or a sound fiscal policy to start chipping away at the deficit and somehow salvaging the creaking, groaning Social Security system.

Anonymous said...

My knee-jerk reaction to all to the UIGEA and Neteller arrests is one of: online poker is F'd in the A.

Long term, I don't know what's gonna happen, but I will say that I'm mighty pissed that the whole online poker thing is going tits up just as I'm coming into my game.

I'm going to keep playing for now and re-evaluate as things continue to get worse...

Anonymous said...

I threw my last scraps into Stars and FT last night...

... I'm wondering if I shouldn't just withdraw it all and start writing about my adventures on the play money tables.

Michael said...

"If you think that things will change when the "conservatives" leave and the "liberals" move in, you're crazy."

Maybe or maybe not, but I'll take my chances with the liberals. There's no hope for change with the current stable of so-called conservatives.

Anonymous said...

I the words of your current promo for Australian tourism, "Where the Bloody hell are you?"

Things in Australia are going the other way in regards to Poker and online gambling in general. Shit, at the heart of our culture is that we were founded as a penal colony and gambling is ingrained in the blood.

Joe Hachem is a national hero; the biggest celebrities are jockeys, horse trainers and gamblers. The state governments rely on pokie taxes (slot machines) for $1.5B+ per year each for their state budgets. Betfair has just been granted a licence in Tassie...half the US celebs are paid big $$$ to come and be part of racing carnivals or promote beer, Australia’s richest man, James Packer is focused on Casinos (he owns Crown in Melbourne)...and we are basically a de-facto state of the US.

So, come on over!