Why California Needs Online Poker
TL;DR: Online poker is already easily accessible to any American with a credit card or access to a Bitcoin wallet. Most of the “companies” (unknown ghost corporations) that currently provide online poker to American players have built in layers of exploitation that play off of gamblers’ addictions and have little to no accountability to provide fair games. This is evident by the statistics of hands at these different poker rooms. Likewise, these offshore companies are taking billions of dollars a year out of America and are paying nothing in taxes or tariffs.
Background
This blog post is written from the point of view of a software engineer/data analyst that has a substantial gambling addiction (mainly poker/sports betting). This article is meant to explain my own personal grievances as an addicted online gambler and why I believe America (California specifically because it is my home state) should legalize online poker and sports/daily fantasy sports betting.
Why should we legalize online poker? My Top 5 Reasons for California/USA Legalization
- Online Poker and Sports Betting already exists and is easily accessible to American players
From my own personal experience, I have wagered over $25,000 during the past year at multiple online casinos and poker rooms. Most notably, I have played poker at Bovada, Ignition Casino, BetOnline, SportsBetting.ag, Americas Cardroom, BlackChip, etc. I have also wagered online sports bets at bookies such as BetDSI, MyBookie.ag, 5Dimes, and so on.
Today, there are limitless offshore shell corporations that are making astronomical profits by offering online betting experiences to American players. These websites offer large sign up bonuses, deposit multiples, and any type other type of bonus that can lure players to their platforms. These companies can also accept most major credit cards, Bitcoin transfers, wire transfers, Western Unions, and a few other easy to perform transactions as deposit options.
2. Lack of Regulation of current offshore betting options
One of my biggest complaints with the current state of online offshore gambling providers is the lack of reasonable regulation. By reading through any of the above companies’ websites, you will be hard pressed to find any provable source of fairness regulation. Almost every one of these companies is registered with the Kahnawake Gaming Commission. By doing some basic Googling, you will find that this commission is a Native American tribe that sells gambling licenses to any business that can afford one.
One other interesting fact is that this same commission provided licenses to the major fraudulent online poker rooms of the past decade, Ultimate Bet and Absolute Poker. These poker rooms were caught cheating players out of millions of dollars by creating Super Users that could see all of the whole cards at a poker table without other players knowledge. This commission was later notified of this scandal and levied heavy fines against the owners of these companies far after they were caught and proven guilty.
This action still forces me to ask the question, where were any of the basic regulations that you would expect from an online gambling commission during the YEARS that these scams were being committed? The creation and execution of these fraudulent activities should have been very evident by the data and system traces that they left behind. These scams were so evident, a small group of players were able to detect the bad level of play almost immediately. If the regulatory committees (such as the Nevada Gaming Commission) that are behind the active casinos here in America had a chance to look over the logs from these companies, I guarantee that they would have noticed something wrong within days, not years.
3. Financial Opportunity for local government/economy
My second biggest complaint with the current online offshore gambling providers is that they are moving large amounts of money outside of the United States. One argument that I heard a recent California politician make against online poker is that the taxes made by legalizing online poker would not out weigh the amount of money that would be taken out of the economy and put in to online casinos pockets.
My argument against this statement is simple, the money that would theoretically be taken out of the economy is already being taken out. Even worse, this money is not only going towards the pockets of owners of large corporations, it is going towards the offshore casino greed mongers outside of America. This means that the money being moved out of the country has no chance of ever being recycled back in to our local economy.
With legalization of online poker and sports betting, I believe that there is a huge opportunity to stop the drain of billions of dollars (yes, billions of dollars are being spent through these online offshore casinos yearly) that is flowing out of America with zero taxes/tariffs being paid. The online poker/betting industry could be highly regulated and highly taxed. These taxes could go towards massive improvements in education and basic infrastructure that is currently not possible due to the lack of funds.
4. Gambling Addicts are being exploited by offshore companies with no reason to care
Gambling addicts have it the worst with the current state of online gambling. There are a large number of betting options, with large bonuses and easy depositing options that are not regulated and have no ties to the people that they are collecting money from. That just reeks of opportunity for taking advantage of an addict.
These offshore gambling companies are nothing more than heroin dealers supplying a fix to their paying users. The complete lack of regulation has given these companies free reign to create different illegitimate techniques to create larger user bases that pump more and more money in to their platforms.
As a poker room, that is the general goal, bring as much money on to the platform as humanly possible. By bringing in more deposits, more hands will be played, and more rakes will be collected. Rakes are the % of each hand that the poker room takes as their fee. The more live money that is being played, the more the poker room gets to collect.
In order to boost this number, offshore online poker rooms employ a few shady tricks. First, they make depositing very simple and they offer very lucrative bonuses. It can take a normal user under 30 seconds to deposit $100’s or even $1000’s on to an online poker room. The bonuses offered can be up to 200% of the amount deposited, but they require exorbitant rollovers. A rollover is a multiple amount that must be wagered before the user can withdraw any of their money. For example, an average $100 deposit could receive a $100 bonus that requires a 25x rollover. This means that the player has to wager $2,500 before they are allowed to withdraw any funds. Any regular poker player can tell you that wagering that amount of money from that low level deposit almost certainly ends in a total loss way before the rollover is reached.
One other trick utilized by online poker rooms is the control of the random card (hand) dealing algorithms. These algorithms are not built to deal random cards, they are built to deal from a set of preconfigured hands. These hands are still dealt randomly, meaning that any one at the table could potentially receive the winning hand. However, where this becomes tricky is in the actual statistics of hands. These preconfigured hands are chosen in a way that almost guarantees a large amount of betting from multiple players at the table. By dealing these high action hands more frequently, players will bet more money (increasing the poker room rake) and players will also lose their entire bankroll more frequently. When players go through a large amount of winning cycles, followed by a total loss, they are statistically more likely to redeposit more money to continue playing (on average 5.4 times more likely).
By creating this high action environment, online poker rooms are creating a situation where players are seeing much higher action than they are anticipating (mentally attacking the gambler defect to keep playing to win as much as possible). The bankrupting of these players is forcing a higher number of redeposits than normal, which brings more money on to the card room platforms. This increase in redeposits ultimately means more money for the poker room as they collect their rakes from every subsequent hand.
5. Realistic Options Already Exist
In the online poker/sports betting hell scape that exists today, that are multiple legitimate companies that exist and want to provide a fair, regulated experience for players. A lot of these companies already operate in America, mainly in New Jersey and Nevada. The primary corporations I am speaking of are 888 poker, PokerStars, WSOP, PartyPoker, etc.
These companies have taken the steps to enter the legal American online poker room market. These companies have been operating for over a year, generating tax revenue for the states that they are available in. These companies are already in a working state with the necessary regulatory committees that make sure they are providing a fair experience.
One of the saddest parts of this story is that these fair, legal companies are ready and willing to pay massive fees to enter the new legal markets in states like California. The opportunity exists, the amount of tax revenue that could be made is well documented, and yet there is little to no action to move forward.
Final Thoughts
I really hope that California passes the bill to make online poker legal within the state. As a gambler that has had to deal with these shadowy, offshore corporations for years, I can say that working with a regulated American company that would pay taxes and provide some local good would be a massive step up from what is available today.
Gamblers are still gambling online. It is easier than it has ever been and the options are limitless. The only limitation on these options is the level of corruption that is being employed across the board because these corporations know they can get away with it.
Online gambling in America is in a state mimicking the 1920’s alcohol prohibition and the recent war on drugs. Because of the lack of legal, regulated options, people are resorting to whatever they can get their hands on. These last resort options are taking advantage of desperate addicts and are returning zero gain to the American public. Legalization would take a giant step forward in providing help to these addicted gamblers while also taking the drain of money flowing out of America and refocusing it in to tax proceeds that could be used for public good.
“Prohibition only drives drunkenness behind doors and into dark places, and does not cure it or even diminish it.” ~ Mark Twain
