Jon Katkin

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OP-ED

Spend enough time around the professional poker circuit and you’ll quickly realize that it’s a very small and incestuous group. Players and media members spend hours, days and sometimes weeks together in casinos and card rooms around the world and, as expected, the close quarters inevitably lead to friendships (and, sometimes, more) between the two groups.

This is perfectly normal and, quite frankly, not a big deal in most cases. A poker pro sharing a drink or a meal with a player can be beneficial for both parties. And, so long as clear lines are kept between professional and personal relationships, there’s no real issue. When the lines are blurred, however, things become less clear.

Whether or not friendships affect reporting is irrelevant, because it’s the perception of impartiality that matters. If people paid to report on poker can’t separate personal feelings and biases from the stories they’re covering, how can anyone trust what they say or write?

We’re only a couple of weeks into this year’s WSOP and I’ve already seen plenty of instances where the line hasn’t just been blurred, but erased completely. Specifically, I’m referring to the increasing and increasingly annoying practice of poker journalists openly rooting for their friends during individual events.

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You gotta love the Hardcore Poker Show on Sirius 98 (moving to channel 158 tomorrow) … as they seem to know how to get the right guests at the right time to throw out a few doozies.

On yesterday’s show they talk to Pauly — one of the Top Two Podcasters on Tao of Pokerati — who lets it be known that while player money from PokerStars may indeed be filtering back to American players via US banks … affiliates got a form letter saying they would not be paid, and I think it sounds like he’s saying they have no intent to in the near future or ever.

Check with the Tao of Poker to see if he (or someone else) posts this letter. Until we see it I can’t know if Pauly — who removed his PokerStars affiliate banners — is simply speaking the aggressive truth or just playing squeaky-wheel hardball or both. He is a New Yorker, after all — from the Southern District no less!

UPDATE: He has posted it.

Tony G, the owner of PokerNews is next on the show — and really, for all the voices that have been clamoring since “Black Friday”, he’s one of the biggest names in poker with a direct connection to the money-flow from Full Tilt, Stars, and others to do an in-depth, candid interview.

Here’s a clip from the show to give you a taste.

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And click here for the whole episode.

Controversial for sure … but his words seem to be less publicity-whorey than usual. The G says any American depositing money on any site is high-risk, and payout could be unlikely. While believing that Stars seems to be making good, he sees signs that Full Tilt accounts could be in greater jeopardy — and calls out Howard Lederer and Phil Ivey specifically to address the issue (either in public or private) and possibly offer up their personal assets to take care of players.

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You may or may not have seen the report Barclay’s put out assessing the impact of American DOJ actions vs. Online Poker on the European online gambling sector. Now Moody’s, the venerable global credit rater, has put out their own assessment of how the shutdown of Full Tilt and PokerStars in the US affects high finance and various state economies.

At least I think that’s what they’re saying … but a few things that stood out to me had more to do with what this report reveals about the perception of poker, both as a game and a needle-moving industry, including:

• “Online gambling is no real threat to U.S. land-based casinos.”

So it’s official now. The rest of the world gets what poker people knew in 2006.

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All have heard by now about the constantly streaming broadcast by the Quadjacks crew … but before they existed, and perhaps giving them credibility from the get-go, the crew at Donkdown were the originators of raw poker radio. We used to never give much credence to anything live … if I couldn’t listen at my own convenience in podcast form, what was the point?

I’ll have to reassess my internet radio philosophy after the Pokerpacolypse dust settles … but in the meantime, I’m waiting in the wings now to go on the show where no one is supposed to be able to get away with any BS, but in exchange, anyone can get a say.

Should be a fun episode as some semblance of sensibility is starting to emerge. I suspect to be called out rather harshly for running an op-ed from a former UB lawyer telling people their money is presumably gone forever the day before the DOJ said they could get it back. (Clearly they’ve been reading and listening and didn’t want me to make any wagers, so thanks guys, for putting out such a statement before it was too late!)

Donkdown Radio Live. Listen here.

Most of you have heard about the Radio Free Poker discussion going on over at QuadJacks/UStream. But if you get a chance, step away to listen to this week’s 2+2 PokerCast. (Sorry Marco for redirecting listeners … but don’t worry, they will be back.) I got to be part of a rather good lineup of informed voices answering Mike and Adam’s thoughtful questions.

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(And LOL when they refer to the lineup on the QJ never-ending stream as “the cast of Rent”.)

I show up at about the hour-and-a-half mark. But others on the episode (most of whom I’m looking forward to listening to, too) include:

Bill Rini — the old-school blogger and early poker-boom programmer, who btw was having a lot of really insightful posts in the week or so leading up to Friday, and has carried on from there.

I. Nelson Rose — one of the foremost authorities on gambling law in the United States. Be sure to check out his latest … an assessment of our current sitch, where he sees, too, the timing of the online poker indictments as “suspicious”.

Todd Terry — Manhattan attorney turned online pro. I think Jess has told me about this guy.

Mason Malmouth — the non-Sklansky of 2+2. Wrote a book or something.

Tonight I’m carrying on the Pokerati’s vigorous rambling with Gahagan, as we record Rabbit Hunt. And then back to Donkdown Radio (more LIVE stuff) where it all began on Wednesday.

Like seriously, how hooked up is anyone about to embark on a long road trip or do lotsa chores around the house?

Sanford Millar

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OP-ED

There are two actions pending against online poker companies in the Southern District of New York — an indictment of individual defendants, and a civil forfeiture complaint against the companies. The civil forfeiture complaint seeks forfeiture of all assets of the defendants, including specified domains and bank accounts.

There have been several civil and criminal forfeiture cases brought by the DoJ in recent years, including Daniel Tzvetkoff’s and Douglas Rennick’s (which are the original and first superseding indictments in the current case). Similar forfeiture cases have also been brought against other payment processors, but in none of these cases, as far as I know, have the Poker companies filed claims objecting to the seizures. Also of note is that no players made claims either.

Any player who makes a claim [for their deposits] should expect criminal inquiry by the FBI and IRS, and would not be able to recover on provable claims for some time. If the Poker companies default on the civil forfeiture, players will have no real legal recovery.

For the purpose of filing Foreign Bank Account Reports, some players may have taken the position, consistent with the position of the IRS, that they are general unsecured creditors in a common pool fund of deposits, and as such have no control or discretion over the investment of the funds. If this position is correct, then the DoJ’s forfeiture claims may have legs, as there may be no players to come forward able to make the specific factual statements necessary for a bonafide claim. Further, in order for the Poker companies to make claims, they likely would have to submit to jurisdiction of the U.S. and open their books and records to the DoJ and IRS among others.

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Jon Katkin

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OP-ED

The DOJ dropped an A-bomb on the online poker industry Friday, and, as you’d expect, the impact was devastating. Within hours of the DOJ’s indictments, PokerStars and Full Tilt Poker had shut down real money gaming in the US, effectively killing online poker and leaving millions of customers with nowhere to play.

And while the sites are scrambling to readjust to a world where approximately 40 percent or more of their business just disappeared and mount legal defenses for themselves and their executives, the fallout from Friday’s bombshells continues to spread far and wide from its epicenters in Dublin and the Isle of Man.

I could go on, but I’ll just end up depressing myself and that’s no fun.

While Full Tilt and Stars were certainly the two biggest poker sites operating in the states, their reach extends far beyond the virtual felt. Until Friday, these sites were the drivers of a whole industry that revolved around their players, television programs and live tournaments around the world. With the sites gone, the poker economy they supported is sure to follow.

As I write this, a number of my friends are getting trashed on Pisco Sours down in Peru, where they’re covering the end of an LAPT event for PokerStars and PokerNews. The sad fact is, though, this may be the end of poker reporting as we know it.

Providing live tournament coverage is expensive and resource-intensive, and sites like PokerNews can’t exist without financial underwriting provided by sites like Stars and Tilt. With those players now out of the US market, there’s no reason for them to be spending resources on tournament reporting when that money can be better spent on the high-priced legal teams they’re undoubtedly going to need to put in place. Bottom line – that WSOP coverage that everyone has been gearing up for next month probably isn’t going to happen.

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A few interesting things have taken place since the implosion of online poker we’ve been warning you about here at Pokerati for about nine months became a reality.

We’ll save the 9/11 comparisons for later — because no one has died yet — and it’s just kinda coincidental that the DOJ has 9 charges against 11 defendants. But there seems to be a need for people to talk through these matters openly and honestly … and in kinda an organic way, the few truly independent operations (that don’t rely on Stars, Tilt, or UB for their existence) have come together to fill that void.

What began with appearances on an “EMERGENCY EPISODE!!!!” of Donkdown radio has migrated to a 24/7 live podcast put together by @AgentMarco from QuadJacks.

It’s been a rather loose-aggressive media emergence … with old-school cooperation in play. Pokerati has taken part … Tom Schneider, myself were on for the first few hours, Mark Gahagan is on now, and I’m about to rejoin to share some new information. Others that have been on have included Dutch Boyd, Scott Matusow, Micon-Brandon-and-Dandruff from Donkdown, The Maven, Kevmath, Pete the Blunt-smoker, Thomas the Rapper … as well as just regular ole online poker players sharing their stories about how a “little” government action has greatly affected their lives.

Anyhow, blah blah blah to infinity … the podcast that won’t stop is still going on — they’ve been going for 48 hours so far, with no sign of stopping, even if Marco eventually needs a nap. More than 1,000 listeners at this moment, so check out the chat room and keep it on for background music. Here’s the link:

http://www.ustream.tv/channel/day-2-qj-live-show

Funny how once the concept of “conversions” stopped mattering, 24/7 poker radio could finally emerge.

The first visible indicator that we will be able to see after Friday’s indictments might be coming up in just a few hours. The National Heads-Up Poker Championship is the first new show to air in this new online-pokerless environment in the United States, with its debut episode set to air at 12p ET on NBC.

Could be interesting to see what the advertisements during the broadcast are. If the network’s a bit slow in reacting it might be one of the last times we ever see a FullTilt or PokerStars advertisements on American airwaves. With the exception of a few WPT episodes in production or already in the can, it will almost certainly be one of the last times we see so many patches from the companies involved in Friday’s indictments on players.

The most troubling possibility is that it would not air at all. Sound ridiculous? Consider the following: Kevmath had a retweet late Saturday night in which @buckwild33 noted that a scheduled WSOP Main Event 2007 marathon was not airing and boxing was shown in its place.

While it would certainly be a stretch to try and correlate this change in broadcast schedule on ESPN in some way with the upcoming NHUPC broadcaston NBC, it certainly should not be dismissed outright. There will be several small milestones that come up periodically in the coming days, weeks, and months, and we who are most affected might want to pay attention to their outcomes.

The information that we may be able to get from these indicators could provide a significant portion of the information that comes our way as things progress. Both the sites and the DOJ are likely headed for a process that is going to go very slowly, and information will trickle out slowly.

Again, this is just the direction that my thought process brought me in, and I don’t claim to have any information that is unavailable to everyone else. I think the NHUPC is at least an interesting talking point and the first small event in a series of events that will eventually have effects on millions of people around the world. Now is the time to keep your eyes open.

On a side note, it’s interesting to see how the title sponsor of the NHUPC, GoDaddy, could be the least toxic element at this point in time. Who would have thought two weeks ago that Godaddy’s CEO’s elephant hunting fiasco would become old news so quickly.

We showed you the 52-page criminal complaint — 9 charges against 11 individuals facing between 5 and 30 years in prison. Now here’s the 80-page civil complaint in the DOJ vs. PokerStars, FullTilt, AP/UB, et al:

http://www.scribd.com/doc/53170382/3bb-Civil-Complaint-DOJ-vs-PokerStars-Full-Tilt-UB-AP-et-al

The Feds’ allegations tell a rather compelling narrative of illegal gambling, bank fraud, money laundering, and conspiracy to circumvent US law — that if proven calls for the forfeiture of not just domain names, but also:

$1.5 billion from PokerStars
$1 billion from Full Tilt
$500 million from UB/AP

The court documents also spell out the details on the 76 bank accounts money allegedly passed through … in multiple countries and currencies, making USA vs. PokerStars+ not just a federal case but also an international one. And with the US Feds seeking to freeze these accounts, industry types get a hint of which Stars- and Tilt-funded paychecks may soon be in jeopardy … if they aren’t already.

With the criminal indictment and civil complaint together, federal prosecutors Arlo Devlin Brown and crew, seem unafraid to telgraph their intent: People have to go to prison and we take their money, but if that’s not gonna work, we’re at least gonna get $3 billion guaranteed … and we now have two tries to take it down!

(I use the term we because these cases are technically “the people of United States of America vs.” … thus it really is you and I and my dad and grandma and her priest and the electrician and Bristol Palin and Justin Bieber … claiming that all those online poker spoils are rightfully ours.)

The regulated online poker-only “Reid bill”, if you recall, promised to generate $1 to $4 billion a year for the US government. So you gotta figure $3 billion in forfeitures buys another year for the forces who do wanna see fully legal licensed and regulated online poker — and other casino games — to craft a bill to their liking.

Poker players (who tend to bitch the most?) love to hate on the Poker Players Alliance, the most vocal of DC advocacy groups for poker-related matters, and, obv disclosure, an advertiser of ours here at Pokerati. Discern for yourself my own possible bias, but they are merely a small player in the DC poli-poker game. The AGA, for example, also wants to see legalized online poker (and other casino games) … but they are not voicing any protest.

Strategic decisions notwithstanding, the PPA sees the federal indictment of close associates to some of their board members as an attack on poker, and are positioning themselves as a rebel poker alliance.

That’s my take, not theirs, on the video statement put out by their Executive Director John Pappas. And below is additional statement from the PPA that many players have been clamoring for.

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Not their funniest effort, but expresses the insta-change in the poker world well. Some things are just made for cartooning: