The eventual and inevitable death of online poker

[BigBaitsim (milo)]

This is how it will happen.

Feel free to save the URL to this post now, as you will refer to it in 6-30 months, and comment on my amazing prescience.

The current administration will attack on one of two fronts. The less likely is that they will go after ISPs as purveyors of smut and/or conduits for gambling, which will lead ISPs to start filtering. What is MUCH more likely is that the government will begin prosecuting gamblers. They will subpoena ISPs for gamblers’ records. This will not kill internet gaming and poker, but will cripple it. The players themselves will deal the deathblow.

We all know that our money is at risk when it is in unsecured accounts. The sites themselves likely do not keep our money in some separate account, only taking rake. More likely, they put the money in an account, and pay out what is requested. Much as George Bailey explained to those making a run on the Building & Loan in It’s a Wonderful Life, the monies deposited are used to pay expenses (in this case not homes, but software, servers and other expenses & profits). Regardless, I strongly suspect that cash reserves do not equal deposits.

So many players who fear prosecution will withdraw money from their accounts. Unlike the run on the Bailey Bros. Building & Loan, they will not accept a portion of their money and a promise of later payment. They will demand their money, and the sites will not be able to pay. Consumers will lose confidence and deposits will stop. With no way to pay bills or current customers, some of the sites will go dark, further eroding consumer confidence in online gaming. The gov’t will explain that the events they triggered were precisely what they were worried about, and will look to the general populace like they are protecting degenerates from themselves, when they really caused the problem through their actions. A few well-run sites will survive and some players will come back, but the industry will be devastated and many will lose the money they had sitting in offshore accounts.

This will not stop me from playing. Even if it happens, I will be losing OPM, and playing online is still +EV, even believing, as I do, that this is inevitable. Hopefully, the fall will be slow, which will allow sites to respond and stay afloat. A run on the bank, however, would be disaster.

Happy Holidays (and yes, the sky is falling, but not yet)

[arod4276]

the internet cannot be regulated,, and anyone that feels it can is foolish to say the least. the only way to slow it down is to stop the payment processors. When they do that ,, stop one,, another will pop up to replace it,, ie paypal,, to neteller ect.

[westmt01]

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the only way to slow it down is to stop the payment processors

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This is the only credible threat, I believe, we face. If the U.S. gov't can impede the funding process, i.e. make it illegal for U.S. banks to transfer money to any site doing business with or in Internet gambling (like Neteller or the poker sites themselves), we are in trouble. As has been noted many times before in the forum, such a scenario would scare away all the fish, and though IG would survive it would become MUCH less profitable. I think we're a long way from this happening though.

I do not see the gov't coming after gamblers themselves. It has far more important things on its hands (like combating terrorism and keeping George W away from dangers such as press conferences and open microphones).

Will the Internet poker fish fry ever end? Probably. But I doubt we're getting close. And there is hope, though very slim, that Vegas interests will get it legalized, regulated, and full of MANY more fish. Hey, I can dream, can't I?

[Dark Force Rising]

My concern is that soon a story will hit the press about some underage kid blowing a huge amount of dough and then blowing his brains out. If this does not result in some radical prohibition then we are good for a long,long time.The addictive nature of the game and societies increasing level of sloth should ensure a bright future. Because of the rush involved with playing for real money it would seem to me that the fish would go to any lengths to fund their accounts.

I have also seen players express concerns about increasingly addictive forms of computer games on the horizon that would divert interest from poker. Howeve,even if you could feel like you were really squaring off with Darth Vader or banging Lindsey Lohan,the desire to gamble would resurface after the Dark Lord gives you a beatdown or Lohans cans are covered with your...well,you guys get my drift.

[BusterStacks]

[ QUOTE ]
the internet cannot be regulated,, and anyone that feels it can is foolish to say the least. the only way to slow it down is to stop the payment processors. When they do that ,, stop one,, another will pop up to replace it,, ie paypal,, to neteller ect.

[/ QUOTE ]

While this is technically true, ISPs sure can be regulated. You have no internet without your ISP, so don't act like the internet is the wild west anymore, cuz it's not. I really think milo is right. We've already seen comcast do it to movie sharers, why wouldn't they do it to gamblers?

[theghost]

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...Vegas interests will get it legalized, regulated, and full of MANY more fish.

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It seems to me that internet gambling is against the interest of B&M gambling establishments, why would Vegas fight for the survival of a competitor?
Perhaps this is small minded on their part, and internet gambling adds to the overall pool of gamblers... or maybe they are of the mindset that they don't want people losing their money at home, they want people to lose money in vegas.

[jrz1972]

[ QUOTE ]
[ QUOTE ]
...Vegas interests will get it legalized, regulated, and full of MANY more fish.

[/ QUOTE ]
It seems to me that internet gambling is against the interest of B&M gambling establishments, why would Vegas fight for the survival of a competitor?
Perhaps this is small minded on their part, and internet gambling adds to the overall pool of gamblers... or maybe they are of the mindset that they don't want people losing their money at home, they want people to lose money in vegas.

[/ QUOTE ]

Theres a fair amount of evidence that riverboat and tribal casinos have resulted in increased demand for Vegas resorts. People try gambling, realize they like it, and therefore are more willing to plan a vacation around it. The paper I'm specifically thinking of was written by Hunsaker in Managerial and Decision Economics (2001).

I'm guessing that internet poker would be very similar. Playing small-stakes poker online probably makes people somewhat more comfortable visiting a cardroom. (Maybe).

[moondogg]

[ QUOTE ]
I'm guessing that internet poker would be very similar. Playing small-stakes poker online probably makes people somewhat more comfortable visiting a cardroom. (Maybe).

[/ QUOTE ]

I agree. I'm sure that WPT/ESPN is helping the B&M poker boom significantly, but I'd say that being able to "practice" online as well has helped it a good deal too. But I don't think that individual casinos are going to take this broad, make-the-casino-world-a-better-place apporach.

However, if it was legalized and regulated, the B&M casinos could jump in the online world too. Their main beef with online gambling is that it's a market in which they can't participate legally. I'd think that if Harrah's or Ballys/Park Place were able to throw their hat into the ring, they could knock Party on its ass.

[Sarge85]

[ QUOTE ]
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...Vegas interests will get it legalized, regulated, and full of MANY more fish.

[/ QUOTE ]
It seems to me that internet gambling is against the interest of B&M gambling establishments, why would Vegas fight for the survival of a competitor?

[/ QUOTE ]

Because they are not competitors in the truest sense of the "Capitalistic" word.

McDonalds and your favorite 5 star restaurant both sell food - but to say they are competitors is a misnomer.

Sarge[img]/images/graemlins/diamond.gif[/img]

[Cardzy]

It seems to me that some B&M casinos are encouraging and possibly getting ready for it, such as the Bicycle club.

http://biz.yahoo.com/iw/040921/072909.html