Diversify My Ass

I read an article the other day on Casino Gambling Web that quoted online gaming legal expert I. Nelson Rose as saying:

I. Nelson Rose, a gambling law expert at Whittier Law School, has told Matt Richtel of The New York Times, that poker players should not give up their efforts to play online. They should just diversify.

“Now, you not only have to find a way to get money to a place you trust and that’s going to be honest,” Rose told Richtel, “you have to get money back and hope it doesn’t get seized.” Rose went on to tell Richtel that the way to keep playing is to not keep a lot of money in any one account, but to spread the money out over several different accounts.

I really, really hope that was taken out of context because that sounds like one of the most defeatist pieces of advice I’ve ever heard. While I’m a huge proponent of diversification no matter what subject we’re taking about it seems a bit naive to think people can spread their money across enough accounts that the financial impact would not put a ding in someone’s results.

How much should you diversify? 25% in each account? Unless you’re getting a 25% ROI one seizure could wipe out an entire year’s worth of gains.

If that really is the best advice that one of the brightest online gaming legal minds can offer then the industry is in dire straights.

As I’ve hinted at since the UIGEA passed your best protection is to have an offshore bank account. If all your online gaming transactions go into and out of an offshore account the money is fairly clean when it comes back to you via a wire transfer as long as you’ve properly declared all taxes on the money.

As an American citizen I fully understand that many offshore banks aren’t jumping all over themselves to offer services to Americans. The recent mess with Swiss bank accounts have made many banks even more cautious in dealing with Americans.

That said, I set up an account in Malta with nothing more than a passport. Literally I walked into the offices of HSBC and up until the very end of the paperwork the woman helping me thought I was a tourist on one of the cruise ships who wanted a Euro account. When I told her I actually lived in Malta she was somewhat relieved that she didn’t have to fill out the additional forms necessary to open an account for an American.

I also set up an account in Thailand with nothing more than a passport and the address of the hotel I was staying at. In under an hour I walked out with a ATM debit card and an online banking account so I could transfer money in or out of any bank in the world.

At the moment I’m still forced to use an intermediary like Moneybookers for withdrawals because the US facing sites I play on don’t believe that they can credit my UK, Malta, or Thai bank accounts because I’m American (they can) but it’s a fairly painless process with the exception of Netller who are crack-head paranoid about every transfer.

When it comes time that the only option available to American players is that they have to spread their money across enough online gaming sites or payment processors so as not to be devastated by the collapse of a single processor then that is the beginning of the end of online poker in the US.

Like I said, I really hope I. Nelson Rose’s advice was taken out of context because I really respect the man and have read nearly everything he’s written publicly about online gaming. However I can’t get around the fact that diversification seems like a defeatist attitude when so many other viable options are still in play.

Photocred goes to schoschie