F-Train's Analysis - A Search for a Victim

I was reading F-Train’s analysis of the charges brought against Stars, Tilt, and Cereus and while 90% of the time I think he’s dead-on, this time I think he’s letting his emotions get in the way of seeing things from a practical point of view. In his piece The Search for the Real Victim he tries to make the case that all of the crimes are victimless.

By that same reasoning selling people marijuana is a victimless crime. There are many things that are illegal which it is difficult to prove that a victim exists. F-Train says:

In fact, charging the Poker Sites with these crimes has victimized poker players more than the crimes themselves ever did by destroying a great source of entertainment and, for some, destroying their livelihoods, whether they were pros or were employed by the coterie of poker-related industries that online poker sustained.

Okay, but what about for the percentage of the population that has gambling problems and don’t just view it as a form of entertainment but have lost thousands of dollars playing poker?

Those of you who have read my writings should know that I’m in no way, shape, or form an advocate of having online poker be illegal. I’m simply playing the devil’s advocate. I’m trying to offer a point of view that isn’t clouded by emotion and passion for the game and for my own personal financial well-being.

That’s the counter-argument to his statement. Likewise, during prohibition it didn’t matter whether or not they took away a form of entertainment (drinking) or that they were destroying people’s livelihoods (bars, alcohol producers, etc). It’s been done before, man. This is not anything new and I’m quite sure that the government can make a case for their being a victim in there somewhere.

For instance, what about California? Poker rooms are legal but you have to apply for a gaming license. I can’t just jump on a plane back to the US rent a office space on Sunset Blvd and start dealing poker games. There’s not a gaming legal expert out there that would say that that was completely legal. But where are the victims?

I’m really at a loss for why F-Train is missing the boat on this one when it seems so obvious. He says:

At one time I thought this case would end in a settlement, as most of these cases tend to do. But the more I think about it, the more I’m convinced it will go the other way. The government is going to have a tough time trying to extradite Ray Bitar or Isai Scheinberg or most of the other named defendants. Countries generally don’t like going along with extraditions for charges that aren’t crimes on their own soil. That won’t create much pressure on the poker sites to ease the plight of their fearless leaders.

Without any real threat of jail time, there’s nothing to be gained by the Poker Sites from a settlement. A settlement would almost certainly take the form of a hefty fine [FN 2], the possibility of some jail time for some of the individual defendants, and (this is the killer) an admission of guilt. Any admission of guilt by the Poker Sites will seriously jeopardize their chances of being licensed in a regulated future. If the Poker Sites are going to be shut out of the US market anyway, they might as well tell the DOJ to F itself in the A and tie this thing up in the court system for the next two years.

By then maybe regulation will have come to the U.S. and the DOJ will want this embarrassment of a case to just go away.

Don’t you get it? They don’t want to take this to court. They’ve accomplished what they set out to do which is to get Stars and Tilt and Cereus out of the US. They don’t care if they can extradite Bitar and Sheinberg. They just want them to know that if they try to step foot in the US that they’re going to bring the hammer down hard. Believe me, it’s sent a chill up the entire industry’s spine and that was exactly what the indictments were designed to do just like the UIGEA was not designed to make poker illegal but to dry up the funds thus cutting off the lifeblood of the business.

And in the case of the UIGEA it obviously worked. That’s why Stars, Tilt, and Cereus all had to play in the muck to get money on and off their sites.

The indictments will prove just as successful in accomplishing their end goal. The DOJ, Harrah’s, and MGM all win regardless of the outcome. If there’s no settlement and Bitar, Sheinberg, et al decide to just wait it out they can’t enter the US market with an indictment hanging over their heads. If they settle and admit guilt it won’t just “seriously jeopardize their chances of being licensed in a regulated future.” They’ll completely eliminate all chances of it ever happening. In the words of the immortal warlock, “Duh, winning!”

The worst case scenario for the DOJ is that Stars, Tilt, Bitar, Sheinberg, Cereus and everybody else fight the case and win. How long will that take? Years most likely. And then once they’re in the US you’ll see everybody from Kentucky to Washington State filing state cases against them. Sooner or later they’ll lose and there goes all hopes of becoming a licensed and regulated online poker room in the US.

This is the same mistake people made back during the UIGEA. They’re looking at this from a mindset of what’s fair and unfair and they hope will happen and then constructing all of their arguments back around that.

It wasn’t fair that Party and many other operators had to leave the market back in 2006 but without a single indictment that is exactly what the UIGEA accomplished. The same is happening here. Just throwing down the indictments has gotten the DOJ most of what it wants. Stars and Tilt are out of the US market and have little chance of ever being able to return. Sure they might like to put icing on the cake by getting a conviction or a huge “please don’t send me to jail” settlement but they’ve accomplished most of their major goals already.

A lot of people say that I’m too negative but I just consider myself realistic. I’m not hoping for a one-outer on the river. I’m playing the odds, getting a read on the players at the table, and guessing how each player will act given a certain set of circumstances. All of what has happened since the UIGEA is very predictable if you take your own hopes and wishes out of the equation and simply look at what motivates each player.