The Moneymaker Effect & The Future of Poker in America
October 23, 2013 Leave a Comment
Since the famed “Moneymaker Effect” of 2003, action has picked up heavily in all forms of poker. Multi-table tournaments (MTT’s) have gained popularity due to the fact that a small initial investment can net you a large return on your investment if you make the final table, and go on to win the entire tournament.
The “Moneymaker” Effect
“After receiving his master’s degree, Chris Moneymaker worked as a comptroller. He was also a part-time employee at a local restaurant.
Chris Moneymaker was working as an accountant when he won a seat into the main event of the 2003 World Series of Poker through a $39 satellite tournament at the PokerStars online poker card room. Although largely unknown prior to the tournament, on day one of the tournament his skills caught the attention of professional sports handicapper Lou Diamond, who called Moneymaker his “dark horse to win the whole tournament.”
Moneymaker went on to win the first prize of $2.5 million, instantly garnering poker superstar status. It was his first live poker tournament. One of Moneymaker’s most memorable hands was heads-up against Sam Farha, when on the river he bluffed “all in” with King high. Farha folded a pair of nines, quickly changing the momentum of the match. Moneymaker eventually won the WSOP when his 5♦ 4♠ beat Farha’s J♥ 10♦ on a board of J♠ 5♠ 4♣ 8♦ 5♥, giving Moneymaker a full house. After winning the WSOP, he quit his job to serve as a celebrity spokesman for Series owner Harrah’s Entertainment as well as PokerStars. He also started his own company, Moneymaker Gaming, and began traveling to play in more numerous and larger buy-in tournaments.
Chris Moneymaker’s autobiography, Moneymaker: How an Amateur Poker Player Turned $40 into $2.5 Million at the World Series of Poker was published in March 2005.”
The Result of The “Moneymaker” Effect
The world of poker experienced a revolution in the summer of 2003. After Chris Moneymaker won the 2003 Main Event, poker experienced a whirlwind of popularity amongst players of all ages and cultures. Throughout the entire world, poker rose in popularity immensely. This rise of poker popularity meant more money being introduced into the poker community. More money meant more profit for skilled poker professionals who could exploit their new weaker “fishy” opponents.
The Future of Poker
United States v. Scheinberg, 10 Cr. 336 (2011), is a United States federal criminal case against the founders of the three largest online poker companies, PokerStars, Full Tilt Poker and Cereus (Absolute Poker/Ultimatebet), and a handful of their associates,which alleges that the defendants violated the Unlawful Internet Gambling Enforcement Act (UIGEA) and engaged in bank fraud and money laundering in order to process transfers to and from their customers.
A companion civil case, United States v. PokerStars, et al., 11 Civ. 2564 (2011), includes Full Tilt and Cereus as defendants and seeks the forfeiture of approximately $3 billion in assets belonging to the companies. After the indictment was unsealed on April 15, 2011, a date quickly dubbed Black Friday by the online poker community, PokerStars and Full Tilt stopped offering real money play to their United States customers. Three years after the start of the poker boom, the U.S. Congress passed UIGEA in order to extend existing gambling laws into cyberspace. The law made processing payments for illegal online gambling a crime; however, the defendant companies remained in the U.S. market in the belief that the law did not cover poker. A former payment processor for the companies turned state’s evidence after initially being charged with violating UIGEA himself. On September 20, the civil suit was amended claiming individual fraud by Messrs. Howard Lederer, Chris Ferguson and Rafael Furst.
The U.S. Department of Justice seized the .com internet addresses of the three online gambling sites, replacing them with a take down notice, but let Full Tilt and PokerStars use them again once they pledged to no longer serve the U.S. About 76 bank accounts in 14 countries were frozen, including an unknown amount of player funds. The prosecutors are seeking jail sentences for the 11 criminal defendants including site founders and executives, U.S. payment processors, and an executive of a small Utah bank, who prosecutors maintain were engaged in an elaborate criminal fraud scheme, using the bank in Utah to mis-code transactions with other banks to bypass UIGEA restrictions.
Antigua and Barbuda officials considered action in the World Trade Organization. The companies ceased their U.S.-facing ad campaigns, resulting in cancellations of poker-themed television shows. In June, Full Tilt had its eGambling license suspended, which halted all of its remaining online play. The Alderney Gambling Control Commission on the British Channel Islands later revoked its license on September 29.
On July 31, 2012, US government dismissed “with prejudice” all civil complaints against all PokerStars and Full Tilt Poker companies after coming to a settlement with PokerStars which includes PokerStars purchasing Full Tilt.. PokerStars and Full Tilt admitted no wrongdoing as part of the settlement, which ends all litigation between the government and the poker companies. via
The Return of Online Poker in The United States of America
Nevada was the first state to full legalize online poker in the US. New Jersey was soon to follow suit, opening their doors for play in mid-November. Multiple casinos in Atlantic City have received gaming licenses to offer poker to their patrons, inside and outside of the casino itself. Pokerstars has planned to build a $10,000,000 p0ker room at Resorts Casino.
In my opinion, online poker will be fully legalized, regulated, and taxed federally within a few years. I believe that the main reason our government shut down online sites on Black Friday was because they were not in full control in enforcing tax laws on citizens. Since many of the sites operated overseas, the US government had no control over their operations, and many US players weren’t 100% comfortable putting their money online.
With full federal regulation, expect to see another poker boom, much like after Chris Moneymaker won the main event in 2003. American citizens will feel more secure putting money online, and this will create a lot of action with the games already going on overseas. The player pool is enormous in the United States, and many new players will also try their luck online after everything is sorted out. Online poker sites will have to abide to strict rules to remain in operation, and doing so will create a safe, and fair playing environment for anyone interested in playing.
Former Full Tilt Poker players have been given the option to file a remission for their frozen funds online, and those funds will be transferred directly to bank accounts on November 16th, 2013. All American accounts have been frozen since Black Friday, and it is nice to see that our government made the right choice to reimburse all player funds. We can thank PokerStars for reaching a deal with the US government to acquire Full Tilt Poker, and ensure that all players funds were returned.
The future is bright for online poker in the United States, but it will still take some time to fully implement a reliable and secure system of fair play for players. Our government will generate massive tax revenue from the operation, at a time when we all know they desperately need more funding.
Hope to see you all at the tables! 🙂