Ship It, Fish!

The UIGEA turned out to be challenged from a number of directions. The story has been well covered elsewhere, and I don't know enough to do it justice, but my understanding is that banks are simply saying that they can't implement the complicated rules and are appealing to regulatory agencies. Like most court/legislative maneuvers, this will take some time to sort out.

Meanwhile, online poker remains as grey as ever. Money goes in and out to the sites still operating, and some payout systems still work (although fees have reached new heights).

I've been just too busy doing actually useful work to spend time playing much poker, but as a change of pace I often play on weekend mornings until it becomes boring. I decided, though, that I wouldn't deposit. Instead, I'd take from Chris Ferguson's challenge and try to literally get something for nothing.

Having played so much online, I have a number of player points on various sites. So, during the latter half of last year, I decided to see if I could build an online poker bankroll and/or win some prizes without ever redepositing even $1.

I started on a UltimateBet, because their player points are most valuable. Well, they are most valuable because you can actually play “cash games” for points, with a 2500 point buy-in and 10/25 point blinds. Since deep-stacked NL HE cash games against weak opponents are the best spots I've ever found for myself in poker, these games were ready-made to get me lots of points.

My first big win was to win my wife's holiday gift: an Ipod bought with points on UltimateBet. This had the added bonus of fighting off the don't spend money on a music player for me; the one I have basically works attitude my wife was taking. This way, I could invest only my time and get her a gift that she actually really wanted but couldn't justify the overpriced cost of Apple's (IMO, crappy) hardware.

Now, in the end, I roughly calculated that I got paid somewhere around $3/hour for the time it took me to play to win the Ipod. However, most of that time I could be doing something else like watching TV or talking with my wife. Those point games are extremely low pressure and easy to pick up chips without any hard decisions or good reads. (“Standard bad player” reading ability is all it takes to get the points.)

In next week's post, I'll talk about my next moves for building a fresh online bankroll using only the almost-cash-valued remnants of my former online pro status.

I thought I'd mention briefly the story that has had the online poker world going since the first 2+2 posts last month showed one player's 100% river aggression factor. The story ends with Absolute Poker's executives using “root” accounts to swindle online players by knowing their exact card holdings in high stakes cash games and high buy-in tournaments.

I won't go through the details of the story; I've been following it from a distance (since my poker time is limited these days), so I would probably get a few details wrong. Since I have more time to listen things while commuting than reading stuff online, I got the best summary of this situation from this week's episode of the Rounders podcast. Also, two posts that extempore (aka Paul Phillips) made give some good details. (I am not a true NYC'er, BTW, because I can't read easily on the subway and listen to podcasts instead.)

I had suggested before that perception of badly written software and not true “rigging” would ultimately be a serious problem for online poker. I think I'm going to declare myself as somewhere between 30%-50% right about that.

Some might say this situation shows that Absolute was “rigged”, since it was an inside job. Executives at the company held the root account, and used it to view everyone's cards and gain huge edges against their customers. But, putting on my hat as information technology expert for a moment, I argue that this is a software problem as much as anything else.

The software should never had this feature. There is no good reason that standard client software, used from an off-site location, should have had the ability to receive hidden card information before the cards were exposed in the hand. Indeed, the network protocol itself should never even send hidden card information until the completion of the hand (if at all).

The idea that the network protocol sent opponents' hole card information over the wire before shows simply bad system design and programming. There is no reason to do this, and a hundred reasons not to. Had the software not been designed this way, the only cheating temptation our friendly Absolute executive would have involved modifying the server software himself to send him card information in real time somehow. Maybe the guy was a smart software developer or system administrator and could have pulled off the job himself, but I doubt it.

Finally, to bring my personal politics into this, this is why I firmly believe that all poker server software should be Open Source and Free Software (FOSS). There is no competitive advantage for these poker sites to gain from having server software that differs; their branding, interface, and other edges happen on the client side. (I happen to think client software should be FOSS too, but that's a harder argument.) The argument for FOSS server technology for all online poker is clear and simple. Players should be allowed to examine the code to be sure only their authenticated accounts can receive their hidden cards.

Of course, only the site administrators should be allow to change the versions of this FOSS running on their own servers, but they should publish that source for public inspection. That's the only way online poker can actually be safe from these sorts of challenges.

BTW, full disclosure: A good friend of mine is the premiere developer in the world of FOSS poker technology. His site has some useful and interesting stuff. I must admit, I am jealous sometimes that his day job is writing FOSS poker software, but I still hope his software gains more adoption in reaction to these events.

On Epassporte, you can only cash out $300 each 24 hours via ACH, and they charge $2 each time. You can up this to $500 a time only if you give them both a credit card and a bank account number.

I will cut it close getting all the darn money out in the 63 days remaining before the UIGEA goes into effect.

As my wife pointed out, it's better than getting none of it, which is about where I was give that Cake apparently has no check processor now.

Cake Poker realized that all of things available for purchase in their Cake Store were too cheap. Hard-core players just earned those gold coins too fast. I was playing on there so much, that under the old prices, I would have earned an 80GB iPod every three weeks! Glad I got two of them before they doubled the cost. :)

Still, it will take a lot longer than six weeks to get my next one. I am not playing on their as much as I was. The Neteller thing really thinned out the player base. I would still declare Cake Poker's NL HE games the easiest to beat on the Internet right now, but that's all becoming relative.

Cashouts have gotten really slow. I have had a cashout pending for a week and a half and they have yet to even process it. Plus, you can't buy fedex shipping for the cashouts anymore. Their answer when I email them is: Checks will be received 15-20 days from the date requested. Most of that time seems to be waiting for them to even process the check request in their system, not the time it takes after they've sent it off to Chexx.

I've decided to pull most of my online bankrolls out at this point. I'm going to be writing more about my plan to substantially reduce the amount of poker I play soon, but I might as well start moving the money out at this point.

As many know, I have preferred — since the quick withdraw of Firepay after UIGEA — the paper check cashout method from online poker sites. I have used this method many times. I even used it sometimes while I still had Firepay for larger amounts, particularly in the old days of Pokerroom when the would fedex you a check at no charge if it was over $2,000.

I've seen the sites change what check processor they use many times. It appears that the last one operating is Chexx, Inc., a clearinghouse third-party check processor. I've noticed that sites that once used a different processor are now sending me checks via Chexx; I've received numerous Chexx's checks (don't subvocalize that phrase; it just sounds confusing) from various sites over the past two weeks.

davebreal referred recently to his concerns about Chexx, Inc. Worries about Chexx were initially raised on the 2+2 Internet poker forum. As near as I can tell, that whole thread is a bunch of fear mongering interspersed with an occasional intelligent person pointing out how the banking system actually works. Please, don't panic.

I admit I was a little concerned, too. But then I got Chexx's checks in my own hands and did some research. There are two things that generally matter when depositing any check (I'll get to specific UIGEA worries later): (a) does the account in question have sufficient funds, and (b) is the issuing bank reliable and known to pay their drafts. Nothing else really matters. Admittedly, (b) becomes quite complicated for USA citizens because it is often difficult here when the issuing bank is not in the USA. (Many of the checks I've gotten from various poker payment processors have been Canadian, and I've had many problems at some banks about that.)

The good news is that the Chexx's checks are drawn off a bank in the USA. According to the routing number, Chexx is using a bank called the US Bank, which has 2,472 branches in the mid-west and elsewhere. I don't think we therefore have to worry about the bank itself. Is this bank really going to default on its drafts and run off with the money?

The only problem, then, would be that Chexx's account doesn't have sufficient funds. This, too, seems pretty unlikely. Chexx is a somewhat well-established third-party check distributor, including check processing for many mundane, non-UIGEA-impacted businesses such as consumer product rebates. Even once UIGEA becomes a problem for them, they aren't going to jeopardize their larger business by bouncing checks for any customer — be they an online gambling company or not.

Given that this is an established company with multiple vertical markets, don't you think that they are going to do a careful pull-out? Don't you think they'll inform their customers (the poker sites) when the end date is? Don't you think they'll honor all checks issued before said pull-out? Rumors have gone around that the end might be 1 February. Others have said 1 March. But, we're going to know, and not via rumors. Chexx will tell the poker sites and the poker sites will tell the players, surely with at least 24 hours of warning if not more. Then they'll honor all checks issued up until that point, and they'll refer us to ePassporte or something.

So, you might ask, why is that people are reporting problems, such as tellers refusing to accept the checks from Chexx? Well, this is a problem I know a great deal about. I have been doing online poker check cashouts for almost three years now, and I can tell you first hand that tellers, and even most bankers, are utterly clueless about how even the national banking system works, let alone the international one does. They see a check that doesn't look like all the others they see every day, and they freak. They don't know how to handle it. They see a Canadian return address, and then don't bother to look up the routing number and see if it is a USA routing number. They tell you they don't take Canadian checks, or try to tell you have to pay some exorbitant fee to get it processed, or some other bullshit. Most people (to use a pithy phrase from our world) are clueless donks.

In a comment in davebreal's journal, I mentioned that so-called boutique banks are the best answer. My bank (whom I won't name publicly but if anyone is interested in them email me privately and I'll tell you about them) requires that you keep $2,500 active in your account (at only 1.5% interest), or pay $15/month for the privilege to have an account. Sure, it ain't cheap to keep the account open, but I get serious service for the cost. I have a personal banker assigned to my account who knows me and understands my business. I've explained to her that I do business with a number of companies in Canada and elsewhere, and they use these payment processing services. She's researched each one to make sure the checks are good when I start doing business with a new company or service. She figures out the best way to process the check (either as a standard ACH deposit or as a foreign check claim from Canada), and I get the money deposited. She even puts it through as “cash”, so that I don't have to wait for the amount to clear the other side.

My point here: the people freaking out haven't done their homework, and they are relying on the clueless employees of large, overly corporate banks to tell them how things work. Yes, there are going to UIEGA problems. Sometime in the next 153 days, US Bank will decide that they can no longer accept Chexx's transactions from their gaming customers. Perhaps before that, Chexx will have already voluntarily left the poker site payment business. We'll all find out some date when we can't request checks anymore. The existing checks we have will clear; we'll just have trouble getting the new ones out. We'll have to switch to ePassporte or some other crazy thing for a while. But, I'm sure they'll be some way to get the money out almost right up to the day compliance with UIGEA is mandatory (which is 10 July 2007, BTW).

That said, I definitely think slowly reducing your active online bankrolls to the bare minimum is a good idea. The last cashout right up against 10 July will be tough. But, we have a lot of days to go. Remember that these banks and check processors are run by people — regular old human beings like you and me. People procrastinate. People try to get their papers into the professor just under the deadline. People try to renew their license the day before it expires. Particularly when there is a lot of money involved, people will be slow to implement new measures for new legislation.

The challenge is following carefully the changes and anticipating when you have to switch tactics (just like in poker :). I have a feeling that check cashout has legs for another 60 days or so, then we'll have to switch to ePassporte, which will probably have about 50 days of life, and then it's over. That's my rough estimate based on gut instinct and how things played out with Firepay and the other sites that withdrew from the USA.

However it works out, note that arrests appear to be the only way to lock money up. Neteller and the other sportsbook case are the only examples that I know of where USA players funds have been seized. Even my experience with the Pokerstars instant cutoff from Firepay worked out; Pokerstars dutifully sent me a check upon request right after Firepay disappeared. I suppose that if we see arrest made of any US Bank or Chexx employees, we should assume the worst. Therefore, although I flirted with it for a while, I'm going ultimately to pass on the panicking. I hope you will too.

I have disappeared from my journal because I've been coming home from work every day and immediately launching the Cake Poker client and playing until I can't keep my eyes open anymore. I've put in approximately 6-8 hours each weekday and 12 hours each weekend day in playing on this site. I'm earning around $64/hour muli-tabling mostly $1/$2, $200 max, and occasionally $2/$4, $400 max NL HE.

This site is completely amazing. The closest game I can compare it to is what you find in the $1/$2 NL HE games in Atlantic City. These games can be beaten by the clueless. Indeed, the would-be other “sharks” on the site are actually very weak players who simply hold money for me and one or two other strong players to get.

I think there are a few factors that make this site so amazing:

• The Sports Book Players: Cake poker has a skin arrangement with with an online sports betting site. Most of the players (based on chat comments) are actually coming through the sports betting site, not Cake Poker. These players are truly horrible, and have virtually no textbook knowledge of the game and minimal playing experience. They don't even know what hands particular bets represent, let alone figuring out if the other players hold the represented hand or are bluffing.

• Lack of Poker Tracker Support: A lot of otherwise strong online poker players are not that smart. I once knew someone who has been a losing player for years who told me there was no reason to play on a site that didn't support Poker Tracker. He said this during the hey days of Pacific, when the limit games there were the best ever seen on teh Internets. Pacific then was much like Cake is today. This fellow, who was struggling to do well at limit games, would only play on the shark infested waters of Party and elsewhere, losing steadily, while I was cleaning up on Pacific. At the time, I was probably only a little better at limit HE than he was, but I was a consistent winner and he was a consistent loser, because of his stupid Poker-Tracker-only game selection criteria.

  Of course I'm annoyed that my hand histories aren't imported and I have no heads-up display on the players. Thing is, I started playing online poker before Poker Tracker and like systems were even available. I know how to beat the game without it. Anyway, the opposition on Cake Poker is so bad, even someone who is completely spoiled with the Poker Tracker crutch should be able to beat the games with ease. These players are horrendous; a trained monkey should be able to at least break even in these games.

  Frankly, I am heavily rooting for Poker Tracker to not support this site. Once that happens, many sharks will give it a try. I recall that six months after HandGrabber came along and made PT work for Pacific, the games started to decline. Now, Pacific is nothing special — just another crappy software poker site.

  I am so amazed at the near-exact parallels between Pacific and Cake Poker: another gambling site sending players over (888 and Sports Book), bad software, no Poker Tracker support. In poker, you have to live where the fish live, even if it puts you out of your comfort zone.

• Completely readable, loose passive players: This is key here. They slow-play when they shouldn't, and min-raise with monsters. They just call down with any top pair, but let you manipulate the pot size. They stack off every time with any two-pair or better holding. You basically have to be a moron to get a lot of chips in the pot bad against them, since they are trivial to read.

• Profitable Promotions: They have this “gold card” thing where you collect cards from their vault. They are used for a number of their promotions. The most interesting one is the weekly “GC 500”. There's a lot of luck involved, but if you play every day for five hours or more, odds are you are going to win an average of $250 in the thing a week.

You may note that this post was originally friends only. I didn't initially want to tell the whole Internets about the fish pond. These days, it doesn't matter as much.

Anyway, I might not be posting a lot, as I want to suck down this money before it runs dry!

Excellently insightful as always, Ed Miller posted an excellent piece on the Neteller situation and the danger that has always been inherent with online poker that many don't see. I recall distinctly when I started playing on Pokerroom in 2001, and then again Pacific a year or so later, that it was extremely important for me to be playing not on my preexisting bankroll, but with a new bankroll won on that site. I still try to follow this rule, whereby I attempt to cashout my initial investment as quickly as possible. In this way, I can view any collapse or inability to pay as merely wasted time, not wasted bankroll.

I've modified that somewhat since buying in became difficult; I'm keeping more in online poker accounts than I used to, due to fear that I can't buy in again if it falls. That is probably a mistake, because the trustworthiness of online balances is actually most in question. Miller's right that an online version of the proverbial 1929 “run on the bank” could cause a serious collapse due to cashflow problems.

The most important thing for all of us to do — particularly those of us that receive a serious portion of our real income from online poker — is, in the words of Douglas Adams: Don't Panic. Keep playing your usual games. Do your usual cashouts. We all know we'll see a steady slowdown in the action, and eventually the games will move towards empty as the USA players disappear. But, online poker isn't changing much outside the USA. I hope my non-USA friends can comment, but I bet the feeling outside the USA is these silly USAmericans, always with their morality-oriented legislation. We'll keep doing what we're doing and forget them and their idiot president. If that's the sentiment, which I hope it is, that's the right one. The USA is an important market, but it's not the center of the universe.

I expect I have lots of online poker in my immediate future, and lots of live poker in my medium-term future, which just can't get the EV pumping the way my current online work can. But, I'm happy to let the online scene wind down gracefully around me, and then make my decisions based on what the post-UIGEA and post-Neteller-arrests world looks like. I hope everyone else will do the same. Keep your heads cool; let's all put our chips in, take a flop, and see how this hand plays out.

Update: I forgot to put this link into the slashdot story on the Neteller arrests. Like all slashdot, there are a very few excellent comments and lots of useless ones. Here's a particularly interesting one from a former Neteller employee.

It's been a long time since I've seen something even close to this — probably a few years. After a $15 preflop raise in a $1/$2 NL HE game where five people saw the flop, three stacks of $200, $250, and $450 got it all in on the flop of: 4 8 A

Of course, it's set (4 4) over set (8 8) over set (A A). This was only the second time in my life I saw this in a hand I was dealt into. (I folded preflop in both cases.)

Then, I proceeded, for the first time in probably two years, to actually be surprised by a draw out. Board finishes: 7 3. Bottom set wins — the only one that can make a flush on the unpaired board.

What I do think: it's two people's stories about how online poker is “rigged”.

Seeing it made me feel good in a way. I know I've been playing poker for a very long time when I finally see situations this unlikely. I have to get to bed soon, so I don't have time to calculate the odds on flopped set over set over set yielding a win for bottom set with a four-card flush on board. I am curious how the odds compare to other unlikely random events in life. Some days, I think all of poker is just a world wide experiment in confirming that statistically unlikely events do happen at roughly the theoretically proposed frequency.

For those of you keeping score on me, this doesn't count as a bad beat story being told in my journal because I didn't have a single $1 of my own in the pot, therefore it isn't my bad beat story.

In the interest of making my affiliate links on the side of my journal useful, rather than merely annoying advertising (despite the fact that I get free money if you sign up using the links on my journal, I still encourage you all to use something like privoxy to block them. :), I'd like to make that list on the side include all the places I know that accept players from the USA.

Strangely, I'm having trouble determining which of the smaller sites still take them. For example, I can't seem to find definitive information on whether or not Doyle's Room and the larger Tribeca network is still taking USA players. There are conflicting news reports in Google. Does anyone know for sure (i.e., is a USA player still playing on Doyle's Room)?

I just discovered today, that Cake Poker, a small startup site, is accepting USA players as well.

Does anyone know of others? The only ones I know about are those on the side, plus Pokerstars. I've left off Pokerstars from my list, mainly because I don't encourage USA players to go there after the fiasco they pulled on Firepay customers. Yes, I know some of my fellow poker LJ'ers make their livings on PokerStars; YMMV. :)

BTW, 178 days to go for USA players. :)

Full Tilt Poker, one of the few remaining sites permitting players from the USA, has held its “Iron Man“ Promotion for quite some time. If you earn N “Full Tilt Points” for Y consecutive days, you get to play in a freeroll. The greater your values of N and Y, the greater the prize pool of the freeroll you get to play. (There are four levels of freeroll.)

This year, they've introduced another option for Iron Man points. Instead of entering the freeroll each month, you can opt for an award of additional “Iron Man Medals”, which can then be cashed in for things at this Iron Man Store, which you have to look into to realize it's not the same as the standard Full Tilt Store.

You earn some medals, regardless, by a formula based on how many times you repeat this silly Iron Man status. This new decision just allows you to forgo freerolls to get some bonus medals. I'm likely to earn tons of medals the usual way this year because I'm planning to play almost exclusively online for most of the year, and Full Tilt is, of course, one of only three sites I can play on as a player living under the totalitarian regime of the USA.

The question that comes up is whether, at the end of the month, should I take my spot in the freerolls, or should I forgo the freerolls and cash them into medal points?

This is all somewhat of a pointless exercise, since the real EV is in the playing that earns the points, not the bonuses from the points, but being a poker player I can't help but calculate the EV of every decision that presents itself.

There are only three things of actual value in the Iron Man store: (a) extra 5,000 Full Tilt Points (more on why this has value below), (b) $535 tourney entry fees and (c) $216 tourney entry fees.

Let's take the last two first. Since (b) and (c) cost roughly 3,000 and 1,000 medals (respectively), and since you only get a spare 25-100 from forgoing the freerolls, it seems to me it's better to take the freerolls. The prize pools are between $10,000-$30,000, and the competition is probably softer than in the actual $216/$535 tourneys. I theorize this because the people who regularly buy into such middle-limit tourneys are much better tournament players than I, whereas any idiotic, cash-game donkey can get into the freeroll just by playing a lot. Therefore, I think the monthly freeroll is better EV than exchanging that entry for a tenth of $216 tourney entry ticket.

Now, what about (a), the 5,000 Full Tilt points? Well, the main Full Tilt store has a single item that I'd bother to buy with my points: A large screen Plasma TV. It costs 400,000 points. I recently calculated I'll probably reach that amount sometime early next year anyway via my usual Full Tilt Poker play. Therefore, it probably isn't worth it to waste the medal points to get me closer to that, because I'll probably get enough points for the TV eventually anyway, and I just had to buy a new CRT TV to replace a broken old one, so I am no hurry.

Thus, I can't see a reason that I'd want to stop playing the freerolls (in which I've yet to win a dime, of course). There is substantial EV in them; I'm a favorite against the field of random qualifying players, and the top prizes are usually in the thousands. Definitely worth the time to play them.

I know that at least one person who reads this journal (hello there, jellymillion :) has played enough in the past to earn these Iron Man thingies. Therefore, I ask, have I missed something? Is there some reason I should do it differently?

Finally, I have to say that these incentive and promotion programs are unnecessarily complicated. Like rebate forms, they are designed to make it difficult to figure out what they mean so that people are less likely to take advantage of them. I have a hard time believing the Iron Man thing actually draws more people to the site. Why not do away with the program entirely and give an across-the-board rake reduction to all players?