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.
![[livejournal.com profile]](https://www.dreamwidth.org/img/external/lj-userinfo.gif)
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.
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
