Two and a half years ago Eric Holder and the U.S. Justice Department applied dubious legal logic to shut down one of America’s quintessential pastimes – poker games among consenting adults. The Justice Department not only put a freeze on one of America’s fastest-growing forms of entertainment, it made the Land of the Free one of the few democratic nations in the world to ban consenting adults from playing online poker. Is it time for over-intrusive government to allow consenting adults in a free country to play online poker again?
A Poker Renaissance
From 2003 through 2010, poker caught America’s fancy in a way not seen since Doc Holiday dominated the poker tables at the Alhambra and Oriental saloons in Tombstone, Arizona, infuriating the outlaw Cowboys gang by relieving them of much of their ill-gotten fortune. In 2003, a full-time accountant who avidly played small-stakes online poker turned, through a remarkable string of events, a $40 entry in an online poker tournament into the world championship at the World Series of Poker (WSOP) in Las Vegas. Chris Moneymaker’s Cinderella championship run coincided with ESPN for the first time devoting major resources to producing several hour-long episodes chronicling that year’s WSOP. This was the poker equivalent of Rocky Balboa beating a stadium full of 838 Apollo Creeds – except this was a true story and the world’s premier sports network captured the story from start to finish.
Buoyed by the “Moneymaker Effect” and a dramatic increase in the popularity of online poker, 2,576 people entered the 2004 WSOP Main Event, fully triple the number of players who entered in 2003. Now, rather than a tournament numerically dominated by professional poker players and extremely wealthy businessmen, the tournament had a large contingent of amateur poker players and small-stakes pros living out a dream and telling themselves that if Chris Moneymaker could take down all those Apollo Creeds, so could they. In a sequel every bit as fascinating as the 2003 WSOP (and every bit as inspirational as the Rocky II sequel), full-time tax lawyer Greg Raymer gave amateur poker players a second consecutive victory over the legendary pros. Raymer’s run to the title gave the cameras everything a viewing audience could ask for, as the large, good-natured man appealed to every-day viewers while simultaneously intimidating even seasoned poker pros with his size, imposing stare, and unnerving lizard-eye sunglasses.
In 2005, the number of entrants jumped again, to 5,619. Again, a relatively unknown poker player won the championship in memorable fashion. With a large, rowdy cheering section reminiscent of a World Cup soccer match, telegenic Australian Joe Hachem seized his dream and won the title. Prior to 2005, poker spectators at the World Series of Poker could easily be mistaken for the nearly silent spectators at a golf tournament. In 2005, Hachem’s large contingent of boisterous friends and family waved Australian flags and chanted, “Aussie, Aussie, Aussie! Oi, oi, oi!”
In 2006, a record 8,773 people entered the WSOP. Hollywood talent agent Jamie Gold captured the title and a staggering $12 million payday. Between 2007 and 2010, at least 6,300 people entered each year. Many of the entrants won their seats by entering small-stakes online tournaments like Moneymaker. Others fronted their own entrance fees, but honed their skills and built up their WSOP bankrolls on the online poker sites.
ESPN devoted more and more air time to the WSOP each year. Lesser tournaments and even simple poker cash games began popping up on the Game Show Network, NBC, and seemingly every channel in between. Top poker players began signing lucrative endorsement deals similar to NFL and NBA stars. Poker was hip, poker was lucrative, and poker was mainstream.
Just as importantly, poker was egalitarian. Everyday people mired in dead-end jobs and with little excitement in their lives could dream of becoming the next Chris Moneymaker or Greg Raymer. Jerry Yang, a religious, soft-spoken social worker who professional poker shark Scotty Nguyen described as the nicest guy you can ever meet, won the Main Event in 2007. In 2008 through 2010, a series of young 20-somethings seemingly fresh out of college took home the title.
In the absence of extraordinary God-given skills refined by a lifetime of practice, nobody can realistically dream of homering off David Price in the seventh game of the World Series, tackling Adrien Peterson in the open field to clinch a Super Bowl victory, schooling LeBron James in the NBA Finals, or taking down Tiger Woods at the Masters. But a skilled amateur poker player – if he or she is playing at the absolute top of his or her game and catching a few breaks along the way – can plausibly dream of entering a small-stakes online poker tournament culminating with sticking it to cocky, irascible poker legend Phil Hellmuth while capturing fame and fortune at the World Series of Poker.
Feds Shut It Down
That all changed on April 15, 2011 – Tax Day, by design or not – when Eric Holder and the U.S. Department of Justice shocked the poker world by shutting down poker websites, freezing poker accounts, and filing major criminal charges against operators of online poker sites and the financial companies that processed poker deposits and cash payouts. The Justice Department justified its actions by claiming the companies violated the Wire Act of 1961, a mafia-focused statute that outlaws the use of wire communications to accept sports wagers or process payments relating to sports bets.
By December 2011 the Justice Department, chastened by court rulings indicating it had overzealously applied the Wire Act, indicated it was backing off on its targeting of poker sites. Nevertheless, the damage was already done. The online poker sites had already shut down, and nobody was eager to start back up again without express assurance that the Justice Department wouldn’t change its mind again and resume prosecutions.
The federal government recently told the individual states it would not interfere with state-specific laws authorizing and regulating online poker. However, only a few states have begun to seriously consider this option. Those that do will have differing regulations and standards, meaning gaming companies will have to navigate a patchwork of often contradictory legal requirements. Moreover, each state that authorizes online poker must ensure that nobody can access that state’s poker sites from outside the state. For all intents and purposes, online poker remains dead thanks to the U.S. Justice Department, even though few seriously argue that it is illegal.
The best and perhaps only way for government to reliably assure the online poker community that it can operate without fear of a new round of overzealous criminal prosecutions is for Congress to formally affirm that online poker remains legal. But not many Congressmen appear eager to stir a potential hornet’s nest of anti-gaming sentiment when the political rewards appear minimal. Nevertheless, is it time to restore legality to this quintessential American game?
Ingrained in the American Spirit
History records the first poker games springing up in New Orleans during the 1820s. Large-wheeled riverboats delivered the game and its first professional players up and down the Mississippi River in America’s antebellum period. Poker became synonymous with Mississippi River folklore, and as the frontier stretched west, so did poker.
Poker provided river travelers with entertainment to relieve the boredom of long days confined on a boat deck. Poker offered a sanity-preserving diversion for Union and Confederate soldiers experiencing the long, drawn-out misery of fighting the Civil War. Poker gave gold prospectors and fur trappers an entertainment commodity thousands of miles from the bustling cities of the East. Poker became the preferred form of competition among outlaws and gunslingers in the Wild West, allowing them to blow off steam in a manner that did not involve bullets. Poker sustained thousands of Navy servicemen devoting years of service patrolling the Atlantic and Pacific Oceans during World War II. Poker, as much as baseball, steam boats, covered wagons, and manifest destiny, is part of the very fabric of America.
The Strange Politics of Poker
Strange bedfellows have joined forces to vigorously oppose legal online poker. Two political factions that are usually in sharp disagreement on almost every political issue form the strongest opposition to online poker.
One faction consists of so-called nanny state liberals who believe government must step in to protect ourselves from our own personal choices and our own unregulated activities. These are the folks who often support laws against Big Gulps, laws requiring kids to obtain a permit to set up a lemonade stand or sell Girl Scout cookies, and laws requiring McDonald’s to serve apple wedges rather than French fries as the default side item in a Happy Meal. These folks believe some people will recklessly lose their rent money playing online poker, so therefore nobody should have the opportunity to play.
The other faction consists of social conservatives who believe playing poker is inherently immoral or sinful and therefore government must step in to preserve public morality. These are the folks who usually raise the most strenuous objections to the liberal nanny state, but find common ground with such liberals on this particular issue.
The result of this strange political coalition is legalized poker is neither a Democratic nor Republican issue. Support for legal poker spans the bipartisan middle ground between the usually bifurcated poker opponents.
The irony is the two factions opposing poker reveal a certain degree of self-contradiction.
For liberals concerned about people being victimized by their own choices, poker offers opportunities that for many people do not exist anywhere else. People without advanced education or highly developed job skills can master a game that allows them to pluck money from wealthy executives who play poker merely for ego and fun. The house commission for online poker tournaments is typically merely 10 percent, with 90 percent of the money returning to the players. This is a far more generous return than legally sanctioned lotteries, which are disproportionately played by low-income Americans, and a more generous return than brick-and-mortar casinos that typically return only about 75 percent of players’ entry fees.
Social conservatives concerned about the morality issue should take several points into consideration.
There is no Bible verse that condemns gambling, though gambling has occurred throughout human history. Gambling is more akin to drinking wine or engaging in other activities that are not immoral in themselves but can be problematic if a person does not behave ethically or exercise self-control. Indeed, some religious customs such as spinning the Hanukkah dreidel involve gambling.
For certain people, gambling can be an activity associated with self-destructive or immoral activity, but for many other people it is not. For 2012 Main Even champion Greg Merson, his love of poker and his need to stay sober in order to play well gave him the strength and inspiration to kick a serious drug habit. If you attend any WSOP tournaments you will observe that 99 percent of the players are sober, well-rested, and drinking nothing stronger than bottled water throughout the competition. Neither smoking, nor profanity, nor hostile behavior is allowed. The WSOP taking place in the inescapably wild atmosphere of the Las Vegas Strip has the feel of a convention of designated drivers taking place in Rio de Janeiro during Mardi Gras.
Also, poker has more in common with contests of skill than with gambling. In true gambling, there is little skill involved in choosing a particular wager and participants have little or no control over the outcome of the contest. Playing the lottery or slot machines is gambling. If you buy a lottery ticket, you theoretically have no better or worse chance of winning than anybody else who buys a ticket. The only person or entity with an advantage in the lottery is government, which unavoidably turns a profit on every lottery it promotes, administers, and thereafter taxes. In poker, by contrast, skill is a far greater factor than luck. Sure, the luck of the draw will impact the results in any given tournament, but in the longer term the best players are regular winners and the unskilled players are regular losers.
A good analogy is looking at the day-by-day results of a full baseball season. Even the best teams will lose plenty of games and have significant losing streaks. Even the worst teams will occasionally beat the best teams and string together several wins in a row. By the end of the season, however, the luck largely evens out and skill is rewarded in the standings. The best teams make the playoffs and the worst teams try to improve for next year.
There is little logic to opposing poker on morality grounds while allowing individuals the freedom to drink heavily, smoke, eat unhealthy foods, climb Mt. McKinley, or play golf with lightning nearby. Each of these activities is more dangerous or self-destructive than consenting adults deciding to spend a little of their hard-earned money playing in an online poker game. Yet each of these other activities is rightfully legal and few poker opponents argue these other activities should be against the law.
This brings us back to empowering the Big Government nanny state that most social conservatives oppose. Doesn’t government have more important things to do than tell people what card games they can play?
For those who still believe poker is inherently immoral, the personal stories of virtue among poker players are too many for this column. However, here are a quick few:
2007 WSOP champion Jerry Yang, a childhood refugee from war-torn Laos, donated more than $2 million of his winnings to the Make-A-Wish Foundation and other charities. Yang’s unabashed Christian faith shone throughout the WSOP, as he frequently talked about his Lord and gave thanks for his tournament run.
Legendary poker pro Barry Greenstein is known as the Robin Hood of poker, donating all his tournament winnings to charity. Those donations have totaled millions of dollars.
Hedge fund manager David Einhorn gave all of his $4.3 million in winnings at the 2012 WSOP to the One Drop charity, which provides clean drinking water to people in Third World nations.
Without poker, none of this charity takes place.
Time to Affirm the Freedom to Play Online Poker
In a free society, government should be very careful about taking away people’s freedoms. While some justifications and necessities will exist, it is hard to make a compelling, internally consistent case for the Land of the Free taking away the right of consenting adults to play online poker. With its de facto ban on online poker, America is an outlier among the world’s democratic nations that largely respect and protect such a right. Congress can and should affirm that online poker remains legal, and in the process demonstrate that America remains the Land of the Free.
James Taylor is a senior fellow at the Heartland Institute and an amateur poker enthusiast. Taylor has played in three World Series of Poker events, including finishing 15th in a field of 4,620 at the 2012 WSOP. He maintains a personal website at www.JamesTaylorPolicy.com.