Poker Player Bill of Rights

Recognition of Poker as a Skill Game

Legal and social recognition that poker is a game of skill which contains elements of chance and is frequently played for money.

Fundamental to all poker rights is an understanding of what the game is and how it works. Once the masses and politicians learn and accept that long-term results in poker are determined primarily by skill, most legal and social protests against the game will melt away. There are other skill games with elements of chance sometimes played for money, such as tennis and golf. These sports seem to be accepted almost all over the world, despite the fact that short-term results are affected by luck and players receive money for winning.

Every sport has elements of luck, often caused by the weather. But tennis and golf are more similar to poker because the payouts are directly tied to short-term results. A player in a Grand Slam final can have over $1m riding on the outcome of a single match. While the entry fees (if any) are not the source of the prize pool, the athletes pay an extraordinary price to compete, measured in time and money spent training and traveling. A direct parallel would be to the PokerStars Supernova Freerolls. US residents were prohibited from competing in these after April 15, despite the fact that the price (rake and time spent playing) had already been paid.

The Poker Players Alliance has been the primary legal defense against the notion that poker is not a skill game, and has won court battles on this subject in several US states. Decisions in other states have been less positive, and many other countries have failed to recognize poker as a game of skill. While the PPA’s lawyers can fight for precedent in the courtroom, it is up to poker players and experts everywhere to show the truth about poker to anyone who will listen.

Every site for poker playing, training, discussion, or news should have a definition of poker as a skill game. Once people accept that poker is more like tennis than craps, the battlefield for rights will change.

Playing Poker is Not a Crime

Legislation explicitly protecting the right to play.

The most essential right of poker players is the right to play poker. Without this, everything that follows is moot. Five years ago, there was minimal organization among poker players to defend this right. The consequence was the passage of the Unlawful Internet Gambling Enforcement Act in October 2006, which was widely perceived as a federal ban on Internet Poker.

Since then, advocacy groups like the Poker Players Alliance have gained traction and fought hard for positive legislation. Players have become more motivated and organized to defend their rights. While federal legislation has not been passed, multiple bills have been introduced to Congress. Meanwhile, regulation of online poker has become law in Nevada and Washington, DC.

These legislative issues extend beyond the United States. While countries like the UK, France, Italy, and Spain have actively regulated online poker, others like Germany, Poland, South Africa, and Australia have passed anti-poker laws.

We need an international organization to protect the legal rights of players everywhere. At least two groups, the European Gaming and Betting Association, as well as the Remote Gambling Association, campaign for pro-poker legislation, but they do so on behalf of site operators. While they may help laws get passed, poker players need a group to ensure these laws protect players as much as sites.

Cheating is a Criminal Offense

Legal penalties for cheating consistent with severity of infraction.

When Senate Majority Leader Harry Reid introduced a surprise bill in December 2010, many were outraged that it contained provisions imposing legal consequences for players violating a poker site’s terms and conditions. When violation of a site’s rules grants a player an unfair advantage in a game played for real money, then that violation is tantamount to stealing and should have similar consequence. Cheated players must have legal recourse against the cheaters.

In all of the cheating scandals unearthed over the last decade, how often has the cheater faced criminal prosecution or a lawsuit in civil court? Pretty much never. Justice has been limited to the closure (or temporary suspension) of accounts and seizure of account balances. If a player cheats their opponents out of $100,000 and withdraws $90,000 of that before they are caught, they only lose 10% of their ill-gotten gains, and their opponents are unlikely to be fully reimbursed.

Along with legal penalties for cheaters should come regulations for how sites reimburse victims of cheating. Right now, sites seem to do whatever they want when it comes to disbursing funds seized from cheaters. There should be clear guidelines and transparency in this process.

When you criminalize cheating, the rules of each site must be fair, reasonable, and explicit. If rules are vague, people may violate them without intent. If rules are unfair or unreasonable, sites may essentially criminalize acceptable behavior. This is another argument for regulation, instead of the Wild West setting that has proliferated online.

Tax Us Equitably

Fair tax laws which are in line with other businesses for professionals and allow everyone to net their wins and losses.

Prohibition of play is only one way that government can violate the rights of poker players. Unfair tax law is another. According to Russell Fox, EA, an expert on US gambling taxation, “There are two laws in the US that stand out as the worst for gamblers: state laws that disallow gambling losses and the treatment of professional gamblers vis-à-vis other professions as to business losses.

“Many states do not allow gambling losses on their state tax. This impacts amateur gamblers only as professionals can deduct their losses during a given tax year. Consider an amateur gambler that wins a poker tournament for $5,000 but has $5,000 of losses and resides in, say, Wisconsin. While on his federal tax return he can take the losses, he pays Wisconsin income tax on the full $5,000. Amateur online Sit and Go players can easily amass tens of thousands of dollars in winnings that are taxable in these states even though they may be net losing players.

“The other major tax law that is bad [is] Section 165(d) of the Internal Revenue Code, [which] states, ‘Losses from wagering transactions shall be allowed only to the extent of the gains from such transactions.’ This is the rule that does not allow gamblers to take losses in excess of wins. Consider a professional gambler that has netted $100,000 for the last 20 years. However, 2011 is a bad year and he loses $100,000. Because of Section 165(d), he cannot take the gambling loss.” This is not an issue that encumbers other professions.

So professional players in the US can’t write off a bad year, and amateur players can actually lose money on the year and still owe state taxes. Again, though, this is an international issue. While the UK does not tax poker winnings, nations like France have levied such huge taxes with their regulations that sites like PokerStars.fr are virtually unbeatable due to the amount of rake the operator must charge to be profitable. Online poker in France has suffered because most of the world has the rake capped at $3, but French sites cap it at 3€.

Taxation is a difficult area to advocate, since everyone wants lower taxes. But poker players are not asking for special treatment, just equal and fair treatment. The situation is complicated in jurisdictions like the US where the discussion is still whether or not to allow online poker. Unreasonable taxes are often seen as a necessary concession in the fight for pro-poker laws. The large potential revenues generated by regulating and taxing online poker should be part of the conversation, but if those taxes are too high, not only is that unfair, it will also stifle the industry’s growth, potentially limiting the revenue the legislation is seeking to maximize.

While tax experts like Russ Fox are trying to educate the general population on the unfair tax laws, it doesn’t seem like anyone is pressing the issue in courts or in Congress.

Poker is a Global Game

Opportunity to compete against an international field.

One of the great aspects of online poker is the opportunity to compete against players from all over the world. Not only does this lead to a larger player pool and a better selection of games to choose from, but it also gives players a chance to challenge themselves against the best of the best. Most importantly, it brings people closer together. While poker can be an aggressive and fiercely competitive game, it’s also a means for social interaction. Friends are made through shared experience, and barriers between countries and cultures become less severe.

When France and Italy regulated online poker, they created segregated national markets that restricted players playing online poker in those countries from participating in an open international player pool. Senator Reid’s bill (which never came to a vote) imposed a lengthy period of market segregation for the US. Though it also had provisions for future expansion into the international market, limiting the liquidity of games can adversely affect the ability of online poker to be profitable for operators which can eventually lead to the collapse of the game in areas that implement segregation.

Belgium and Estonia have provided a model that allows their players to share in global liquidity for the health of their games. Unfortunately, it seems that advocacy groups are too caught up in their local struggles to be concerned with the ramifications of segregating player pools based on political boundaries. But this is an important issue that must not be thrown under the bus in exchange for a temporary solution.

Perhaps the European Parliament will pass EU wide regulations which could unify all of these smaller national sites. This would be a great first step towards establishing worldwide regulation and cooperation, provided the taxes and restrictions are not prohibitive to a growing market. Hopefully some compromise will be reached, in spirit similar to Belgium and Estonia.

Restrictions on Compulsive Gambling

Effective controls for responsible gaming as well as age and identity verification.

As Las Vegas Sands Corp. Chairman Sheldon Adelson recently reminded us, one big concern of opponents to online poker is the ease with which people can sign up and play, particularly as it relates to minors and compulsive gamblers. While playing online poker in the US has become more difficult in recent years, anyone determined to play can. Prohibition is not the way to protect people from themselves.

People with serious gambling problems deserve serious protection, which can only be provided by a regulated market. When sites operate in the shadows, they have little incentive to dissuade compulsive gamblers from using their software. Not only is it in the company’s immediate self-interest to serve the player, turning them away will not do much good. In an unregulated environment, there will always be another site to play on. But if sites are all regulated by one body, then a player can register with that organization, set their responsible gaming limits, and have those settings applied across all poker sites at once.

Deal a Fair Game

A fair and impartial deal.

Just as the right to play is the most essential thing the government can deliver, the right to play a fair game is the most essential thing a site can provide. “Rigged!” is the most common complaint among online poker players, and that is why the software of all operators needs to be subject to third-party audits from credible firms. A legal requirement to demonstrate fairness can be another benefit of regulation, but players should hold the sites responsible for this as well. Every site should have its software audited by multiple independent evaluators, and these evaluators should come from companies with a reputation for thoroughness and objectivity.

Dealing the cards randomly is not enough. Poker is a game where decisions are based on imperfect information. Each player knows his own cards, but not the cards of his opponents. When a site’s software supplies some players with more information than others, we have a huge problem. No one will forget the Ultimate Bet and Absolute Poker superuser scandals, where some users received an insurmountable advantage by seeing the hole cards of every player at the table. These scandals eventually became part of a 60 Minutes feature, but they would have never been exposed without the vigilance of certain players. While the amateur sleuthing makes for a good story, it brings up a greater concern. The poker sites appear inept at catching these cheaters on their own.

Protection from Cheats

Effective site security to prevent cheating, including bots, collusion, and data-mining.

While the AP and UB cheating scandals revolved around holes in the software, other cheaters rely on collusion, sharing their hole cards the old-fashioned way. One of the highest profile instances of collusion involved noted author and well-known instructor Nick “Stoxtrader” Grudzien. Allegations were made against his secret accounts on multiple occasions, but Full Tilt and PokerStars failed to recognize the cheating. The sites did not understand what was going on until one player analyzed masses of hand histories and wrote a 36-page paper explaining the collusion.

It is great that there are players willing and able to go to such lengths to catch cheaters, but it is ridiculous that the burden of justice has fallen to players. This is like a bank robbery being solved by one of its customers while bank security and law enforcement drink coffee and eat donuts. I am sure there are hard-working and intelligent individuals in the security departments at most poker sites, but I am also sure that those departments are understaffed and underfunded. Without proper security, players can have no confidence in the fairness of the games they are playing.

Poker is Not Against the House.

Fair and impartial treatment from sites and the law regardless of playing habits.

Several sites recently have experimented with anonymous tables. Bodog (now Bovada in the US) has instituted totally anonymous poker on all of its tables. One underlying question here is whether or not you are still playing poker if you do not know who you are playing against. As long as you know when a new player replaces an old one, I tend to think it is still poker, but I admit there is room for debate. Let us shelve that issue and look at two related ones.

First of all, the anonymous tables at Bodog are not actually anonymous. To a normal user, players are identified by nothing beyond their seat number at the table. But the original screen name or user number of each player is still transmitted to the poker client. An intrepid hacker can suss out the player identities, obtaining an unfair advantage. Other sites that instituted anonymous tables have had similar glitches.

The second and more concerning issue is the motivation behind Bodog’s change to its software. They want to minimize the advantage possessed by skilled players and discourage them from playing on the site. Unfortunately, penalizing winning players has become a growing trend in the poker industry. Two years ago, iPoker started pushing skins into banning winning players. OnGame has constructed a proprietary and incomprehensible method of awarding rakeback. Their aim is to funnel more money to losing players, since that money is more likely to stay on the site and thus become rake again. Everleaf has begun restricting which tables some players can join. Specifically, if a player wins more than €750 in one week, that player can only join tables with other winners. Legislative discussions in the US have proposed rating systems to identify winning players.

All of these anti-winner policies go against the spirit of poker and should not be tolerated. The goal in poker is to win money. That is how we keep score. While the majority of players lose more than they win and play poker as a form of entertainment, the essence of the game is player-to-player competition on an equal playing field. Sites seem to think they can weed out the winners and reduce poker to the status of any other casino game. But poker is a skill game and, as such, players of all skill levels must be protected equally.

The goal of a skillful poker player should be to win money, not to lose less than everyone else. Unreasonable rake structures can make winning impossible, assuring that everyone but the house loses in the long run. This goes against the spirit of the game, as poker is predicated on the notion that you can win by outplaying your opponents. Rake must be equally reasonable for all games. Discriminating against Omaha or Fixed Limit players is no more just than discriminating against winning players. Everyone deserves a fair shot.

Customer Support is Essential

Timely and informed customer support and transparency when an account is being investigated.

Many players keep substantial sums of money in their poker accounts, and many site-related questions are time sensitive. Most banks have a phone number to contact customer service, where representatives are available 24/7. Players with large bankrolls may have more money in their poker accounts than they have in their bank accounts, yet they rarely receive the same level of customer service.

Informed customer service representatives are necessary not only for financial questions, but also to explain convoluted site policies. Posts titled “My Account Is Locked And I Don’t Know Why” proliferate across online poker forums. People deserve to know what they are accused of when they are being investigated. It is in the US Bill of Rights; it belongs in the Poker Player Bill of Rights.

Account Security is Crucial.

Account security, including privacy of personal information.

For the same reasons players deserve customer service, they also deserve high-quality security. This extends beyond vigilance against cheaters to basic computer security. Every site should offer login options that do not involve the player’s screen name. They should have protections in place beyond a basic password. Each player should be allowed an RSA security token, improving security to two-factor authentication (something you know plus something you have). I am not a security expert, but site security should be regulated by someone who is.

In addition to basic account security, private data should be kept private. Witness the latest AP/UB debacle, where the personal information of over 3 million users was publicly posted on the internet. The data leaked included account name, real name, mailing address, and account balance. While this was a posthumous gift from AP and UB, no site should be allowed to survive such transgressions. People expect a level of anonymity online, but even live poker players do not walk around with name cards bearing their account balances and home addresses.

Players' Funds Need to be Segregated.

Quick access to funds kept in accounts separate from operating funds.

Within weeks of Black Friday, PokerStars was able to return funds to US residents in the full amount of their account balances. They were able to do this because they had the money on hand, with players’ balances kept in a segregated account. Contrast that with Full Tilt, which not only failed to keep the funds segregated, they did not even have the money at all. They had already disbursed these funds as “profits” to their shareholders. Due to unethical financial practices, Full Tilt lacked the liquidity to pay what they owed.

While the Isle of Man Gambling Supervision Commission requires PokerStars to keep player funds segregated, the regulatory body in France, which governs PokerStars.fr, does not. Yet PokerStars has become the leading advocate here by keeping their player funds in ringed accounts. They have learned from their success (and the failure of others) that sound financial practices are rewarded with player loyalty. Here is a site going beyond their regulated obligations, providing something which every site should provide. Unfortunately, we cannot always rely on an industry leader to set the bar so high.

While the legal situation in the United States necessarily complicates the process of moving money to and from poker sites, deposits are conspicuously quicker than withdrawals. A certain amount of leeway can be granted in the present climate, but effective customer service becomes even more important. With thousands of dollars hanging in the ether between poker site and bank account, a player deserves to speak to a human representative.