Saturday, February 1, 2014

Sheldon! Stop Scaring People Needlessly!


No, not THAT Sheldon.  I mean “Casino magnate and GOP super-donor Sheldon Adelson.”  The money and power behind the new Coalition to Stop Internet Gambling.  He’s trying to scare people.  Again.

It’s a common ploy in politics, especially when it comes to gambling.  We’ve seen it before, from others – an expansion for gambling is proposed – new Native American casino, more games for existing casinos, etc.  Opposition drags out the old, tired, and disproved tactics – mob money, crime, ruined families, compulsive gambling, and now, in the 21st century, TERRORISM! 

What’s ironic is that the opposition is usually funded by those who actually get their incomes from the same type of activity they’re so vehemently opposed to, as long as it’s happening somewhere else.  When tribes in California wanted casinos, the opposition was mostly existing casinos…in Nevada. Here in my home state there have been a couple of (losing) voter propositions to add metro Portland casinos, and the money mostly comes from existing Native American casinos here.  Many other similar examples can be found.

The point is simple – if you’re doing what you think someone else shouldn’t be doing, you better come up with a reason.  FEAR is not a reason; it’s an emotion, and as such it’s somewhat effective only on those who aren’t too bright.  It doesn’t matter how many “facts” you toss out there – if it doesn’t allow us to think, but rather, makes is cower, it’s not in the public’s best interest.

The two most recent shots from the Coalition are an Op-Ed in USA Today and a new website (and challenge) that portends to uncover the potential for money laundering by terrorists (the idea fronted in the Op-Ed).  I won’t do much about the Op-Ed, as it is wonderfully dissected by the folks at Online Poker Report here.  And by dissected I mean gutted and left out to wither and die.  It’s the same old scary crap.

More worrisome is the challenge from poker player Bill Byers.  He states that he has sent a letter to the Director of the New Jersey Division of Gaming Enforcement, David Rebuck, which warns of the “vulnerabilities” of online poker.  First reported by Poker News here, this is the basic idea of the Op-Ed, that online poker carries far too many risks for such nebulous activities, and that such money laundering can go undetected (and subsequently states should not allow online poker, etc. etc.).

So I went to the http://undetectablelaundering.com/index.html website, and looked around.  I spent time looking at several of the “examples” and “explanations” and I have come to a very unscientific conclusion which I still believe is correct:  Bullshit.

Let me first state than neither individual involved in this site, Bill Byers (above) nor James Thackston, a technology professional with a background in the aerospace, manufacturing and energy industries (and co-author of the Op-Ed along with former N.Y. Gov. Pataki) are cranks.  They use very sophisticated calculations and “large numbers” to show how such a laundering system could be used.

Emphasis on could.

For despite the potential, there is no evidence that such a system has actually BEEN used.  Further, if you look at the examples on how money is moved from player to player (the “wash”), it still only shows “movement” and not actual “withdrawals.”  Money still in your account doesn’t let you buy weapons and ammunition.  Ask the many players who had money locked up at Full Tilt.  The only time “profit” is shown is when the mules (players involved in the collusion) win pots against “bystanders” (there are usually four mules at a 10-player table to make all this happen.

The one example I decided to completely take apart (and I mean this is the literal sense) is the 10-Hand Example Showing Money Transfer and Profit Making Opportunity.  Well, Jeebus.  I’m no terrorist, but I desperately want to play at this table.

The 10-seat table is a 100/200 NLHE cash game, and features four mules and 6 bystanders, and it “works like it should” in that money was successfully moved from the two designated loser mules to the two designated winners.  Except that even one of the loser mules came out ahead.  And no wonder:

1.     My assumption is that the six bystanders are supposed to be “typical” players at a 100/200 level game.  My ass.  Two are very tight (and with the cards they got, no wonder).  The others were loose, and two were damn near maniacs…sort of.  They saw 50% and 70% of the hands, but mostly called (with hands like 6-9 suited), raised but ONCE.  Hardly a maniac; more like a loose passive.  At 100/200?

2.     Almost half the “profit” came from the loser mules in two hands – one was a stone bluff against a weak player (mule missed his straight and bet like he made a flush and bystander folded); the other was when mule flopped a straight.

3.     The winning mules had powerful  hands – KK and JJ on consecutive wins, and AQ suited (Ace flops and stands up when bystander missed double barrel straight and flush draws on all-in move).

4.     Oh, most important – on the six (of 10) hands that the mules won, THE CASINO FORGOT TO TAKE THE RAKE.

Damnation, I want to play here.  I have never played at the 100/200 level, but if this is the kind of action I might find here, I’m ready to mortgage the house.

I’m sorry, but this seems like a lot of work and a lot of luck to move a bunch of money around.  And it’s doesn’t smack me of any kind of real scenario.  Is it possible to launder money this way?  Possible - yes.  Probable?  I can’t see it.

Can money be laundered by other means?  For the answer, let’s go to the actual FBI response that triggered the Op-Ed piece in the first place:


Physical casinos?  You mean, like Sheldon Adelson owns?

Jeebus.

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