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Saturday, January 19, 2013

Sharks by the pool: How poker found a hot new home in the Bahamas - Americas - World - The Independent

Sharks by the pool: How poker found a hot new home in the Bahamas - Americas - World - The Independent


Sharks by the pool: How poker found a hot new home in the Bahamas

A decade after the online gambling boom began, it's still going strong

 
NASSAU
 
Late on Sunday night on Paradise Island in the Bahamas, long after the January sun had dipped beneath the pinky-orange towers of the sprawling Atlantis resort, a 27-year-old Bulgarian named Dimitar Danchev won the best part of $1.9m (£1.2m)in a poker tournament. The following night, a 28-year-old Yale law graduate named Vanessa Selbst won $1.4m (£900,000) and a week earlier, Scott Seiver, 27, won a little more than $2m (£1.25m), also playing poker at Atlantis.
Danchev, Selbst and Seiver were the champions of the three flagship events of the PokerStars Caribbean Adventure (PCA), the second-largest poker festival in the world, and the biggest outside of Las Vegas. The PCA has been held annually in the Bahamas since 2004 and celebrated its 10th birthday this year, offering five prizes of more than a million dollars to its biggest winners.
The festival has spanned almost precisely the first 10 years of the so-called poker boom, ignited in 2003 when an accountant from Tennessee named Chris Moneymaker won $2.5m (£1.6m) at the World Series of Poker, the most prestigious event in the world. Moneymaker had qualified for $40 (£25) playing online, and his unlikely success, coupled with a tremendously appropriate name, convinced anyone with an internet connection they too could become a world champion – a notion the online poker operators did everything they could to encourage.
The game underwent an unprecedented boom over the past decade and there are countless major poker festivals every year in the post-Moneymaker era. This year's PCA featured 40 tournaments contested across 10 days, the largest of which attracted 987 players and had a total prize pool of roughly $9.6m (£6.5m).
However online poker has been subject to some high-profile scandals of late, including indictments of company executives by the FBI, which resulted in the large-scale withdrawal of the online game from the American market. Its future had seemed imperilled; the previously unstoppable poker juggernaut had apparently been halted.
But it seemed few in the Bahamas last week had got the memo.
In down times at the PCA, the players either gambled among themselves in side games, or glugged cocktails in beach bars, beside yachts, lagoons and dolphin coves. Money rarely seemed to matter to any of them, unless it concerned the logistics of wiring vast sums to their bank accounts, or paying off bets made at restaurant tables as to who would pick up the bill.
The tournament won by Seiver – known as the "Super High Roller" event – cost $100,000 (£60,000) just to enter. Forty-seven people – including private equity millionaires, a co-owner of a student loan company and some of the fiercest poker sharks in the world – anted up the money and joined the fray. Greg Jensen, the co-CEO of Bridgewater Associates hedge fund, with estimated earnings of $70m (according to Forbes), finished sixth, won $286,200 (£175,000) and donated it to charities supporting the victims of the Sandy Hook school shooting in his native Connecticut.
Meanwhile the American press became fixated on the appearance of the Olympic swimmer Michael Phelps, who played the $10,000 (£6,000) "main event" sporting a backwards baseball cap and shaggy black beard – a "hipster" guise that attracted little but disdain. A rumoured appearance by the poker-player turned US-election seer Nate Silver did not materialise, leaving the familiar faces of the international poker circuit to go about their business largely as usual.
"I just can't get that excited when my friends win seven figures anymore, it happens eight to 10 times a year now," tweeted one player named Jonathan Aguiar, with tongue only slightly in cheek.
Post-Moneymaker, online poker sites rapidly became billion dollar concerns, with their branding attached to television shows and live poker tours snaking the globe. The new players, meanwhile, changed the accepted strategies of the game beyond all recognition.
Out went the old guard of grizzled-faced, cigar-chomping veterans, claiming they had a "feel" for the game and could sniff out a bluff. In came the new breed of maths students and computer whizz-kids, basing decisions on the more dependable precepts of probabilities, analysis and fearless aggression. The new poker enthusiasts played up to 20 tables simultaneously online and saw more hands in a week than an average old-school rounder had seen in a 30-year career.
Many new players were not even old enough to gamble in bricks and mortar American casinos (where the legal gambling age is 21) But they were making millions from playing online poker in university dorms or their childhood bedrooms, and analysts questioned how long the rise of the industry could last.
In the early days, online poker was predicted either to plateau quickly or to fizzle out, but the rise was seemingly unstoppable. The first prize at the inaugural PCA was $455,780 (£280,000), but by 2009 it was $3m (£1.8m). Similarly the World Series of Poker champion has earned no less than $8m since 2006, four times what Robert Varkonyi, the last pre-Moneymaker champion, won in 2003.
These days, the mainstream has apparently grown immune to the dizzying sums and reports significantly less frequently on poker, even though the game's paydays regularly eclipse the largest prizes in most major sports. Yet the plateau poker has come to occupy is still spectacularly lofty, even after the high-profile scandals and complications with international legislation over the past few years.
"If you look at any popular activity, it's going to have peaks and valleys," said Eric Hollreiser, the head of corporate communications at PokerStars, which is the largest "real money" poker site in the world. "But online poker is tremendously popular. Our success over the past 10 years has shown that."
Few valleys have proved as difficult for an industry to traverse as the one carved on April 15, 2011. On a day now commonly referred to by poker players as Black Friday, the FBI suddenly closed three of the major online poker sites to US customers and issued indictments against their founders on various charges, including bank fraud. In one fell swoop, the sites had between 30 and 100 per cent of their markets wiped out and left their founders facing potential imprisonment.
The sites have always vigorously denied any wrongdoing and the cases have not come to court. PokerStars immediately returned funds to its former United States based customers and continued to trade outside America, while many professional players re-located overseas to continue what had become a lucrative employment.
However when investigators examined the accounts of Full Tilt Poker, one of the indicted sites and formerly the second largest in the world, there was apparently a gaping void where most of the players' money should have been. The owners were forced to forfeit their company to the US Department of Justice and remain despised pariahs among their former customers. However after some extraordinary negotiations throughout last year, Rational Group, the parent company of PokerStars, struck a deal with the DoJ to take on both the name, software and debts of Full Tilt – a sum put at $731m (£420m). In November last year, Full Tilt Poker re-opened to players outside of the United States and quickly re-assumed its place as the second-largest site in the world.
"Some of the things that were discovered around the activities of Full Tilt Poker and in another sense Absolute Poker [another of the indicted sites, which has now closed down] gave poker a bad name," said Hollreiser. "We're going to spend years disproving that and getting the reputation back, not just of Full Tilt Poker but of online poker." PokerStars has sought, and been granted, specific licences to operate in numerous countries, including France, Italy and Spain. According to Hollreiser, a judge in Barcelona described poker as "'a-legal', meaning there was nothing to say it was legal and nothing to say it was illegal. This is why, when I look at the US market, it's very difficult."
He added: "We're hitting an interesting time in the evolution of online poker because it started out as an innovation, and like many innovations it moves quicker than players, it moves quicker than governments. And so we spent a good number of years way ahead of the curve, with governments unsure how to manage online poker."
Executives are now playing a waiting game with US lawmakers. While regulation for online poker appears inevitable – there are simply too many potential tax dollars to pass up—there is no firm indication as to how long laws will take to be passed, most likely on a state-by-state level.
Aces in the pack: Poker stars
Chris Moneymaker
The single most important figure in the game, Moneymaker's $2.5m (£1.57m) victory at the World Series of Poker in 2003, as a rank amateur who had qualified online for $40 (£25), lit the touchpaper of the poker boom.
Vanessa Selbst
A $1.4m (£880k) payday in the Bahamas this week made Selbst, 28, the most successful woman player in poker history, with total live tournament earnings of $5.8m (£3.65m). Got engaged to her long-term girlfriend on the eve of the tournament in the PCA.
Phil Ivey
Widely considered the best player in the world, Ivey has recorded winnings of $17.5m (£11m), and immeasurable success beyond the tournament scene. Previously sponsored by Full Tilt, Ivey weathered the scandal playing high-stakes cash games in Macau.

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