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3-2-1 Blast Off!

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This is a hand from the Imperial Palace mixed game a few weeks ago. We'd been playing for about four hours with mildly active betting. Like what usually happens in this game, everyone had finally relaxed and was having a good time.

We were headed into our second round of 3-2-1 Omaha for the night -- a particularly sick game with three flops which can play with either of two turns and a final river card. As with any other form of Omaha, all players are dealt four pocket cards and must use exactly two from their hand along with exactly three from the board. With a full table of eight players, that puts 44 cards in play (47 if you count the burns). Winning hands in 3-2-1 tend to be extremely high-- it's usually something like a high full house, or a low set of quads that will bring the pot down.

It doesn't matter if you don't know 3-2-1 Omaha -- in fact it's better in many ways if you don't -- because the underlying lesson here has to do with some basic poker skills.

Last year’s death of Bobby Fischer brought about the predictable response from the mainstream media:

A) The guy was a serious anti-Semite.

B) Oh, and did we mention he was a flakeball and an anti-Semite?

C) He just happened to play chess pretty damn well, but that was a long time ago, so it’s not worth talking about. But you need to know he was an anti-Semite.

But what surprised me was no one — no holier-than-thou bloggers, no 2+2 forum junkies, no probability table memorizers — connected the obvious dot…Bobby Fischer’s biggest contribution to the 21st century may be well away from the black and white checkerboard and instead lie firmly on the green poker felt. Here’s why:

Let’s turn back the clock. 35 years after the fact it’s hard to imagine just how huge Mr. Fischer was as a personality and presence. This is definitely one of those cases of “if you weren’t there, you wouldn’t get it.” The cold war was white hot: Scythe Bearing Commies vs. Star Spangled Imperialists with Brezhnev and Nixon leading the way. We’ll point our missiles at you, and you damn well better quit pointing those missiles at us. People in the West with anything even close to a Slavic accent were shunned. At the Olympics beautiful routines would be pulled off by “amateur” Westerners, only to get laughably low scores from (undeniably ugly) Iron Curtain judges.

In the middle of all this rises Bobby Fischer.

For about a year and a half now the Imperial Palace poker room in Las Vegas has been running a $3/6 mixed game on Sunday nights at 19:00. HORSE (hold’em, omaha, razz, 7-card stud and stud 8-or-better) looks remarkably tame compared to the ten game mix they spread:

Omaha hi/lo

A-5 triple-draw hi/lo Sometimes known as “California split,” the best low hand (8 qualifier) splits with the high hand.

Stud 8-or-better

Badugi A 4-card Korean triple-draw lowball game (ace-low) where the best possible hand is a rainbow A234.

2-7 Triple Draw

Baduci A split game where the best badugi hand splits with the best 2-7 hand. Especially odd since there isn’t a default scooping hand: the best badugi is A-4 rainbow, but the ace plays high in 2-7. Nevertheless, a rainbow 2345 with any 7 will usually sweep.

3-2-1 Omaha Omaha high with three flops, two turns and one river. Any flop can be played with either turn. That’s right, 12 board cards.

4 Card Ocean Crazy Pineapple Essentially a super-bastardized hold’em, players start with four pocket cards and have to discard one after betting on the flop and one after betting on the turn. In addition, there’s a sixth board card dealt, “the ocean.”,

Razz

Playing at an 8-handed table, it takes about 3.5 hours to make a complete cycle through all the games.

This madness started about half a year ago at the Palace when LasVegasMichael, the site administrator over at AllVegasPoker.com, moved the game over from Treasure Island.

There will be those who sniff and sneer but I’m here to tell you, absolutely honestly, it’s my favorite game spread on the planet right now. It’s not unlike having your college dorm game spread under a surveillance cameras — assuming, of course, that you could watch Michael Jackson impersonators in the distance as you played. Free cookies, double comp points on your Harrah’s card, rake capped at $3/hand (with no flop/no drop) and a truly fun bunch of people to play with.

It’s an exceedingly bad place to go if you’re trying to hide behind the seriousness of your sunglasses; but absolutely spectacular if you tire of the tedium of hold’em, want to wrap your brain around a few new games (for low stakes) and just feel like unwinding for a few hours.

I play it any Sunday I’m in Vegas — you should too. Call ahead to 702-794-3225 on the day of play to get on the list.

There’s an interesting hand that came up in this game a few weeks ago, I’ll write about it next week.

Yesterday I left you with the federal government issuing a cease and desist order to online sports betting organizations telling them to no longer accept American bets. While everyone else either ignored the order or closed up shop, there was a sole fighter…

Jay Cohen, an American ex-patriot was running the World Sports Exchange (aka “WSEX”) in Antigua. He basically said, “You know what? I spent a lot of time, money and effort setting this site up and you’re not going to take it away from me. I’m coming back to the States to fight it. Oh, and I think your security lapel pins look goofy too.” It was a truly brazen move that I admire for its forthrightness, if nothing else. (I mean, come on, how easy is it to not come back to the country and stand trial.)

Mr. Cohen was summarily fast-tracked to trial, tried and convicted of violating the Wire Fraud Act. He was sentenced to 21 months in a federal penitentiary. It is important to note that to date he is the only person in US history to be convicted and sentenced for “Internet gambling fraud” (my term, not legalese).

In the sports book world not so many people were laughing any more. The event polarized the business segment with people either laying low or getting out all together.

This emboldened the FBI who began casting their net a bit wider. They started with sports books that didn’t have 800 numbers, then moved into threatening pure casino sites (craps, roulette, blackjack, etc.) and then turned their focus on poker.

From the legal standpoint of “here’s what’s going to happen to all you criminals now” two big things happened in the poker world in fairly quick succession:

One was the arrest and imprisonment of David Carruthers (CEO of BetonSports), snapped up as he was changing planes in Fort Worth, TX when flying from the UK to Costa Rica. He was jailed with much fanfare but eventually released with almost no notice. No matter, it was more than enough to send chills through the footed pajamas of every person even remotely associated with Internet gambling.

This act was quickly followed by the passing of one of the most misunderstood pieces of legislation in modern law, the Unlawful Internet Gaming Enforcement Act (UIGEA).

I have to back up a bit here. The UIGEA, a bill designed (amongst other things) to nip Internet gaming in the bud is a case of US law making at its finest. Versions of the UIGEA had been circulating in one incarnation or another through the House and the Senate for some time, but they’d never put enough firepower and substance to the bill to get footing. For months (bordering on years) different incarnations of the concept had withered and died in committee. But every session some version of the bill came closer to passing. In a last-minute ditch effort, the UIGEA was attached as a rider to the SAFE Port Act (aka “SAFE Harbor Act”). Even though the UIGEA had nothing to do with things such as shipping container security and requirements for maritime facilities, once it was a rider, it was a part of the bill (as an aside, this is how nearly all “pork” makes its way onto bills). Remembering that this is coming out of a congress supporting the “war on terror” (even though congress never declared war, and they’re the only political branch that can), what politician isn’t going to vote for a “more secure America?” The bill passed the House 409-2 and the Senate unanimously.

The SAFE Harbor Act was passed in the last half hour of congress in the 2006 session. The UIGEA provision was tacked on so late that the wording of that particular title is not included in the official record of the congressional day — it had been submitted after the deadline for publication. I’m only aware of four congressmen who were aware of the UIGEA rider on the SAFE Port Act — I’m certain the majority had no idea it was there.

Now what’s interesting is the UIGEA does not say that Internet poker is illegal. In fact, it doesn’t mention poker at all. Instead it focuses on banks and money transferring organizations (think PayPal-like companies -ala NeTeller- and you’re on the right track). The bill goes well beyond the thin line of insanity explicitly saying things like games of chance are illegal, but lotteries are not. It implies that betting on legalized horse racing is okay, but wagering on dog races is not.

Anti-Internet gambling types quickly grabbed the reins saying that the UIGEA passage definitively proved Internet wagering was illegal. And even though that’s not what the bill actually says, the timid, the meek, the illiterate and the ultra-cautious believed it. (When you hear someone say, “Isn’t Internet poker illegal?” it’s almost certain it’s because they remember this bill in their hazy memory.)

The majority of online gaming sites slammed their doors to Americans — Party Poker probably being the biggest of those. This, in turn, opened the door wide for Full Tilt and PokerStars. They were the biggest pair of online players in this arena and Party’s exit flushed their coffers with cash, almost overnight.

The passage of the UIGEA emboldened the states to pass laws against the absolute raw terror and moral corrosion of online gambling sites. Quickly several states stepped forward and passed laws that either implicitly or explicitly prohibit Internet gambling, partially because they understood that the responsibility lies at the state level and the UIGEA was not an Internet poker prohibition bill. In Illinois, Indiana, Louisiana, Montana, Nevada, Oregon, South Dakota, Washington and Wisconsin, if you play poker online, you’re breaking the law. The way the lock-down works varies from state-to-state (in Nevada, for example, you’re not allowed to place a bet with anyone that doesn’t have a license from the Nevada gaming commission — none of the online sites do).

The interesting wrinkle here is the states aren’t allowed to have direct dealings with other national governments. Don’t take my word for it, look at the Constitution:

No State shall, without the Consent of Congress, lay any duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

Which means only the federal government can act as the enforcer and go-between with, say, Idaho and the Isle of Man. But the feds aren’t concerned with problems such as those, they are (justifiably) far more worried about little details like international terrorism, the drug trade and whether or not the dollar can stay afloat in the current market conditions. As you can see from what you’ve read here, the legal limbo gets very twisted pretty fast.

As an American kid you’re taught that things are either legal or illegal and the line between the two is fat and distinct. As you’ve read through this, I’m sure you can see it’s a little more complicated than that.

My guess is the legal situation will stay the way it is right now for quite awhile (maybe forever). The tack will be to have government officials (especially the enforcement agencies) froth at the mouth, making sure that they spread enough fear, uncertainty and doubt through the public at large. That’s enough to keep the average person saying, “Internet poker is illegal,” which is probably enough to make them happy.

If the federal government decided that Internet poker should legalized, it will be for exactly one reason only: taxes. It follows in classic American political style — lay down a heavy “sin tax” and have it join liquor and tobacco as a huge money producer. And it’s hard not to see how it might not be a good shot in the arm of the government…right now billions of dollars are being paid to foreign countries in the form of computer services and taxes. All those greenbacks could come right back to the US. More than that, though, the US government could (very legally) provide oversight, helping to ensure that the online games are somewhat fair and reasonable.

And let’s face it, that’s more assurance than we have right now.

Again, I’m not an attorney and nothing here should be taken as legal advice, but if someone asks “Hey, isn’t Internet poker illegal?” you’ll have a better idea of what the answer is than anyone else in earshot.

Seems like a simple question, sure, but it's remarkably difficult to answer. I'll give you some background today and the thrilling conclusion tomorrow.

Let me start by saying I am not an attorney and this should not be considered legal advice. If you want a definitive answer to the question, your best bet is to seek a gaming lawyer. When you do, be sure to bring a big check book, a fluffy pillow and your favorite (legally prescribed) mood calmer with you because what you'll ultimately get is an expensive, long and frustrating response.

For all of you cheapies with YouTube attention spans, the short answer is this:

If you live in the states of IL, IN, LA, MT, NV, OR, SD, WA or WI, the answer is absolutely "yes," Internet poker is illegal. You have a law in your state that definitively prohibits Internet poker. If you play online in those states, you are a criminal. If you live in any other state, the answer is "maybe yes, maybe no" (probably better here is to think in terms of Magic 8-ball, where the answer would be "REPLY HAZY - TRY AGAIN" -- without the ability to re-shake the 8-ball).

I find the longer answer really interesting because it's chock-full of things that you actually never learned in civics class in school. It also gives you a peek deep under the hood of the American political roadster, including a look at the power plant that is in need of a serious tune-up.

When I co-founded Team Nuts (the company that ultimately took controlling interest of CyberArts Licensing), the first thing we did was hire a knot of lawyers to make sure we wouldn't end up in the slammer. (1) To be clear, I'm such a legal line walker that I don't even get parking tickets, so for damn sure I wasn't going to go to the Big House for writing software. (And I'm guessing that any conversation in the yard answering the question: "What're you in for?" with "Poker coding," wouldn't have a good ending. Although I probably would get a few new friends that way.)

To let you know precisely how convoluted this can get, in the early days of our company there was a point where we had twice as many lawyers working for us as we did programmers (ten and five to be exact). We spent several thousand dollars and came up with very few definitive answers to what seemed to be an easy question(the essence of a corporate lawyer is to say "no" to whatever you've asked as they drop the bill on you). We also learned some remarkably surprising things.

But before we get to the good part, we have to turn the clock back a bit...

Contrary to what you were probably taught in school, the United States of America isn't a true pure democracy, but rather a federated republic. The federal government was originally intended to be primarily responsible for the protection of the country's boundaries, international trade and to a lesser extent, interstate commerce and communication.

In the early days of America the rights of states were a big deal, mostly because the founders didn't want to see the US become another Britain/monarchy/generally awful place that overtaxes tea and dresses its military in a lot of red. The over-riding thought of the day was that by ensuring the states have a certain level of sovereignty and decision making, the national collective could be more powerful: local laws, customs and attitudes of the states could be protected by the broader oversight of a Federal government. For the time this was a novel, radical and extremely good concept -- a logical and yet super-daring step forward from the Magna Carta in England. In brief, states are responsible for the moral fiber and well-being of their citizens. (2)

We see the knock-on effects of this even today. The difference in jurisdiction between the state and the federal government is the underlying reason that you can place a roulette bet legally in Atlantic City, NJ, but not in Ewa Beach, HI; it's also why you risk getting busted for going to a prostitute in Eek, AK, but not for getting your rocks off in a legally authorized facility in Pahrump, NV.

In the strictest sense of the word, the federal government would be overstepping their authority and bounds if they said "Internet poker is illegal." That's a concept that in the absolute purest American Constitutional sense should be strictly left to the jurisdiction of the state.

However, the federal government does look at interstate commerce. So if someone set up a poker site in Wyoming and someone else played on that site from Illinois, the fact that you were breaking a state law through interstate commerce could be enforced by the Federal government. Putting it another way, Wyoming state police can't easily go after you in Illinois, but the Federal Bureau of Investigation (FBI) can. (This, by the way, is precisely why all online gambling operations are set-up offshore.)

As you would guess, the situation has become more complicated since the founding of the United States. Populations have swelled. Several states have been added to the Union. Organized crime has gained power and threat. Take these reasons, put them in a blender, add a general push by the Federal government to dissolve the power of the states (both directly and indirectly using such levers as Federal matching funds), press start and you'll get a frothy shake of the current political environment.

A great example of this in action is to look at the Interstate Wire Act (often called the "Federal Wire Act") of 1961.

In an effort to stop organized sports betting operations on the east coast of the US, the federal government passed a law making it illegal to place a bet "over the wire." What it meant was you couldn't place a sports bet over a telephone line without federal ramifications. The law was possible because it concerned interstate commerce (and certainly none of the states would argue against it). The law was necessary because it drew a very distinct and exact demarcation saying "if you cross this line, you're in trouble and this is what will happen." (3)

It worked like a charm. Sports books were brought quickly (and in some cases brutally) to their knees.

When the Internet sprang up, the FBI was quick to say that if you were betting online -- even if you were placing that bet outside the country -- you were in violation of the Wire Fraud Act.

Now it's important to remember a few things here.

One is the FBI is in the enforcement branch of the Federal system. They are not the people who pass laws (that would be the congress), nor are they the people who decide if you have broken a law (that would be the judicial system). Having said that, it *is *important to remember that they are the people who will leap through a window and put a gun in your face if they think you've broken a law. Which automatically means it's important to give them their space.

Another thing to keep track of is that it's unclear if the Internet is "over the wire" (again, the FBI are not the people who determine if that's true -- that would be the courts).

And still another is the Wire Act only mentions sports betting by name, *not *poker. (Always remember: laws have exact words for a reason.)

In the late 90's, the FBI sent out a cease-and-desist letter to most (if not all) of the major online sports books saying they were in violation of the Wire Fraud Act, stating if they were taking bets from Americans, they were breaking the law.

It's very interesting to note that the initial focus was exclusively on sports books also using toll-free phone numbers. My guess (although no one in the government has ever said this, so it's pure opinion) is they chose those sites specifically so they could always use the Wire Fraud Act as a back-up in trial if push came to shove.

The notice brought about a mixed response. If the people were running the sites were "foreigners" they tended to either laugh (and make a note never to vacation in the US again), or grumble and make modifications to their software to no longer accept US bids.

If Americans were running the sites they pretty much either sold their interests or decided to leave the States for keeps. No one that I know of opted for the modification angle (probably because they either thought it was too hard or too risky).

There was somebody who stepped forward, though. I'll tell you all about him, as well as bundling everything else up in a box, tomorrow.

(1) - I'm using "knot" as the collective noun for a group of lawyers, although I'm not sure what the proper term actually is. It's what you call a group of toads, so I'm assuming it's close enough. And you better believe for the amount of money we paid them, I can absolutely call them whatever I want.

(2) - "moral fiber and well-being" isn't a legal phrase, but was uttered in passing by the best gaming attorney I ever met. It describes very accurately the absolute core of both the feeling and intent of the founders of the US legal system (think: "those guys with wigs that are on US currency").

(3) - A huge difference between the US and Britain is that in America laws are passed to well-define what is and is not legal -- in Britain, new possible offenses are looked at in relation to past precedent.

After months of delays on my part, Red's Deal (Re:D) is finally real -- or at least as real as can be at this moment.

Re:D is here to provide you with two pieces for your to consideration:

The Main Event is designed to give you a look at all aspects of poker. The focus here will often be on current events and low-to-medium limit play. In the world right now there's plenty of talk and coverage of plays in mutli-thousand dollar entry tournaments, but I'll spend a lot of my time talking about a world that's a little more realistic than that. In general we'll try to update this section at least three times a week.

View from the Rail is where I write about whatever I please at the moment. Entries in this section will be sporadic, but with any luck at all you'll find them as some combination of entertaining, thought provoking or helpful.

For the time being we're not allowing comments on the site -- only because I'm trying to avoid the idiocy of Yahoo! news story comments. That situation will definitely change in the future.

Expect lots of stylistic and prettification changes over the next few weeks (including my current battle with returns).

I'm glad you're here.

It'll get better, I promise,

Mark "The Red" Harlan

April 1, 2009 (no foolin')