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Aug. 06, 2006
Copyright © Las Vegas Review-Journal


WORLD SERIES OF POKER: UNEASY DEALINGS

World Series of Poker tries to distance itself from Internet gambling sites

By HOWARD STUTZL
GAMING WIRE




A player was forced to turn his shirt inside-out during the first day of the World Series of Poker main event at the Rio because it had a ".com" as part of its logo.
Photo by Isaac Brekken.



Mike Larson of San Diego, bottom right, and Yale Klat of New York are pummeled by pillows by models at the Bodog exhibit at the World Series of Poker at the Rio.
Photo by Isaac Brekken.
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It's an unspoken partnership that has raised a few eyebrows.

The unusual link between the World Series of Poker -- owned by Harrah's Entertainment -- and the Internet poker universe invokes a number of descriptions and images. Symbiotic, curious and troublesome seem to top the list.

Poker's signature event is run by the world's largest gaming company, a 68-year-old casino empire licensed to operate more than 40 properties in 13 states and two foreign countries.

Internet poker sites are viewed as illegal by the U.S. Department of Justice, which says they violate three different sections of Title 18 of the United States Code.

Strange bedfellows indeed.

Think of the tabloid-reported Hollywood romance between Jennifer Aniston and Vince Vaughan; something just doesn't seem right and you know the relationship is bound to eventually head south.

Online poker observers believe that more than 40 percent of the 44,500 players participating in this year's World Series found their way to the Rio's makeshift poker room via the Internet, winning events and tournaments on pay-to-play poker Web sites. The prizes were either cash or a paid-for seat in the world championship event, which costs $10,000 to enter.

Harrah's isn't saying one way or the other.

"I honestly haven't spent much time thinking about what the (poker) dot-coms do or don't do because we're not in business with them," said World Series of Poker Commissioner Jeffrey Pollack, who is also Harrah's vice president of sports and entertainment marketing.

Online poker has a vastly different view.

"We have this synergy between us. Clearly, we are important to the World Series of Poker," said Dan Goldman, group marketing director for PokerStars.com, which has endorsement tie-ins with the last three world poker champions, Chris Moneymaker, Greg Raymer and Joseph Hachem.

"There is a percentage of people who are here because they learned how to play online. They either had some success and won money to buy in, or they won a seat," Goldman said. "One way or another, we have increased the popularity of poker in a way that has expanded the World Series beyond the hard numbers that you see."

This year's world championship event drew a record 8,773 entries and prize pool of $82.5 million. The winner will take home $12 million. Online poker backers believe the 56 percent increase in the number of entries in the final match over last year's 5,619 players is a sure sign of the Internet's power.

"When the initial numbers showed about 6,000 players in the final event, there is no question the early signups were the result of what we bring," said Victor Bigio, marketing director for Loudvision, a Toronto marketing firm that is affiliated with UltimateBet.com. "We give players the knowledge and skills they need to play in an event like this."

Pollack credited two key events for the growth of poker; the 2003 world championship won by Moneymaker, who was exclusively an Internet player, and ESPN's extensive television coverage.

"ESPN has done an enormous job of promoting this tournament and putting poker on TV in a new and exciting way," Pollack said.

The loose connection between Harrah's and online poker is understandable but at the same time uncommon, even for state gaming regulators.

"We recognize that this is a difficult and gray area to look at," Nevada Gaming Control Board Chairman Dennis Neilander said. "People who won seats (via the Internet) are a concern. But at the same time, how do you know that a person buying in with cash didn't rob a bank?"

There are two types of Internet poker sites; dot-coms, where people gamble real money in cash games and in live, online poker tournaments; and dot-nets, free-to-play Web sites that are described as teaching tools to help players understand poker.

The online poker community says they keep the dot-coms and dot-nets completely separate,

The Review-Journal explored several dot-net poker sites, including PokerStars, PartyPoker, ParadisePoker, DoylesRoom and Full Tilt Poker, and could not find any direct link to the company's dot-com sites.

"We assume and we hope the players figure out they can come over to the dot-com side and play for real money," Goldman said.

Jaclyn Lesch, a spokeswoman for the Justice Department said the federal government believes that gambling by Americans on the dot-com sites is illegal, violating the Wire Act, the Travel Act and the Illegal Gambling Business Act.

Federal prosecutors believe it is illegal for the online poker industry to accept wagers from Americans. The sites are housed in foreign locations such as Costa Rica, Isle of Man and Curacao. Some poker Web sites, such as an operation run by the World Poker Tour, won't accept bets from the United States.

Neilander said the Justice Department has jurisdiction over online wagering activities and that Nevada regulators are tasked with ensuring the state's gaming license holders steer clear of any association with online gambling. Because wagering on the Internet is easily accessible, many gamblers, he said, don't realize they could be viewed in some circles as breaking the law.

"We've talked with poker players and they are unaware that they are potentially doing anything wrong (by gambling online)," Neilander said.

Online poker entities like to promote the number of players they seat in the World Series of Poker championship event.

PokerStars said it qualified 1,623 players for this year's game and 1,116 players in 2005. UltimateBet said it was responsible for more than 200 players in the final event while DoylesRoom lays claim to about 50 players.

How online poker businesses transfer the funds that cover a players' entry fee to the tournament remains a question.

Neilander said the World Series of Poker can not accept a money wire transfer if it is known the original source was a poker dot.com. He admitted, however, that it is nearly impossible to make a direct link.

"First of all, we do not accept money from any dot-com site," Pollack said. "If an individual is registered by a third party, that third party signs an affidavit saying the funds did not come from illegal sources. So we are not in business with dot-com sites."

Michael Kogan, who oversees marketing and business development for the Doyle Brunson Poker Network, said the online site uses a third party for money transfers, such as an Internet banking service.

"We enjoy our relationship with Harrah's and the World Series of Poker," Kogan said. "Obviously, we're not going to do anything to damage that understanding."

Bigio said Loudvision handles much of the promotion for UltimateBet and takes care of any wire transfers.

Other poker Web sites were evasive in discussing the money issue.

"That's a question I can't answer because I have no expertise in that area," Goldman said. A PokerStars public relations representative promised to have a company executive clarify how the entry fees are transferred to the World Series, but the person was never made available for questions.

Representatives of some poker Web sites did not want to talk with the Review-Journal when told the nature of this article.

The poker community believes the dot-net sites, however, help boost their image.

The Justice Department considers the dot-nets a loophole in the system.

Federal prosecutors have stopped the dot-coms from advertising on television, radio and in print. In January, St. Louis-based Vulcan Sports Media, which publishes The Sporting News, paid a $7.2 million settlement in the U.S. District Court in Missouri for allowing Internet gambling advertising in the magazine.

However, many of the poker Web sites are advertising on ESPN and with every major network broadcasting company, using their dot-net locations as the hook.

This has allowed Harrah's to associate with Internet poker during the tournament since the government has all but ignored the dot-nets. Pollack said the World Series of Poker struck a product placement deal with one of the dot-nets, PartyPoker, which paid Harrah's a fee to place its logo on the tournament poker tables.

Gaming Control Board member Mark Clayton said the dot-nets are viewed as legitimate business entities because of how the Justice Department has addressed the matter.

"Harrah's approached for approval," Clayton said. "We have no objections to the dot-nets as long as the sites don't have a button click that allows you access to the dot-com sites."

Logo shirts and hats of every variety and style promoting the poker Web sites are being worn in the tournament area by both players and fans. However, one of the 74 World Series of Poker rules handed out to players limit the size and wording on any logo. Dot-com advertising is prohibited.

"We make announcements every day during every event," Pollack said. "We offer tape to cover up the logo, we ask them to change their shirts and we also direct them to our retail stores (to purchase a World Series of Poker logo shirt). There's a wall between us and the dot-coms."

Internet poker representatives understand the concern of Harrah's executives.

"We knew the rules coming in and it's something we've tried to abide by," said UltimateBet's Bigio. "We want to promote the free site and that's what we're able to accomplish."

During the Rio's four-day Gaming Life Expo, a gambling trade show run in conjunction with the four-day opening round of the world championship event, 235 exhibitors were featured over the expansive 23,000 square feet Pavilion ballroom.

Almost two dozen Internet poker sites -- carrying the dot-net distinction -- had large and elaborately decorated booths operated by scantily clad women with one goal -- to entice potential Internet poker players to register with the online domains.

Some booths offered poker fans the opportunity to greet their favorite Internet poker-sponsored players. The line to meet 1989 world poker champion Phil Hellmuth in the UltimateBet booth stretched 20 deep.

Many of the poker dot-nets offered mini-tournaments with the winner getting a chance to win a seat in next year's world championship event.

The Rio estimated attendance at the Expo was at least 150,000.

Outside the tournament room, several of the poker Web sites are leasing convention space for large hospitality suites, all with the dot-net moniker.

"This is really a room that celebrates Doyle's history but also give our players a place to go," Kogan said the Doyle's Room suite that looked like a museum commemorating Brunson's career, which includes two world poker championships and 10 World Series bracelets.


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