Funny Poker Sites You Should Know About

Date: Thu, Aug 28, 2008 Internet

Hats off to the boys and girls at FuzionPoker.com This site is funny, and in a good way with lots of unique content with a very funny twist to it. If you haven't checked it out before it's worth a look as you are sure to find some unique content you haven't read before. Thanks to my good friend Cheryl for pointing the site out to me as it had been a while since I had been there. If my memory

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Poker Community Waits for 60 Minutes Story

Date: Wed, Aug 6, 2008 Internet

The Poker Community is waiting to see the new 60 Minutes story. 60 Minutes plans to broadcast a story focusing on on-line poker. How this investigative report is to play out remains vague with speculation from the on-line poker community stating that this report could be either good or bad for on-line poker. Which way will it slant? There is anticipation that 60 Minutes will portray on-line

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WSOP Madness - Tiffany Michelle and Tony G

Date: Thu, Jul 24, 2008 Internet

The 2008 WSOP so far has had it's fair share of controversy, as any good WSOP seems to do so the past few years anyway. This year, poker player Tiffany "Hot Chips" Michelle had a chance to make history and become only the 2nd woman at the final table of the WSOP, plus give a huuuuuge boost to poker in general as she is well... not called "hot" chips for nothing.

Tiffany finished 17th in the 2008 WSOP, and it looks like TonyG, major share holder in pokernews also employed Tiffany as a reporter and even worked a deal to help get her in the main event, which soured when Tiffany and her agent secured a deal with Ultimate Bet for sponsorship instead of working with TonyG (PokerNews) for the sponsorship opportunities.

Tony comments in his blog:

As I thought about it all, I said to Jeff that if he put up $4K, I would put up $6K but I would have all the rights to Tiff in terms of endorsement. I know Jason and Tiff both heard me say this. Jeff immediately said yes, that he would do it. I was under a lot of pressure right then because I had run out of cash and even had to borrow money to stake her. I told Tiff that she would have to sign a contract and I wanted it understood that I wanted the rights from anything that might come of her playing and placing in this event; at the time, it was kind of like buying a lottery ticket. I was pretty excited and pumped because I had 35 players in the main event and very high hopes that some of them would do very well and win, of course I was interested in what it would all mean to PokerNews in terms of traffic and new exposure.

See more on this post on his Tony G's blog here but it looks like he is letting this go according to his post at the very bottom of Tony G's post. You can catch the discussion of this at the major forums like P5's and 2+2.

You can also listen to Tiffany Interviewed on PokerRoad.

Coming from the poker perspective, this could have been so much better had Tiffany worked out a deal with TonyG, PokerNews and Poker Stars.com as Tony says in his blog... and even better had Tiffany made the WSOP final table, it would have been like a Chris Moneymaker effect all over again.

Here is Tiffanys statement at Wickedchops who says why was she singled out to wearing only PokerNews stuff while other players had lots of logos and pokernews stuff on it as well.

Ahh, maybe next year.

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Phil Laak Plays WSOP In Disguise

Date: Wed, Jul 9, 2008 Internet

Phil Laak, one of pokers most interesting personalities decided to play the 2008 WSOP in disguise. He dresses up like an old man and no one knows past the entire 1st day.

Kudos to CardPlayer for a great video interview with Laak where he breakdowns all of the details that went into why he did what he did.

It's an excellent interview, talking about not only the social aspect of undergoing a professional makeup artist that was rushed in a four hour session, compared to how he had to use the 'old man' image against his poker opponents. Excellent interview and a very cool and intriguing thing from Phil Laak, one of poker most outspoken poker personalities.

Here is part 2 of the interview and here is a photo of Phil Laak in Disguise and you can discuss Phil Laak's WSOP 2008 Main Event Disguise here.

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What's New at the Kick Ass Poker Blog

Date: Tue, Jun 17, 2008 Internet

Now that Haley's full time working with the good folks at Poker News, and Canada Cal is ice fishing and timber gathering in the frozen north, we figured it was time to give a quick update about the blog.

Haley still has access and promises the occasional post every now and then, and she is more than welcome to at anytime. We'll also be posting more interesting news from around the world of online poker and discussing current topics of interest, ranging from strategy articles, which in all honestly are mostly going to be found in our Kick Ass Poker local blog. This will remain the place for the weird, interesting, and random poker news and controversy.

Haley is covering the 2008 WSOP live as part of the team with PokerNews and we wish her the best!

We are passively looking for someone to take over the roll of regular blogger here at the KickAssPoker blog, but it's not easy to replace Haley's shoes. If you're interested, feel free to post a comment or drop us an email, to support (AT) kica$$Poker d com, no dollar signs (damn spambots).

We got our first set of translations finished and live, and they included a German Translation of our PokerStars Download Guide, a French Translation, " téléchargement pokerstars " and a different GermanPokerStars.de Review.

We have also added in a handful of poker strategy videos including this Sit N Go strategy video series at Full Tilt.

Good luck at the tables!

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The Other Side of the Dry Side Pot Bet

Date: Wed, May 21, 2008 Internet

Hi, all. I received a note from a "fan" -- didn't know I had those, per se -- who wondered why I hadn't been posting here lately. Actually, it's just been a case of too busy and too much, and KAP bosses Jason and Brad are still looking, I believe, for someone to step in here on a more regular basis. My work schedule no longer allows me to dedicate as much time to "fun" poker postings as I once had, and media restrictions at the WSOP (where I'll be spending the summer), all but preclude from doing anything for my Kick Ass friends for the duration.

Them's the breaks, unfortunately.

That said, I'd like to return here with a more poker-y tale about the pros and cons of dry side pot betting, a concept that pros understand innately. For the most part, casual and average players know the term, but don't really get the subtleties involved.

It's a great post for here because it's strategy-related, and it speaks to the audience that reads this blog for the most part. Pros don't need to bother; Rizen (Eric Lynch) isn't stopping by here to check on my latest strategic musings, trust me. However, I play lots of $10-$20-$30 tourneys, and the level of wretched DSP play at those levels is staggering. A recent example from an 18-player $15+1 Stars NLHE turbo is a great starting place for this tale....

We start with 1,500 chips in these things, and from the original 18 we were down to exactly nine, having just received the "Congratulations! You have reached the final table!" popup from Stars. What's to celebrate, really? Only four players cash in these things, so the banner may as well also include, "Five of the nine of you are spending lots of time for no payout, too!"

I was destined to be one of those, and it came about in part of because of an interesting DSP situation. I came to the final table with about 3,100 in chips, roughly in the middle of the pack and nowhere near safe in terms of cashing. You need to get to 6,000 or 7,000 before you can even think about letting a couple of the shorties bang heads; you've got to keep grabbing chips here when opportunities arise, particularly in the turbo format and at this stage, where the blinds move up and the antes kick in.

Along about the second hand of the final table, with blinds at 100/200 and just before the antes start, I find 9-9 in EP (UTG+2). I make a standard opening bet to 600, which I'm wont to do these days. (I've been experimenting with Chris Ferguson's concepts regarding pre-flop raises and have noticed, short-term, just a touch of improvement in my results.)

It's folded around to the small blind, who is one of the short stacks with 1,060 chips. He min-reraises me, to 1,000, leaving only 60 behind. And then, after a bit of a pause, the big blind smooth-calls the 1,000.

I am momentarily perplexed. What am I supposed to do here? I am so-o-o-o-o-o priced in for the call that that part of it is a given. The problem is, after that 400 I would have only another 2,000 or so myself, with me in line for the blinds as well. I could well be behind the small blind with my 9-9, but the pot odds are so good it doesn't matter.

Trying to figure out the big blind's range is another matter. He's the chip leader, with over 7,000 at the moment. He could be smoothing here with a monster, or he could be hoping to float a baby pair or a suited connector or something, which is likely how he built his stack in the first place.

I give it the usual three seconds of thought I spend on complex situations like these... and I jam for my remaining 2,100. The SB auto-calls and the BB takes as lengthy a pause as possible and finally folds. The system opens my 9-9 and the small blind turns out to have A-J, not even suited.

Good stuff for me. No further risk and 1,000 in dead chips in the pot. Unfortunately, an ace flops and the short stack triples through, at which point the big blind rips into me for not understanding dry side pot play. He had A-K or A-Q and folded it to my push.

Excuse me? It wasn't my play that was wrong, it was his. Not only did he put himself in a position to get pushed out of a pot (I strongly believe he should have jammed there instead, to put me to the test), he then accused me of not understanding the dry side pot concept.

T'anks, but no... and in fact another player at the table immediately (and unnecessarily) jumped to my defense. The dry side pot concept comes into play only very close to the bubble, and for the most part involves two or more large stacks voluntarily taking it easy on each other in hopes that one can catch and eliminate the shorty, thereby bursting the money or moving it to one or two spots. Here, however, we still had nine players in the game and weren't even close to the four money spots. Also, the big blind's smooth call represented one third of my stack. DSP situations require that each of the larger stacks involved achieves a relative EV gain by checking down the situation, due to the increased likelihood of cashing based on the possible single bustout. With a third of my stack already committed, I was not in a profitable DSP situation. The metagame EV gain I make by pushing in that spot, with so many players still in the hunt, is far greater than the gain I make by allowing the small chance (less than 50%, certainly), that we might go from nine players to eight at that moment.

Of course, you'll see it even more often the opposite way at these stakes, when some idiot with twenty times the chips of an already-committed short stack, and being two spots off the bubble in an event that pays 20 deep, makes a post-flop bet with K-5 sooted and no side pot whatsoever on an A-10-9 flop... just because he can. What a moran. In that case his potential gain is very small relative to the increased likelihood of tripling up a small stack unnecessarily and giving him life... and the chance to come back and do further damage to the bigger stacks at the table.

In this turbo tourney, by the way, I was then down to 2,100, and was soon out after losing a race for my remaining chips. So be it; I played the situation right and the cards didn't come.

The dry side pot concept is one of those things that is easy for grasping basics but is badly misunderstood by the majority of casual players. Think about it the next time you face such a situation, and always ask yourself this: What are you trying to accomplish with your bets?

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WSOP Final Table Delay - Good Idea or Bad?

Date: Fri, May 2, 2008 Internet

As USA Today reported, Harrahs has decided to delay the play of the final table for nearly 3 months. Here is how it is going to work at the 2008 WSOP.

Players will play like normal until they are down to the final 9 players. At that point, all nine players will receive 9th place money and the tournament will be paused, for nearly three and a half months...

During those three months, ESPN will be editing footage of the main event and hyping the final table. The idea is to create as much buzz for the final table as possible, similar to how other major sporting events have a break before their big game, such as the Superbowl getting 2 weeks break before playing in the big game.

I question though if this is more like playing three quarters of the superbowl and then putting the fourth quarter on hold for a few weeks?

Let's discuss the pro's and con's shall we?

The Pro's

• More buzz and excitement for the WSOP


• You won't know who wins beforehand (most likely)


• Resurgence of poker to it's glory years of 2 years back after Moneymaker won, assuming hype works as scheduled

The Con's

• It's takes a huge break in the middle of the tournament


• Completely changes the dynamic of the game


• Players can watch the WSOP footage on TV before they play the final table. I only imagine that they will be able to seehands that others played and which hole cards they had and plays they made.


• Hugely increases the possibility of collusion


• Hugely increases the possibility of outside influence

I'd like to hear more about what Harrahs has said about combating any form of collusion during this hiatus because I think this has a huge risk factor of tarnishing the game. The last thing anyone wants to come from this is another scandal where some of the players are working together in concert in some form or fashion, be it working off of some sort of non verbal cue or just playing to bust others but keep one another in as long as possible. Just a ton of collusion possibilities in my mind that could come up and when we are talking World Series of Poker Final Table money you have to know that it's a possibility to happen...

Now from a personal and business standpoint I like the move because I think it will indeed increase the exposure of poker and that means more traffic to the ole Kick Ass Poker Blog as well as sites across our network... plus it hopefully means more people getting excited about poker and starting to play the game because of all of the hype.

Now only if we can have a superstar or two in the final table instead of no personality Jerry Yang and the "hardly anyone liked me cause of the WSOP" Jamie Gold winners of past, plus if the amateurs can qualify online from an online poker room, like the Poker Stars Site then woo hoo we've hit the jackpot!

Can you imagine if the final table had Phil Hellmuth and Mike Matusow mixed in with a couple of hot poker chicks and some personable amateurs? That'd be a great scenario for poker and we can only hope.

What do you think, if you're at the final table of the WSOP this year are you going to enjoy the 117 day break before getting to play the final table? I'd love to get some feedback on this one.

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How many players will PokerStars send to the WSOP

Date: Fri, Apr 25, 2008 Internet

With the 2008 WSOP rounding the corner it is going to be interesting to see this year how many people that win a seat in one of the online poker sites actually play in the World Series of Poker.



Last year, things changed for the online poker rooms who were sending players to the WSOP and this was probably most felt by PokerStars, who has consistently qualified more players to the WSOP than any other online poker room. In 2004 and 2005 and I believe in 2006 the powers that be allowed poker rooms like poker stars to purchase the seats for their qualified players directly.

Today, this has changed.

The online poker rooms can not purchase the main event seat for players and provide them with a ticket. Today, online poker rooms have to provide the player the funds to purchase the seat and rely on the players to make the purchase themselves. And we all know that there is a big difference in getting a 'ticket' to the WSOP than getting the $10 grand in your hand and then turning that over for a seat in the main event...

This year, Poker Stars is sending over 1,000 players to the WSOP and other sites like FullTilt are already qualifying players and have been announcing a 150 seat WSOP main event guarantee, but while they might 'award' this many seats, how many will actually result in players playing in the event?

Last year we saw an overall fall off on the total size of the field due to the fact that so many players qualified online but chose to take the cold hard cash and not try and parlay it into winning the biggest poker tournament in the world.

What would you do? Lets say you win one of the Step Sit-N-Go's at PokerStars with an investment of around $7 or $8 bucks and turn that into a seat worth $10k plus $2k for travel and hotel? Would you take the cash and run, or would you take the shot and play in the biggest poker tournament in the world?

Personally, I might play in some of the smaller events. Maybe take the $$ and play in a few of the $1500-$2000 events but probably not the main event... maybe next year.

Here is the 2008 WSOP Schedule kicking off on May 29th with Live Action and Satellites!

*World Series of Poker and WSOP are trademarks of Harrah’s License Company, LLC (”Harrah’s”). Harrah’s does not sponsor or endorse, and is not associated or affiliated with this website or its products, services, promotions or tournaments.

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Is a Trojan Just a Marketing Ploy in Disguise?

Date: Tue, Mar 25, 2008 Internet

Welcome to a tale of a virus, but not necessarily the virus you might think. I've been aching to write about this one for a week or so, but frankly, I wanted to let it get the hell out of current Google search engine rankings for a bit.

A couple of weeks ago there was a story making the rounds of the poker news sites, or at least most of them, for at the one where I have some editorial say I made sure to give it a wide berth. It had to do with millions of dollars purportedly being stolen from online poker players who had had their computers unknowingly infected with a trojan (computer virus), which was then relaying their account information to some thief in distant lands. "Goodbye, online bankrolls," went the tale.

A lot of sites ran with their own versions of the story over the next two to three weeks. Some of them were good sites, some of them weren't. I'm not calling anyone out for biting on this one, by the way, because the poker-news world has been very spotty in recent weeks, with brief spurts of very busy activity mixed with days-long stretches where frankly, nothing much earth-shattering was going on. So, no naming of names, hokay?

But the story itself was bullshit. It didn't pass my personal smell test on first glance and every time I went back to check it for worthiness, it just didn't get any better. All the versions of the story that you see date back to a story that was first published on TechRadar.com, and is dutifully linked to and reprinted here. (This is a legit reprinting of the piece, by the way, because it is an examination of the veracity of the piece itself.) Here goes:

Millions stolen from online poker players
Criminals use Trojans to steal money from web users

March 10th

Mikko Hyppönen is the chief research officer at security software company, F-Secure. He also consults with European security agencies about the threats posed by cyber-criminals. Through his job, he hears many frightening stories of how people have been robbed blind without even realising it.

He said that hackers are robbing millions from innocent web users. He told of how your mobile phone could be spying on you. And he described how online banking might not be as safe as you'd hoped.

Online poker players, he says, are some of the ripest targets. And Hyppönen said he fears that most online poker players have absolutely no idea how much danger they’re in. He also revealed a link between money stolen through cyber-crime, and terrorism in Iraq.

Real money

“Online poker players are a massive target for hackers. People play it with real money obviously, so they’re a big target. We were just investigating a case where a professional online poker player was attacked by someone he would play against regularly online. And we’re talking about professional players, and big money. Hundreds of thousands of euros on the table at a time,” he said.

“All of a sudden he started losing. He would regularly lose even when he had a great hand – pocket aces for example. If he had an unbeatable hand, the other players would simply fold. And when he tried to bluff, he would lose. He lost a lot of money this way, we’re talking hundreds of thousands of euros.

“This went on for weeks. And when we looked into it we realised that one of the other players at the table had sent him a tool. A calculater to help optimise the poker playing or whatever. And we found that the application included a Trojan.

“Which means that when he was playing online poker against these people who were in another country, the guy could press a button and he would receive a screenshot of the target’s screen. So he sees the hold cards. If you’re playing poker and the other players know your cards, it’s pretty hard to win.

“It’s a clever attack because the hacker could have just stolen the account and moved the money away. But he would have been caught. But this way the target was losing his money to someone else and he didn’t realise it was a con. I don’t think many online poker players realise that those kind of attacks are being done.”

Iraq insurgents funded

Hyppönen highlighted the case of Tariq Al-Daour who was sent to prison after he used online poker sites to launder millions of pounds to fund the insurgents fighting allied forces in Iraq.

“Tariq Al-Daour was sentenced last summer in London with two of his friends, for using Windows Trojans. They were using keyloggers which save everything you type on the keyboard. And they waited until you did online shopping so they could get your name, address, credit card number etc, and this way they managed to get 36,000 cards. American Express, Visa, Mastercard - the lot. And what they did is they took those cards to online poker sites.

“They set up new accounts with the stolen cards and of course they played against themselves, losing on purpose. This way they were able to launder the money. Again it’s pretty clever because if someone comes asking about all their money, they can prove they won it at poker.

“They laundered close to about two million euros. And the really weird part is what they did with the money. They took the money back to online shops and bought really weird stuff like hiking boots, tents, knives, GPS devices, radios...

“And then they would use couriers to ship those goods to Iraq, to help the insurgents there fight against British and American troops. So what we have here is a link between online crime, Windows Trojans etc, and the funding of insurgents in Iraq. It’s quite an unusual case.”

. . .

And quite an unusual story, cobbled together from semi-related news pieces for the purposes of the agenda of, TechRadar, I guess. The story itself, however, is suspicious from the outset.

It wasn't the first time I'd encountered either "Mikko Hyppönen, [] the chief research officer at security software company F-Secure," or TechRadar itself, in a computer piece peripherally connected to the online game. In fact, ol' Mikko seems to be one of the talking mouths that the TechRadar writers use whenever they want to write a scare piece talking about computer viruses and online gaming. That's not to say, however, that Mikko and F-Secure don't have some legitimate history connected to online poker.

If you were to click on this link, you'd swim way back in time to the KickAssPoker Blog archives for May of 2006, and you'd find not one, but two stories related to a software trojan and online poker. Back then, the site Checkraised.com, one of many sites trying to elbow its way forward among new, fledging online poker communities, gave to its members a free poker calculator called RBCalc. Checkraised.com had the software developed for it by a contract programmer, one who reportedly worked previously in the IT department of a large, India-based software shop concerned with developing software for a major online poker site. It might have been Party; it might have been another room. I really don't know that part, and it's irrelevant.

But the checkraised.com folks did something a bit naive, in terms of understanding software security. Their way of checking to see if the software was "clean" was to install it on one of their computers and then see if McAfee or Norton or whatever they were running picked up a virus within. However, since this was a new variant of an existing software virus, part of a subset of viruses (or virii) called rootkit trojans, it wouldn't have been listed in the working libraries of any of those software companies. Checkraised.com went on and gave the software away, which infected dozens or maybe hundreds of people who downloaded and installed the RBCalc poker add-on on their machines.

The virus was discovered rather quickly, and it was discovered by F-Secure, a large Finnish firm that's like a smaller Euro version of McAfee or Norton. But it's unlikely that millions were stolen from the handful of Checkraised.com users who installed the thing, and remember, this was nearly two years ago.

Now, back to the TechRadar story. Do you notice how the piece is really two half-stories, rather than one coherent piece? Following the scare tactics of the lead, the story then talks about this unnamed poker player whose hole cards were being transmitted to another player, and supposedly, hundreds of thousands of dollars were involved. Does this sound like any recent scandals at major online rooms? Does the mention of Absolute Poker or Ultimate Bet, connected companies who have both had recent scandals with insider cheating and access to players' hole cards, ring any bells?

Well, duh. What you need to realize, though, is that through the entire first section of that TechRadar story, it is specific-free. The player wasn't named, nor the site, nor specific amounts, nor dates, nor much of anything else. It's an apocryphal tale. It might not even be be blind-referencing the AP or UB situations, though that's the obvious choice. It could also be a tale of someone who installed one of those idiotic "PokerBot" programs, all of which are complete scams and many of which might do something similar: capture screen grabs of some sucker's monitor and transmit the hole-card information to whoever it was that sold the sucker the software.

It was probably a play on AP or UB, however, and it was interspersed with previous details of something the F-Secure did have something to do with, that being the RBCalc trojan unmasking nearly two years back. But this tale as told sounds a lot like Hillary dodging bullets on the tarmac at Kosovo; it's believable as long as no one looks too closely.

Let's move on to the second part of the TechRadar piece. That's where the story gets all specific, when the F-Secure dude trots out the tale of al-Qaida terrorist Tariq al-Daour. Despite al-Daour's Arab heritage, he has been more closely linked to the Sri Lankan terrorist group the Tamil Tigers. Still, the facts related in the piece are more or less correct. al_Daour was sentenced last year for the theft of roughly 36,000 credit card numbers -- specifically UK credit-card numbers, though that's never mentioned anywhere -- which he then used to illicit create and launder online money.

There has been, to the best of my knowledge, exactly one documented case of online poker and other forms of online gambling connected to terrorist money laundering in any sort of large-scale organized fashion. This is the case. al-Daour loaded accounts with bogus credit-card charges on both poker and other types of online gambling sites, and bet freely with other accounts, attempting to launder the money. The nature of his method meant that he flat-out lost a lot of the money, one could suppose, though specifics are hard to find.

In an irony of ironies, the online poker site where al-Daour did more of his "laundering" than any other was... Absolute Poker. Noble Poker and Paradise Poker were also named as sites where al-Daour operated, but he also attempted to move money through sites such as Canbet and Betfair. But the scare tactics used in the piece hugely overstate the impact (and the amount) that al-Daour and his two terrorist compatriots were able to launder.

Here's a more specific passage on the case from a 207 Washington Post piece:

"All told, al-Daour and other members of the group conducted 350 transactions at 43 different online wagering sites, using more than 130 compromised credit card accounts. It didn't matter if they lost money on their wagering. Winnings were withdrawn and transferred to online bank accounts the men controlled."

Betfair, one of the companies named by the Post, has strenuously denied that the men laundered any money through it, saying "they were unsuccessful: they were identified; accounts were closed; and all relevant information was shared with the police."

As duly noted, al-Daour and the others used keyloggers to capture the illicit UK credit-card numbers. However, note that the keyloggers referenced by F-Secure mouthpiece Hyppönen have absolutely nothing to do with the rest of the tale he's spinning. Al-Daour and his keyloggers have nothing to do with Checkraised.com and RBCalc, nor the unnamed poker pro who reportedly lost hundreds of thousands. It's a smokescreen. Notice, too, how Hyppönen offered that 36,000 numbers were stolen, even though only 130 (which is under 0.4% of the larger number) suffered fraudulent credit-card hits. Chances are good that the vast majority of those 130 got their money back, too.

So what, then, is the purpose of the piece? It's really part of the new age of information. It's not quite advertorial, but more along the lines of agenda-driven news content. TechRadar gets to pump itself as providing cutting-edge stories of Internet-based crime and punishment, and gets to use the scare-tactic words of "terrorism" and such to really try to grab some cheap headlines and links. And F-Secure gets the free publicity, and hopefully lots more hits to and downloads from its anti-virus site.

But you know what? It's all bullshit.

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Is a Trojan Just a Marketing Ploy in Disguise?

Date: Tue, Mar 25, 2008 Internet

Welcome to a tale of a virus, but not necessarily the virus you might think. I've been aching to write about this one for a week or so, but frankly, I wanted to let it get the hell out of current Google search engine rankings for a bit.

A couple of weeks ago there was a story making the rounds of the poker news sites, or at least most of them, for at the one where I have some editorial say I made sure to give it a wide berth. It had to do with millions of dollars purportedly being stolen from online poker players who had had their computers unknowingly infected with a trojan (computer virus), which was then relaying their account information to some thief in distant lands. "Goodbye, online bankrolls," went the tale.

A lot of sites ran with their own versions of the story over the next two to three weeks. Some of them were good sites, some of them weren't. I'm not calling anyone out for biting on this one, by the way, because the poker-news world has been very spotty in recent weeks, with brief spurts of very busy activity mixed with days-long stretches where frankly, nothing much earth-shattering was going on. So, no naming of names, hokay?

But the story itself was bullshit. It didn't pass my personal smell test on first glance and every time I went back to check it for worthiness, it just didn't get any better. All the versions of the story that you see date back to a story that was first published on TechRadar.com, and is dutifully linked to and reprinted here. (This is a legit reprinting of the piece, by the way, because it is an examination of the veracity of the piece itself.) Here goes:

Millions stolen from online poker players
Criminals use Trojans to steal money from web users

March 10th

Mikko Hyppönen is the chief research officer at security software company, F-Secure. He also consults with European security agencies about the threats posed by cyber-criminals. Through his job, he hears many frightening stories of how people have been robbed blind without even realising it.

He said that hackers are robbing millions from innocent web users. He told of how your mobile phone could be spying on you. And he described how online banking might not be as safe as you'd hoped.

Online poker players, he says, are some of the ripest targets. And Hyppönen said he fears that most online poker players have absolutely no idea how much danger they’re in. He also revealed a link between money stolen through cyber-crime, and terrorism in Iraq.

Real money

“Online poker players are a massive target for hackers. People play it with real money obviously, so they’re a big target. We were just investigating a case where a professional online poker player was attacked by someone he would play against regularly online. And we’re talking about professional players, and big money. Hundreds of thousands of euros on the table at a time,” he said.

“All of a sudden he started losing. He would regularly lose even when he had a great hand – pocket aces for example. If he had an unbeatable hand, the other players would simply fold. And when he tried to bluff, he would lose. He lost a lot of money this way, we’re talking hundreds of thousands of euros.

“This went on for weeks. And when we looked into it we realised that one of the other players at the table had sent him a tool. A calculater to help optimise the poker playing or whatever. And we found that the application included a Trojan.

“Which means that when he was playing online poker against these people who were in another country, the guy could press a button and he would receive a screenshot of the target’s screen. So he sees the hold cards. If you’re playing poker and the other players know your cards, it’s pretty hard to win.

“It’s a clever attack because the hacker could have just stolen the account and moved the money away. But he would have been caught. But this way the target was losing his money to someone else and he didn’t realise it was a con. I don’t think many online poker players realise that those kind of attacks are being done.”

Iraq insurgents funded

Hyppönen highlighted the case of Tariq Al-Daour who was sent to prison after he used online poker sites to launder millions of pounds to fund the insurgents fighting allied forces in Iraq.

“Tariq Al-Daour was sentenced last summer in London with two of his friends, for using Windows Trojans. They were using keyloggers which save everything you type on the keyboard. And they waited until you did online shopping so they could get your name, address, credit card number etc, and this way they managed to get 36,000 cards. American Express, Visa, Mastercard - the lot. And what they did is they took those cards to online poker sites.

“They set up new accounts with the stolen cards and of course they played against themselves, losing on purpose. This way they were able to launder the money. Again it’s pretty clever because if someone comes asking about all their money, they can prove they won it at poker.

“They laundered close to about two million euros. And the really weird part is what they did with the money. They took the money back to online shops and bought really weird stuff like hiking boots, tents, knives, GPS devices, radios...

“And then they would use couriers to ship those goods to Iraq, to help the insurgents there fight against British and American troops. So what we have here is a link between online crime, Windows Trojans etc, and the funding of insurgents in Iraq. It’s quite an unusual case.”

. . .

And quite an unusual story, cobbled together from semi-related news pieces for the purposes of the agenda of, TechRadar, I guess. The story itself, however, is suspicious from the outset.

It wasn't the first time I'd encountered either "Mikko Hyppönen, [] the chief research officer at security software company F-Secure," or TechRadar itself, in a computer piece peripherally connected to the online game. In fact, ol' Mikko seems to be one of the talking mouths that the TechRadar writers use whenever they want to write a scare piece talking about computer viruses and online gaming. That's not to say, however, that Mikko and F-Secure don't have some legitimate history connected to online poker.

If you were to click on this link, you'd swim way back in time to the KickAssPoker Blog archives for May of 2006, and you'd find not one, but two stories related to a software trojan and online poker. Back then, the site Checkraised.com, one of many sites trying to elbow its way forward among new, fledging online poker communities, gave to its members a free poker calculator called RBCalc. Checkraised.com had the software developed for it by a contract programmer, one who reportedly worked previously in the IT department of a large, India-based software shop concerned with developing software for a major online poker site. It might have been Party; it might have been another room. I really don't know that part, and it's irrelevant.

But the checkraised.com folks did something a bit naive, in terms of understanding software security. Their way of checking to see if the software was "clean" was to install it on one of their computers and then see if McAfee or Norton or whatever they were running picked up a virus within. However, since this was a new variant of an existing software virus, part of a subset of viruses (or virii) called rootkit trojans, it wouldn't have been listed in the working libraries of any of those software companies. Checkraised.com went on and gave the software away, which infected dozens or maybe hundreds of people who downloaded and installed the RBCalc poker add-on on their machines.

The virus was discovered rather quickly, and it was discovered by F-Secure, a large Finnish firm that's like a smaller Euro version of McAfee or Norton. But it's unlikely that millions were stolen from the handful of Checkraised.com users who installed the thing, and remember, this was nearly two years ago.

Now, back to the TechRadar story. Do you notice how the piece is really two half-stories, rather than one coherent piece? Following the scare tactics of the lead, the story then talks about this unnamed poker player whose hole cards were being transmitted to another player, and supposedly, hundreds of thousands of dollars were involved. Does this sound like any recent scandals at major online rooms? Does the mention of Absolute Poker or Ultimate Bet, connected companies who have both had recent scandals with insider cheating and access to players' hole cards, ring any bells?

Well, duh. What you need to realize, though, is that through the entire first section of that TechRadar story, it is specific-free. The player wasn't named, nor the site, nor specific amounts, nor dates, nor much of anything else. It's an apocryphal tale. It might not even be be blind-referencing the AP or UB situations, though that's the obvious choice. It could also be a tale of someone who installed one of those idiotic "PokerBot" programs, all of which are complete scams and many of which might do something similar: capture screen grabs of some sucker's monitor and transmit the hole-card information to whoever it was that sold the sucker the software.

It was probably a play on AP or UB, however, and it was interspersed with previous details of something the F-Secure did have something to do with, that being the RBCalc trojan unmasking nearly two years back. But this tale as told sounds a lot like Hillary dodging bullets on the tarmac at Kosovo; it's believable as long as no one looks too closely.

Let's move on to the second part of the TechRadar piece. That's where the story gets all specific, when the F-Secure dude trots out the tale of al-Qaida terrorist Tariq al-Daour. Despite al-Daour's Arab heritage, he has been more closely linked to the Sri Lankan terrorist group the Tamil Tigers. Still, the facts related in the piece are more or less correct. al_Daour was sentenced last year for the theft of roughly 36,000 credit card numbers -- specifically UK credit-card numbers, though that's never mentioned anywhere -- which he then used to illicit create and launder online money.

There has been, to the best of my knowledge, exactly one documented case of online poker and other forms of online gambling connected to terrorist money laundering in any sort of large-scale organized fashion. This is the case. al-Daour loaded accounts with bogus credit-card charges on both poker and other types of online gambling sites, and bet freely with other accounts, attempting to launder the money. The nature of his method meant that he flat-out lost a lot of the money, one could suppose, though specifics are hard to find.

In an irony of ironies, the online poker site where al-Daour did more of his "laundering" than any other was... Absolute Poker. Noble Poker and Paradise Poker were also named as sites where al-Daour operated, but he also attempted to move money through sites such as Canbet and Betfair. But the scare tactics used in the piece hugely overstate the impact (and the amount) that al-Daour and his two terrorist compatriots were able to launder.

Here's a more specific passage on the case from a 207 Washington Post piece:

"All told, al-Daour and other members of the group conducted 350 transactions at 43 different online wagering sites, using more than 130 compromised credit card accounts. It didn't matter if they lost money on their wagering. Winnings were withdrawn and transferred to online bank accounts the men controlled."

Betfair, one of the companies named by the Post, has strenuously denied that the men laundered any money through it, saying "they were unsuccessful: they were identified; accounts were closed; and all relevant information was shared with the police."

As duly noted, al-Daour and the others used keyloggers to capture the illicit UK credit-card numbers. However, note that the keyloggers referenced by F-Secure mouthpiece Hyppönen have absolutely nothing to do with the rest of the tale he's spinning. Al-Daour and his keyloggers have nothing to do with Checkraised.com and RBCalc, nor the unnamed poker pro who reportedly lost hundreds of thousands. It's a smokescreen. Notice, too, how Hyppönen offered that 36,000 numbers were stolen, even though only 130 (which is under 0.4% of the larger number) suffered fraudulent credit-card hits. Chances are good that the vast majority of those 130 got their money back, too.

So what, then, is the purpose of the piece? It's really part of the new age of information. It's not quite advertorial, but more along the lines of agenda-driven news content. TechRadar gets to pump itself as providing cutting-edge stories of Internet-based crime and punishment, and gets to use the scare-tactic words of "terrorism" and such to really try to grab some cheap headlines and links. And F-Secure gets the free publicity, and hopefully lots more hits to and downloads from its anti-virus site.

But you know what? It's all bullshit.

Read Full Poker Blog Post

ABA Comments on UIGEA Regulations: The Complete Text

Date: Mon, Mar 10, 2008 Internet

Hi, all,

Haley here, with some real content. In the last day or so I put up a major piece at PokerNews highlighting the sharply worded, negative reaction to the proposed UIGEA regulations that was sent in by the American Banking Association as part of the public call for comments on the proposed rules. I excerpted many of the best and most important quotes for the PN piece. Even though the ABA comments were submitted in December, they hadn't been widely picked up and they did seem to be newsworthy, because they are stridently more negative than what the largely neutral stance originally believed to be held by the ABA would lead most observers to believe.

Because so much of my PN story was in fact a reprinting of text from the ABA comments, I wanted to make the entire 11-page document publicly available, and that simply wouldn't work in the context of a PN story. Note that there is no business agreement whatsoever between PN and Kick Ass Poker; the complete comments text appears here only for veracity, so that the poker world has a source to examine the complete text as written by the ABA and excerpt from it or pass judgment upon it itself.

So, the ABA's comments:

By electronic delivery

December 12, 2007

Jennifer J. Johnson
Secretary
Board of Governors of the Federal Reserve System
20th St. & Constitution Avenue, NW
Washington, DC 20551
regs.comments@federalreserve.gov

Department of the Treasury
Office of Critical Infrastructure Protection and Compliance Policy
Room 1327
Main Treasury Building
1500 Pennsylvania Ave., NW.
Washington, DC 20220

Re: FRB Docket No. R-1298; Treasury Docket No. DO-2007-0015; Prohibition on Funding of Unlawful Internet Gambling; 72 Federal Register 56680; October 4, 2007

Ladies and Gentlemen:

The American Bankers Association (ABA)(1) appreciates the opportunity to comment on the Prohibition on Funding of Unlawful Internet Gambling (Prohibition) issued by the Federal Reserve Board and the Department of Treasury (Agencies). As discussed in more detail below, ABA recognizes and appreciates the efforts of the Agencies to implement the Unlawful Internet Gambling Enforcement Act of 2006 (the Act or UIGEA) in a workable manner that limits the regulatory burdens associated with pursuing the statutory mandate. However, ABA believes that the proposal, in large part due to the nature of the statute itself, will fail to create a practical process for intercepting prohibited conduct that maintains an efficiently functioning payments system. ABA urges several changes or clarifications to the proposal to enable banks to execute some form of feasible program. Nevertheless, we believe that UIGEA will in the end catch more banks in a compliance trap and do greater damage to the competitiveness of the American payments system, than it will stop gambling enterprises from profiting on illegal wagering.

Summary of Comments

ABA applauds the Agencies for establishing two fundamental limits in implementing UIGEA: first, “proposing to exempt all participants in the ACH, check collection and wire transfer systems, except for the participant that possesses the customer relationships with the Internet gambling business,” and second, considering as sufficient compliance the establishment of reasonable procedures and policies restricted to commercial customers of any non-exempt participants in any designated payment system. Furthermore, ABA considers the “over-blocking” safe harbor to provide essential operating latitude for all payments system participants.

Unfortunately, these promising elements are ultimately compromised by the following issues: (1) the definition of unlawful Internet gambling in the Prohibition leaves the vague definition of the Act uncured and therefore renders compliance virtually impossible; (2) the intractable problem of identifying or intercepting cross-border gambling activities and tainted correspondent relationships has not been adequately solved by the proposal; and (3) the uncertain standard for knowledge that triggers blocking is too indefinite to be practically operative. We provide suggestions on how to address each of these issues, at least to some degree, and offer several additional comments to improve the prospects for effective implementation.

Background

ABA members are well aware that with the promise of web-based commerce come new complexities and vulnerabilities. Not surprisingly, prosecuting unlawful Internet gambling poses numerous law enforcement challenges. However, we maintain that the UIGEA is a fundamentally flawed response to those challenges.

ABA members have invested enormous resources in fulfilling their general obligation to report criminal or otherwise suspicious activity under the Bank Secrecy Act and anti-money laundering laws. These efforts to maintain the integrity of the financial system demonstrate that banks are dedicated partners in combating all forms of financial crime. But the UIGEA takes banks beyond the role of reporting potentially or allegedly illegitimate financial activity, and makes banks and other financial institutions, police, prosecutors, judges, and executing marshals in place of real law enforcement officers when it comes to one of the most elusive of modern crimes, namely, unlawful Internet gambling.

We are saddled with this exceptional burden as the Act says “because traditional law enforcement mechanisms are often inadequate for enforcing gambling prohibitions or regulations on the Internet, especially where such gambling crosses State or national borders.” In other words, in the view of the drafters of the legislation, all the sophistication of the FBI, Secret Service, and other police computerized detection systems and investigative expertise devoted to fighting terrorism and financial crime are inadequate to the task of apprehending the unlawful gambling business or confiscating its revenues. ABA believes that punting this obligation to the participants in the U.S. payment system is an unprecedented delegation of governmental responsibility with no prospect of practical success in exchange for all the burden it imposes.

While the Agencies have succeeded in addressing some of the shortcomings of the UIGEA, we believe that further changes to the proposal are warranted to make any future regulation somewhat more workable and less burdensome.

Discussion

As a general proposition, ABA supports the Agencies in their efforts to implement the Act(2) while limiting the burden placed on the payments systems and their participants. Our first three points seek to strengthen beneficial aspects of the Prohibition. The remaining points address deficiencies that persist in the proposal that preclude effective implementation of the Act.

1. The exemption language in the proposed rule should be reinforced to underscore that all participants in the specified payment systems except those with a customer relationship with the Internet gambling business are exempt.

The Agencies have taken great care in responsibly exercising the Act’s exemption authority by recognizing the limit of payments system participants to intercede in gambling transactions on a gambler-by-gambler basis. Instead, the focus of the proposal is placed on identifying the unlawful Internet gambling business. Although this is no small task in itself, it is far superior to the alternative of identifying and monitoring individual gambler activity. Consequently, the explanatory language of the Prohibition states that “[t]he Agencies are proposing to exempt all participants in the ACH, check collection, and wire transfer systems, except for the participant that possesses the customer relationship with the Internet gambling business.”(3) This statement meshes with one of the stated intents of the Act, which is to “exempt certain restricted transactions or designated payment systems from any requirement imposed under such regulations, if the Secretary and the Board jointly find that it is not reasonably practical to identify and block, or otherwise prevent or prohibit the acceptance of, such transactions.”(4)

Upon closer inspection, however, the text of the proposed rule does not exactly match up with the Supplementary Information to the Prohibition. For instance, §___.4 of the proposed rule states that the “participants providing the following functions of a [ACH, check, or wire transfer payments system] are exempt from this regulation’s requirements for establishing written policies and procedures . . . .”(5) While functionally this may be the equivalent of “exempt[ing] all participants . . . except the participant that possesses the customer relationship with the Internet gambling business” as outlined in the Supplementary Information, it has the effect of unnecessarily narrowly defining those participants which will be exempt.

Additionally, as the payments system evolves and further iterations are developed, this language could potentially pose problems for these new participants, even though the intent to include them as non-exempt institutions may be lacking. ABA therefore recommends that the Agencies rework the text of the proposed rule in §___.4 to make clear that all participants in the ACH, check collection and wire transfer systems are exempt, except for the institution which possesses the customer relationship with the Internet gambling business.

As a further illustration of this drafting problem, the Prohibition narrows the general customer relationship exemption for ACH, check and wire transfers in cases involving cross-border transactions. Although the only bank with a customer relationship with the Internet gambling business is a foreign bank, the domestic payment system participant acting as an extension of the gambler’s bank suddenly becomes a non-exempt participant when directly engaging with a foreign correspondent bank in a restricted transaction. For all the reasons this is not feasible in a domestic banking transaction, such an arrangement is not feasible cross-border. Only the bank with the customer relationship with the Internet gambling business can practically access sufficient information to identify the circumstances giving rise to a judgment about a restricted transaction.

The fact that U.S. authority does not reach such foreign banks does not alter the practical position in which U.S. banks find themselves for purposes of qualifying for the exemption. At the end of the analysis, the statutory standard for applying an exemption is whether the Agencies find that it is not reasonably practical for a participant to identify and block restricted transactions. For the reasons recited in the proposal with respect to the limits of ACH, check collection and wire transfers, participants without the direct customer relationship with the Internet gambling business at home or abroad must be exempt from requirements for establishing policies and procedures to identify and block restricted transactions.

2. ABA urges the Agencies to clarify the Prohibition to confirm that compliance by all non-exempt participants in any designated systems can always be satisfied through procedures limited to commercial customers or merchants acting in the capacity of Internet gambling businesses.

The Supplementary Information to the Prohibition states that the responsibility for adopting policies and procedures reasonably designed to prevent or prohibit restricted transactions for non-exempt participants in the system should “address methods for conducting due diligence in establishing and maintaining a commercial customer relationship designed to ensure that the commercial customer does not originate or receive restricted transactions through the customer relationship.”(6) This language in the Supplementary Information is paralleled in the recitation of reasonable policiesproposed section ___.6 for each of the designated payment systems. While ABA is confident that the Agencies have intended that procedures need not monitor non-commercial consumers (e.g., the gambler), we urge that the final Prohibition make crystal clear that compliance can be fully demonstrated based on procedures limited to commercial customers complicit in the restricted transactions as an unlawful Internet gambling business.

3. Preservation of the “over-blocking” provisions of the Prohibition is essential to workability for financial institutions.

While the Prohibition only requires policies and procedures to identify and block transactions related to unlawful Internet gambling, § ___.5 of the Prohibition contains a “safe harbor” provision for financial institutions that block a transaction that is: (1) a restricted transaction; (2) reasonably believed to be a restricted transaction; or (3) blocked out of reliance on the policies and procedures of a designated payment system.(7) More importantly though, the Prohibition allows for financial institutions to refuse to process any gambling transactions, “including those transactions excluded from the Act’s definition of unlawful Internet gambling, if a system or participant decides for business reasons not to process such transactions.”(8) This allowance combined with the so-called “over-blocking” provision serves an important purpose in granting financial institutions the ability effectively to tailor their policies and procedures to fit their unique risk management profiles and there own business strategies. The freedom banks have today to refuse to process gambling transactions was not intended to be impaired by the Act—and the Agencies rightly conclude that the Act affords them no authority to compel the processing of lawful gambling transactions.(9)

ABA believes that allowing financial institutions the flexibility to determine for themselves whether to refuse to process any gambling transactions, or to block only those that are deemed to involve “unlawful Internet gambling,” is essential to providing a workable rule. ABA concurs with the Agencies’ statement that they may not compel financial institutions to process gambling transactions and believes that any final rule should make this point clear. However, ABA is concerned that the “safe harbor” provisions contained in § ___.5 of the Prohibition may not adequately communicate that elective refusal to process is permissible. ABA requests that the text of the “safe harbor” provision contained in § ___.5 be amended to include an explicit statement affirming the ability of payments systems and their participants to refuse to process any gambling transactions for their own business reasons or discretion.

Even if the steps recommended above are adopted, the regime proposed remains unworkable for the following reasons.

4. The definition of what constitutes “unlawful Internet gambling” is inadequate. It must be rectified.

The Agencies need to cure the impossibly vague scope of what is meant by “unlawful Internet gambling.” As drafted, § ___ 2(t) of the Prohibition perpetuates the uncertain breadth of the Act. All of the complicating cross-jurisdictional problems in specifying what is unlawful versus what is lawful Internet gambling persist. All the basic proof problems that have plagued law enforcement prosecution have been automatically imposed by the Act, and now the Prohibition, upon the participants in the payments system. All of the hurdles that the Agencies have identified in connection with a government obligation to create a list of unlawful Internet gambling businesses are left to each and every U.S. bank individually to clear, including “ensur[ing] that the particular business was, in fact, engaged in activities deemed to be unlawful Internet gambling…requir[ing] significant investigation and legal analysis … complicated by the fact that the legality of a particular Internet gambling transaction might change depending on the location of the gambler at the time the transaction was initiated, and the location where the bet or wager was received.”(10)

The Prohibition does not specify which transactions qualify as “unlawful Internet gambling.” Instead, the Prohibition looks to “underlying substantive State and Federal gambling laws and not . . . a general regulatory definition” to determine the scope of what unlawful Internet gambling comprises.(11) ABA believes that requiring banks to be arbiters of gambling laws for all states, as well as federal gambling laws, is infeasible and would place a crippling processing burden and unbounded litigation risk on the nation’s payments system participants.

Furthermore, the conflict between the Department of Justice and the Agencies on the scope of “unlawful Internet gambling” sows added confusion over what transactions are indeed subject to the Prohibition.(12) By its terms, the Prohibition “exempts three categories of transactions” from what “unlawful Internet gambling” appears to be: (1) intrastate transactions; (2) intra-tribal transactions; and (3) interstate horseracing transactions.(13) Additionally, according to the Department of the Treasury, “[s]ince the proposed rule only covers “unlawful internet gambling,” it in no way requires participants to prevent or prohibit transactions that are lawful under the Interstate Horseracing Act and all other applicable federal statutes.”(14)

However, the Department of Justice “interprets existing federal statutes . . . as pertaining to and prohibiting Internet gambling. These statutes pertain to more than simply sports wagering.”(15) Since the Department of Justice “has consistently taken the position that the interstate transmission of bets and wagers, including bets and wagers on horse races, violates Federal law . . . . ,”(16) no clear authority exists as to which interpretation banks should follow when implementing the Prohibition. If the federal agencies themselves cannot agree on the law, what hope is there that banks can resolve these confounding legal issues?

It is one thing for banks to report suspicious activity based on legal uncertainty about the criminality of the conduct; it is quite another to require a bank to act on its own judgment about legality and to impose sanctions for such ex parte determinations. Given the different entities encompassed by the proposal as participants in the payments system who are deputized with this authority, the Prohibition seems effectively to require vigilante justice empowered by a vague and overbroad delegation of the government’s police powers. While ABA believes banks and other payments system participants must retain the operational flexibility to refuse any gambling or otherwise uncertain transactions for compliance or business reasons should they so desire, and without legal liability for doing so, such business judgment latitude does not eliminate the fundamental flaw of the Prohibition in establishing a law enforcement regime predicated on a private sector decree.

Moreover, the definition of “unlawful Internet gambling” is pivotal to the operation of the Prohibition in another way. Without an adequate definition of “unlawful Internet gambling,” it is impossible to determine what constitutes an “unlawful Internet gambling business” for purposes of determining the customer relationship. This deficiency goes to the heart of the compliance process; if it is impossible to determine what an “unlawful Internet gambling business” is, it is impossible to determine what participant possesses the customer relationship with such business, and thus it is impossible to implement the terms of the Prohibition.

ABA believes that the flaws in the definition of “unlawful Internet gambling” are fatal to this proposal as a legal, policy and practical matter. A unified, practically workable definition of “unlawful Internet gambling” must be included in the Prohibition. This is such a keystone element of the Prohibition and is currently so thoroughly flawed that a workable rule cannot possibly be issued in final form without re-proposal.

5. The Prohibition’s handling of cross-border relationships presents substantial problems for financial institutions and should be revised.

ABA believes that while well-intentioned, the Agencies’ efforts at cross-border implementation by requiring U.S. participants to engage foreign correspondent banks in identifying and blocking unlawful Internet gambling-related transactions raises more problems than it solves. First, for the reasons recited earlier U.S. participants have none of the system capabilities that enable them to identify and block restricted transactions conducted vis-à-vis ACH, checks, or wire transfers when they are not the bank with the customer relationship with the Internet gambling business.

Second, the implicit assumption that the correspondent relationship among banks conducting restricted transactions parallels that among banks engaged in transactions that have attributes for money laundering is not warranted. International standards for anti-money laundering and counter terrorism financing controls have been adopted in nearly all international jurisdictions; whereas, there are no similar international control standards for Internet gambling; indeed there is broad international disagreement about the desirability of such controls. Consequently, there is no generally accepted standard upon which a U.S. and a foreign correspondent can practically agree that will provide assurance that they are implementing reasonable controls to block unlawful cross-border gambling transactions.

Third, the levels of corresponding relationships between the foreign correspondent (that has direct dealings with a U.S. participant) and the ultimate foreign bank that has the gambling business customer relationship may have several intermediate levels. This nesting defies any realistic expectation that a contractual agreement between the U.S. bank and their immediate foreign counterparty will effectively screen out “unlawful Internet gambling” transactions initiated by U.S. gamblers with commercial customers of foreign banks in off-shore jurisdictions.

Fourth, the cross-border system proposed is dependent on the unlikely expertise that a foreign bank will be able to distinguish what is or is not “unlawful” Internet gambling in any of the 50 United States and therefore be in a position to comply with any contractual undertakings with U.S. payment system participants.

Fifth, the proposal fails to consider the issue of when a foreign correspondent’s home country expressly prohibits them from having policies and procedures required by the Prohibition. For instance, if a British bank has policies and procedures to identify and block transactions which qualify as “unlawful Internet gambling” in the U.S., but these same transactions are legal in the U.K., the bank could be subject to litigation or enforcement actions in their own country. Some foreign correspondent banks may be prohibited by their home country laws from adopting policies and procedures to identify such transactions. Likewise, if a foreign correspondent bank fails to comply with the Prohibition, the remedial action of blocking their access to the U.S. payments systems, as provided in § ___.6, seems to be a rather harsh penalty with little likely offsetting benefit. Exposing foreign correspondent banks to such risks seems an unacceptable byproduct of the Prohibition, especially since the institutions likely to be affected are not located in the United States.

The cross-border implementation problems are exacerbated by the fact that unlawful Internet gambling may be legal in a correspondent bank’s jurisdiction, and, as pointed out above, the Prohibition does not adequately define what constitutes unlawful Internet gambling. Thus, even if the foreign correspondent bank is willing and able to implement parts of the Prohibition, a U.S. bank may be unable to provide them with clear directions so that unlawful Internet gambling-related transactions are not inadvertently sent to the U.S. payments systems.

ABA urges the Agencies to exercise their exemption authority to exclude from the scope of the Prohibition international transactions conducted through correspondent relationships.

6. The Prohibition should clarify what exactly the standard is for when a bank “becomes aware” that a commercial customer has received an unlawful Internet gambling-related transaction.

The Prohibition’s § ___.6 contains language indicating that non-exempt institutions must have procedures “if the [institution] becomes aware that the customer has [engaged in] a restricted transaction.”(17) However, nowhere in the Prohibition or the explanatory language is it made clear what level of knowledge triggers the condition when a financial institution will be found to “become aware” of a restricted transaction. A clear definition of when a bank will “become aware” of a restricted transaction is crucial to enabling banks to comply with the Prohibition.

ABA recommends that the Agencies adopt an “actual knowledge” standard before finding that a bank “becomes aware” that a restricted transaction occurred, and that “actual knowledge” will only be found when facts are made available to a person at the institution who bears responsibility for that transaction or for the institution’s compliance obligations for such transaction. Additionally, the Prohibition should make clear that non-exempt institutions have no duties or liabilities unless they possess actual knowledge of the restricted transaction.

7. Establishment and maintenance of a list of unlawful Internet gambling businesses by the government may be an approach to pursue, but only if certain essential conditions are met.

The Agencies have asked for comment on whether government maintenance of a list of prohibited unlawful Internet gambling businesses is appropriate. As the Agencies indicate in the explanatory language to the Prohibition, establishment and maintenance of a list of unlawful Internet gambling businesses presents several challenges.(18) However, given the alternative of an impossibly vague definition of “unlawful Internet gambling” and the overbroad requirement of intercepting international transactions through correspondent relationships, ABA believes that a government generated list could have some merit, but only if certain essential conditions are met and so long as depository institutions are absolved from other requirements intended to block unlawful gambling transactions.

Of course, ownership and upkeep responsibilities for such a list cannot and must not fall on financial institutions. To place the onus for a list on financial institutions would only exacerbate the Act’s void-for-vagueness delegation flaw, converting it from impossible individual determinations of legality to impossible joint determinations of blacklisting. Actually, there is no way for the industry to generate such a list. Rather, it is the federal government that has the authority and experience in implementing sanction programs as exemplified by the programs collected under the Office of Foreign Assets Control (OFAC).

As part of its consideration of establishing a sanctions list, ABA urges the Agencies to keep in mind the following point: the scope of the list should occupy at least a functionally comprehensive segment of the payments system. For instance a list that leaves to banks an obligation to bar transactions with entities not on the list under additional circumstances would be of very little value. However, for example, a list that comprehensively covers all cross-border wire transfer payments, even if it does not cover other payments systems, is worth considering as a functionally helpful way of attaining compliance for an identifiable set of restricted transactions within a discrete designated payment system.(19) Of course, such a list must still meet the following essential conditions:

• the listed names are to be searched only against data fields normally recorded in connection with the payment method;

• non-exempt participants would not have any further identifying or blocking obligations beyond the list with respect to the set of designated payments (e.g., cross-border wire transfers);

• reasonable policies and procedures for the designated payments would be deemed compliant if limited to checking customers against the list and blocking only transactions with those listed customers; and

• any list contains only commercial customers (and not individual gamblers.)

8. The description of compliant reasonable policies and procedures can be improved.

Although the Agencies have taken an essential step in accepting as compliant those reasonable policies and procedures limited to commercial customer due diligence, it is important that the final rule underscore the statutory latitude that “permit[s] any participant in a payment system to choose among alternative means of identifying and blocking, or otherwise preventing or prohibiting …restricted transactions.”(20)

Comments from many members indicate that the “nonexclusive list” of policies and procedures provided by the Agencies in § ___.6 of the Prohibition offers too little specificity in determining what the federal banking regulators and their examiners will look for in determining compliance with the Prohibition. Too often, banks have been subject to examiner second-guessing about what are otherwise systemically reasonable procedures based on individual instances of non-detection. ABA is encouraged that the Supplementary Information recognizes that restricted transactions may still come to light after reasonable account opening due diligence.(21) In other words, finding restricted transactions subsequent to due diligence is not a sign of non-compliance. We urge the Agencies to acknowledge this latitude expressly and to assure that in any future examination procedures the range of permissible institution judgment is underscored.

ABA members are apprehensive about the Agencies’ use of examples of Internet monitoring as possible standards for gauging compliance. Even suggesting that banks should spend their time surfing the Web to identify misuse of payments systems by Internet gambling businesses is prone to establish a de facto examination standard. Regulatory compliance must not be based on the technological breadth of the Google search engine. If unlawful Internet gambling businesses are supposed to be identified based on Internet research, ABA proposes that the government conduct that research and translate its findings into a list of identified businesses subject to the conditions previously described.

9. Financial Institutions should have a longer period to phase-in the new policies and procedures prior to the effective date.

The Prohibition currently provides for a six month phase-in period before non-exempt payments system participants will be required to “establish policies and procedures reasonably designed to identify and block or otherwise prevent or prohibit transactions in connection with unlawful Internet gambling.”(22) Our members believe that this period is much shorter than the time it will reasonably take to develop these policies and procedures. This is especially true given the lack of specificity regarding which policies and procedures are necessary to comply with the Prohibition, as well as the ambiguity regarding their scope due to the uncertainty over which transactions fall within the definition of “unlawful Internet gambling.”

ABA believes that given the uncertainty surrounding several important portions of the Prohibition, the Agencies should provide for a longer phase-in period for the effective date of the Prohibition. ABA believes that a period of no less than 24 months should be provided to comply with the Prohibition’s requirements.

Conclusion

As a general proposition, ABA supports the Agencies in their efforts to define regulations and procedures that would effectively enforce the Act while limiting the burden placed on financial institutions. However, given that there are several points requiring change or clarification, including the essential component -- a definition of what transactions “unlawful Internet gambling” encompasses—several revisions must be made and a new rule proposed for further comment. Even then, major, fundamental flaws must be cured before effective implementation of the UIGEA can even be contemplated.

ABA would be happy to work with the Agencies to modify the proposal. If the Agencies have any questions about these comments, please contact the undersigned at (202) 663-5051 or via e-mail at rriese@aba.com or nfeddis@aba.com.

Sincerely,

Nessa Feddis, Senior Federal Counsel
Richard R. Riese, Director
Center for Regulatory Compliance Center for Regulatory Compliance

Footnotes:


1 The American Bankers Association brings together banks of all sizes and charters into one association. ABA works to enhance the competitiveness of the nation’s banking industry and strengthen America’s economy and communities. Its members – the majority of which are banks with less than $125 million in assets – represent over 95 percent of the industry’s $12.7 trillion in assets and employ over 2 million men and women.
2 Unlawful Internet Gambling Enforcement Act, Pub. L. No. 109-347, 120 Stat. 1952 (codified as amended at 31 U.S.C. §§ 5361-5367 (2006)).
3 72 Fed. Reg. at 56685.
4 31 U.S.C. § 5364(b)(3). This language is mirrored in the Prohibition. See 72 Fed. Reg. at 56685.
5 72 Fed. Reg. at 56697.
6 72 Fed. Reg. at 56688 (emphasis added).
7 72 Fed. Reg. at 56698.
8 Id. at 56688.
9 Id. at footnote 15.
10 Id. at 56690.
11 Prohibition on Funding of Unlawful Internet Gambling, 72 Fed. Reg. 56680, 56682 (Oct. 4, 2007) (to be codified at 12 C.F.R. § 233 and 31 C.F.R. § 132).
12 Most recently, this disagreement was evidenced on November 14, 2007, by representatives of the Department of the Treasury and Department of Justice before the House Judiciary Committee’s hearing on establishing consistent enforcement policies in the context of online wagers. See http://judiciary.house.gov/oversight.aspx?ID=396.
13 72 Fed. Reg. at 56861, n. 1.
14 Valerie Abend, Deputy Assistant Secretary, U.S. Dep’t of the Treasury, Statement before the U.S. House of Representatives Comm. on the Judiciary (Nov. 14, 2007).
15 Catherine L. Hanaway, U.S. Dep’t of Justice, Statement before the U.S. House of Representatives Comm. on the Judiciary (Nov. 14, 2007).
16 72 Fed. Reg. at 56682, n. 1 (emphasis added).
17 72 Fed. Reg. at 56698, 56699.
18 See 72 Fed. Reg. 56690, 56691.
19 By describing a hypothetical list tailored to a particular payment system, ABA does not mean that a list covering all payment systems should not be considered or attempted as long as it meets the essential conditions recited above.
20 31 U.S.C. § 5364(b)(2).
21 See, 72 Fed. Reg. 56688-9.
22 Id. at 56680.

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The Slow Exit, Part 5: Good Riddance to Bad Pammie

Date: Sat, Mar 8, 2008 Internet

With the recent announcement that Pamela Anderson's very brief marriage to Paris Hilton sex-tape degen Rick Salomon was over, maybe we can finally watch Pammie disappear from the poker scene. That'd be cool wouldn't it? For what it's worth, Anderson has filed for an annulment of the brief marriage to Salomon, the "let's pretend it never happened" allowance that the legal world creates for dumbasses who never should've gotten hitched in the first place.

Not that Pammie asked me, y'know, but if she had, I'd have ventured that marrying someone to settle a poker debt wasn't likely to turn into long-term wedded bliss. The annulment motion, of course, if successful, would preclude Salomon from receiving any sort of settlement from Anderson in the unlikely event she stumbles into a really well-paying gig again sometime soon. I don't think that magician's-assistant gig with Hans Klok carried a seven-figure salary.

It's funny that after all this time, only recently have Doyle's Room commercials featuring Pammie snuggling up to Doyle begin to appear on certain poker broadcasts. (At least I've only noticed them in the past month or two.) Who knows? Maybe there was some hidden maneuvering that allowed these commercials to be shown, since I'd guess they were filmed in middle or late 2006, about the time the mock wedding with Doyle was arranged at the 2006 WSOP. Rumor has it that all involved in that were rather embarrassed by the proceedings. But see, Pammie? Just fake the damn wedding. You'll get the same headlines....

Oy. Makes my head hurt, it does.

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The Slow Exit, Part 4: Possible Insider Cheating Acknowledged by Ultimate Bet

Date: Sat, Mar 8, 2008 Internet

As posted on 2+2 an elsewhere:

ULTIMATEBET INTERIM STATEMENT


Contact: Press@ultimatebet.com


Montreal, Canada (March 6, 2008) – UltimateBet (UB), one of the ten largest online poker cardrooms, today issued the following interim statement with respect to allegations of unfair play on its site.

“On January 12, 2008, UltimateBet was alerted to allegations that a player with the online handle “NioNio” exhibited abnormally high winning statistics and was accused of having an unfair advantage during play. These allegations were made both directly to UltimateBet by concerned players and the KGC, and indirectly through several web forums. The allegations also included reports of suspicious activity concerning the deletion of the NioNio account and other accounts that may have been related to this scheme.

“We immediately launched an extensive inquiry involving an independent third-party expert to review hundreds of thousands of hand histories, all of which were promptly locked down and made available to this expert. The initial findings of our third-party expert confirm that the NioNio account’s winning statistics were indeed abnormal, and we have expanded the investigation to look into whether an unfair advantage existed, how such a scheme might have been perpetrated, and whether additional accounts beyond those of NioNio were involved.

“UltimateBet is in regular communications and contact with its regulatory authority, The Kahnawake Gaming Commission (KGC), and will continue to cooperate fully with that body.

“UltimateBet is determined to complete a full and thorough investigation. We pride ourselves on providing a safe, secure playing environment for our customers. The investigation has proven to be extremely complex and, therefore, has been more extensive and taken much longer than initially expected. We continue to aggressively pursue the matter and will communicate the findings of our full investigation to our regulatory authority and to our customer base as soon as practicable.”

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The Slow Exit, Part 3: More Hawbaker

Date: Sun, Mar 2, 2008 Internet

Iggy was on the ball again in tracking the latest episode in the ongoing Brandi Hawbaker fiasco. This latest episode seems to have been a post by a writer for a competing publication (both of which will go unnamed), who had possibly planned to do a print feature on Brandi or Naami or whatever her name will be next week.

That story concept seems to have been deep-sixed. Prudent decision, if in fact the original post wasn't a hoax of some sort, which it may well have been. Brandi Hawbaker as a circus sideshow for a blog or a discussion forum is wonderful entertainment, but the concept of her as a serious poker story is stunningly laughable, and way too risky (in my humble opinion) in legal terms to even want to bother making the effort. Were one to ask my opinion, I'd say that they don't make poles long enough to touch it in terms of real news. It's cheap gossip fodder, nothing more, and fodder of a potentially poisonous sort.

Some people exist only to find a way to attract attention to themselves, and ultimately, one has to exercise some self-control and turn off the attention spigot. Therefore, I'm calling it quits on the "Brandi" stuff, because the only parts of the ridiculous saga that are serious have now become serious for all the wrong reasons.

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