Wednesday, February 14, 2007

Anatomy of a Cybersquatter, Part VI: Not Quite Coda

All In Poker's announced departure from the world of online poker sites didn't come off quite the way it was announced, but one other factor remains to be considered -- the possibility that Harrah's Entertainment exercised some behind-the-scenes muscle in an attempt to squelch what they interpreted as Federico Schiavio's leeching on the World Series of Poker's fame. While Harrah's could easily identify all the perceived-as-offensive elements of Schiavio's site, they may also have discovered that the references to "WSOP's All in Poker" were to be found, amazingly, on the website itself.

Given the timing of the lawsuits filed by Schiavio and Harrah's in the summer of 2006, Harrah's may well have contacted Microgaming about the WSOP references on the All In Poker site, and Microgaming in turn may have contacted All In Poker on the issue, with All In Poker's financial difficulties also becoming more widely known. Other Microgaming sites, such as Bet Hold'em Poker, were scheduled to have a presence at the World Series of Poker itself, and most online sites tread carefully when it comes to Harrah's Entertainment and the WSOP.

Still, that remains conjecture. There may have been no involvement of Microgaming at all, but it then would be likely that Harrah's served Schiavio with an as-yet-unpublished restraining order of some sort, perhaps in July of 2006, about when the 2006 World Series of Poker hit the meat of its six-week-long run. This could also explain why Schiavio's own lawsuit against Harrah's was filed first, in August of 2006, with the Harrah's action not officially filed until September. [Late edit: Schiavio and Harrah's continue to trade filings in this ongoing legal matter.]

Another thing that happened at Schiavio's was the taking down of the existing front page and direct links to the "WSOP's All In Poker" registration area, along with front-end links to the other "WSOP"-tagged sections of the site. Most of the newer replacement pages, which visitors to the site can now view, feature a green color theme, while older portions of the site were done in a navy blue tone corresponding to All In Poker's own color scheme. As of this writing, the home page contains a lengthy and impassioned message from Schiavio, in essence a condemnation of Harrah's and a plea for funds to help finance his continuing legal battle.

It's interesting, though, that the pages referring to "WSOP's All In Poker" weren't really gone --- they were just moved to other, camouflaged directories, some of which were linked to from at least one other site owned by Schiavio associate Harvey Makishima of Biosoft Sports. Makashima sells a poker biorythyms software product at The Pokerbio software is also linked from the "Products" portion of the site.

Only one of the site's links hooks up to the secreted portion of Schiavio's site, but subsequent investigations of Schiavio's site uncovered two directories where the older pages and the "WSOP's All In Poker" promotional materials remained. The directories uncovered were these: [this directory was recently removed]

Both included the promotional materials linking to the All In Poker site, even as the current front page -- the one condemning Harrah's -- offers a standard affiliate-style link to a different, newer online room, PitBull Poker.

Are these pages still in use in a word-of-mouth way? No one can say for sure, but what's interesting is that over on the All In Poker side of the relationship, another set of hidden directories existed until the very end of 2006, including a landing page still tagged as "WSOP All In Poker." 

What's that? Didn't All In Poker go out of business? It seems not. On the very same day that the site was originally scheduled to drop from view (September 22, 2006), a letter subsequently went out to a few key affiliates that a new investor had been found. This is true; a new investor, still a believer in this site's MLM approach, gave All In Poker a new lease on life. Also, it seems as though a lot of the preexisting pyramid structure -- along with perhaps a back-owed rakeback payment or two -- were chopped away from the structure in the process.

Meanwhile, Schiavio professed to others how he'd been as scammed as anyone else, but is it really true? The duplicated directories on the All In Poker site indicate otherwise, and Schiavio's own endorsement appears on the All In Poker signup page to this day. The standard player-registration page at All In Poker identifies the site as just that: All In Poker. The other version, however, again hidden in a parallel directory, attempted to sell to players the concept that the site was "WSOP All In Poker," and this was the landing page for any and all sign-up requests originating from Schaivio's pages through the end of 2006. Here's how they appeared during November of 2006, although they have been changed again as of late...

... at

... and at

Note that both pages included a "Click Here" link regarding information about All In Poker's post-UIGEA stance -- "UIGEA" referring to the Unlawful Internet Gambling Enforcement Act, which was signed into law on October 13, 2006, well after Schiavio's disavowing of AIP boss Paul Barnes to other sub-affiliates in his own downlines. It was also well after All In Poker pulled off its return from oblivion. The "WSOP All In Poker" signup page no longer exists on the All In Poker site but was archived by this writer for posterity.

There were only two possible explanations for the second page's existence, prior to the later removal of the "WSOP" reference from the secret All In Poker registration pages. Either Barnes was ripping off Schiavio's "WSOP" connection in a manner ironically similar to Schiavio's own plays on the World Series of Poker, or the two remained in cahoots, despite Schiavio's other disavowals. Both Schiavio and Barnes stood to gain from whatever traffic funneled down the existing pipes, even if it wasn't quite as prominent as before the battles with Harrah's reached the courts.

Also, the versions of the All In Poker front pages in existence during late 2006 included that endorsement from Schiavio, even if the text does seem outdated... or curiously understated... for someone with Schiavio's deep ties to All In Poker. The endorsement is one of 20 or so that appeared in rotation on the page, though one can cycle through the entire endorsement selection at will. (Late note: All In Poker has been editing some of these pages as this piece is being created; the Schiavio endorsement remains embedded in the code but now seems to appear only on some of the multiple versions of this page --- hh.) Per this endorsement:

"People, this is the best thing I've ever walked into. After only 3 months of marketing the concept to people I know and meet, I have 166 members. 106 of them are directs so therefore I don't have to play any hands to get my full commission which is averaging me $50 a day, and this is how I do it. My standard message to individuals is as follows, We are giving everyone the opportunity to start their own business, no money down ever, and be in the black the first month. How? By playing poker and referring players. When I target web businesses I add the following line, By marketing my site to your existing customer base you will have created yourself an additional income stream without investing a cent. How do I go about recruiting new members? I started going to the card rooms in my area playing $40 buy in tournaments and sitting down with 9 new prospects every time. After a few hands and some small talk I ask one of them if they play poker online, if they say yes I give them my 1 minute talk above and my business card with the web site address. Usually the product description is enough to arouse the person's curiosity and I wind up giving 5 to 6 business cards at each table. Soon, everyone in my downline who plays and refers will receive their own personal website identical to but with your Sponsor ID embedded in the link so everyone who goes there and signs up will be in your downline. There are of course lots of other places to recruit people who love playing poker and want to earn extra income doing it - in fact, anywhere that you met up with friends and colleagues. If you have any questions Email me"

No one's ever said that Schiavio hasn't put a lot of effort into his scheme, nor that the idea of a MLM-driven online poker room is destined to fail. With the free-spending Barnes at the rudder, All In Poker still seems a long shot at best, particularly if one of its stocks in trade is to alienate its own network, as happened in mid-2006. But that brings us to one last little wrinkle in All In Poker's velvet-lined murk.

All In Poker advertises itself as offering "51% rakeback" to its players, but that's not strictly true. The commissions paid also depend on several other considerations, and only in the instance that all conditions were perfectly met by all participants would the 51% (or anything close to it) ever be paid.

The MLM portion of All In Poker after its rebirth consists of "members" and "super affiliates." A member must play a set number of raked AIP bonus hands, 750, during a given period (monthly) to qualify for full repayment of generated rakeback as generated by the other members in his own downline. And if you sign up, play only for yourself and don't sign up other members, you get zero rakeback. The only way one can qualify to receive full rakeback without playing the 750 raked hands monthly is by doing 100 direct player signup/referrals themselves, a rather sharp increase over the five players one would have in the level immediately below his own part of the MLM pyramid. The 95 others are pushed down to lower spots in the pyramid based on the "waterfall" effect as touted in All In Poker's online brochure and e-movie. Only then, having signed up 100 others, does one qualify for the 100% share without playing the 750 hands; otherwise, it quickly slides down a scale to just 25% for no hands played, with the other 75% reverting to All In Poker.

One can do a combination of both raked hands and third-party signups to achieve full, 100% payment status, but the nature of the pyramid itself then guarantees that every player at the bottom level, with no players below them, gets nothing back at all. And there's another point as well, for those that do sign up other players and somehow qualify for "100%." 100% of what? Of the 51% of generated rake targeted to be repatriated to the players, it has to be distributed back across the levels above. Here's the commission table describing how the rake generated by a given player is distributed to the players above:

Level # (Max. # members) % Commission

Level 1 (5) 10%
Level 2 (25) 10%
Level 3 (125) 10%
Level 4 (625) 15%
Level 5 (3,125) 15%
Level 6 (15,625) 15%
Level 7 (78,125) 25%

Total (97,655) 100%

See the problem? It's only once the initial pyramid begins to fill up that a significant portion of the purported rakeback goes to the players, and even then, due to the way the percentages are skewed, it goes to those levels far above. Whereas the earlier version of the All In Poker payment pyramid may have rewarded players for their own play, that self-generated portion disappeared in the reworked scheme.

One would be hard-pressed to come up with a greater incentive for tearing down and rebuilding a cash-poor pyramid scheme than having a few thousand of those Level 6 and 7 spots start to fill up, necessitating that rake be paid out to the players rather than remain in the All In Poker coffers. The greater the rake percentage actually being paid to the players, the lower the relative percentage available for operating costs, whatever those costs are designed to include. But one thing is clear: The All In Poker concept, as with other MLM-designed pyramid schemes, is really designed to enrich the people at the top.

* * * * * * * * * * *

All In Poker continues its existence as an online poker skin, presumably a member in good standing in the Microgaming network. Schiavio's own site also makes use of an extensive selection of pages describing the basics of poker, online tournament structures and the like; these dozens of pages of text come from an earlier version of a library of template pages that Microgaming grants to each of its skins as a way to educate their customers about poker basics and the way the Microgaming network works. More specifically, the content of these pages themselves date from 2005, back when Microgaming was still the Prima Poker Network; this contact has been replaced by newer versions on most, but not all, other Microgaming network sites.

It's odd though, that these support pages don't appear on the All In Poker site, but are instead found over at -- perhaps explained by Schiavio's need to have some content in place to show that this is a real poker site in his pending lawsuit with Harrah's. The content, though, represented either an explicit theft of intellectual property by Schiavio or a formal business agreement between Schiavio, All In Poker and Microgaming. (Microgaming did not respond to an inquiry about the presence of its content on Schiavio's site, despite the fact that Schiavio's site is not the Microgaming member site; All In Poker is.) Despite the fact that the exact same Microgaming/Prima-created text can be found on a half dozen other sites, note the ownership disclaimer at the bottom:

It once again demonstrates that Schiavio was far, far more than an All In Poker affiliate, "super" or not.

The "LTD" tag, indicating U.K. incorporation, is noted, too. Yes, Schiavio thought out well his plans to keep the domain out of Harrah's hands or make its obtainment as expensive as possible. Schiavio worked in Vegas for Becky Behnen and recently operated from California, but one report had him back in his native Italy of late, making the ongoing civil actions that much more difficult for Harrah's. Paul Barnes, All In Poker's chief executive, seems to have relocated as well. Contact information for AIP in these post-UIGEA days now heads to an address in the British Virgin Islands.

A long, strange road indeed. No one can say for sure the ultimate fate of the domain or Federico Schiavio's MLM dreams. At this juncture, no one is talking; it's a matter for the lawyers and the courts.

© 2007, Haley L. Hintze. All Rights Reserved.
Creative Commons Rights Superceded on this Material.

Link to Introduction
Link to Part 1
Link to Part 2
Link to Part 3
Link to Part 4
Link to Part 5
Link to Part 6

Postscript, 2020: So what happened with all this stuff? Well, a couple of months after I published this here on my own site. No poker outlet at the time that I checked with at the time would publish it.

I sent a link to the seven parts of this to what was then Harrah's corporate counsel. I received an enthusiastic "Thank you!" in response, but I never heard from them again. 

By the summer of 2008, I inquired again about it when I was actually at the WSOP, but was told it was a corporate matter. During that time, the WSOP announced that it had obtained the rights to the, and that henceforth and so on, blah, blah, blah, WSOP stuff would be found on Jeffrey Pollack, then the commissioner of the WSOP, gave the scoop on the rights acquisition to another outlet and not to me. (Pollack always was a douchenozzle.) 

A check of court records shows that all extant cases pitting Schiavio against Harrah's were closed in mid-May of 2008, a month or so before Harrah's and the WSOP publicly disclosed the acquisition of However, the case dockets curiously remain under seal to this day. The likeliest explanation is that Harrah's finally agreed to pay Schiavio some amount of go-away money to obtain the domain. I sincerely doubt Schiavio got anything close to the million he sought, but a couple of hundred thousand? Sure, I could believe that.

I believe the WSOP likely would have acquired the domain at some point anyway, but I was literally the catalyst for the process, and I likely hastened the eventual transfer of the domain into Harrah's (now Caesars) corporate hands. That is, I and the lengthy story you've just finished reading. -- hh


23skidoo said...

I've got to ask Haley.... why is this not published?

This is really good work. I can not emphasize this enough.

Haley said...

Umm, hard-hitting, "dangerous," investigative-style pieces are generally a hard sell, particularly in a difficult time such as this. I tried for over two months, and finally saw the story itself starting to ebb away. So here was better than nowhere.

In the end, it brought me nothing but a couple of hundred of hours of wasted time, not just a few headaches, and quite a few kudos from my peers. Thanks for those, all of you.

pokertart said...

Fascinating article. It's shame it wasn't published, it deserves a larger audience. But thank you for sharing it here.