Anatomy of a Cybersquatter, Part IV: The Lawyers Always Get Theirs

If Federico Schiavio had previously thought that Harrah's was an evil, false-speaking corporate beast, by the middle of 2004 those opinions were set in stone. Harrah's had acquired the "Horseshoe" brand name and the World Series of Poker, but it'd sure be a lot easier for them if a short-term deal could be worked out, bringing Schiavio on long enough to train other Harrah's staff. 

The problem was that the World Series of Poker software at Binion's was Schiavio's personal baby, and despite the fact that the data itself would have to transfer to the evil empire, Harrah's, Schiavio despised this predatory outsider. Besides that, Schaivio had an ace up his sleeve -- he now owned the wsop.com domain. 

But here's an oddity: Schiavio had picked up the domain months earlier, back in May of 2003, and then done nothing with it until the end of November. Why on earth would Schiavio, a loyal Behnen employee, acquire this property and leave the faux porn site detailed in Part I of this report untouched? 

The answer is that Dan Albrecht was still alive, and Schiavio didn't want to pull down the previous content and alert anyone -- Albrecht, the Jack Binion camp, or Harrah's -- that he'd picked up this potential goldmine on the cheap. Schiavio knew that Harrah's attempting to acquire the Horseshoe, and the outstanding, in-default note that Jack Binion still held on the casino was also public knowledge, certainly known by Behnen's management. 

Albrecht died in October, almost the perfect timing for Schiavio's needs. By November's end, Schiavio had started placing his own content on the site, the better to strengthen his own assertive claim to the domain. Harrah's has a policy of not offering direct commentary on active litigation, so it's not clear exactly when they discovered that Schiavio had indeed acquired the lapsed wsop.com domain. 

This is where arguments concerning due diligence reach their anti-Harrah's extreme: The argument, well-thought out on several levels, states that if Harrah's had been doing proper research into a property that it wanted to buy, it should have been looking into all things connected to Binion's, including the "Horseshoe" brand and the World Series of Poker. 

It's a key point. Harrah's should long have known that the existing web presence for the WSOP was rolled up within the binions.com web site, and if they had no intent on retaining the Binion's Horseshoe property or continuing the binions.com presence, then they should have been exploring alternate domain names for the WSOP, with wsop.com and worldseriesofpoker.com being among the most obvious possibilities. Harrah's did, in fact, register a less logical domain name for backup purposes -- horseshoewsop.com -- but it's clear that better names were in others' possession.

The arguments continue regarding issues such as trademark registration and protection. Shouldn't Harrah's have been doing research into the sum total of intellectual properties owned by Binion's Horseshoe Casino? It appears that Harrah's did not learn about the gaps in Becky Behnen's intellectual-property holdings until -- at the earliest -- the second week of January, 2004. That said, the deal between Harrah's and Behnen would not be finalized until March, meaning that during this time frame Harrah's may well have become aware of the problem, but wouldn't have had clear ownership anyway.

There is, however, one hidden catch. Behnen had no willful intent to sell the old family casino and she had repelled all of Harrah's previous advances. It was only when the federal agents raided Binion's Horseshoe, seizing a million or more from the cashier's cages and tables, that Behnen realized there was no longer a choice. (The delay, the failure to heed the writing on the wall, likely cost her millions.) 

In this light, and prior to Harrah's acquisition of Jack Binion's properties only a few weeks earlier, Behnen would certainly never have responded to an inquiry about exactly what intellectual properties Binion's Horseshoe possessed. And with an unwilling seller and the Jack Binion deal still not confirmed, the acquisition of the Horseshoe brand and the WSOP would've seemed unlikely, a reason why Harrah's may not have pursued deeper knowledge as to the intellectual properties owned by Binion's Horseshoe.

All that changed in early January, 2004, when the two-month process of finalizing the deal began. The major issues had been decided but innumerable fine points remained, including things such as Schiavio's own contracted consulting services to Binion's Horseshoe. Back in Part 2, we reproduced part of an important January 19, 2004 e-mail from James Laura to Schiavio. Let's reprise the first paragraph from that telling communication:

"Your working with Harrah's was brought up in the negotiations and they gave a name of someone for you to contact regarding the performing the job for the year end for Harrah's. Angie should have the name of the person to contact."

Schiavio's existing consultant contract with Binion's would not have transferred to Harrah's, but he was the guy who wrote the existing WSOP computer application and worked with at least some portions of the binions.com web site, certainly knowledge that Harrah's could make use of for a time. 

Schiavio and Harrah's set up a meeting for February, as detailed in Schiavio's own words here:"Harrah's asked to meet with me in early February 2004 about my consulting for Harrah's and helping with the transition of the business from Binion's to Harrah's. We were not able to agree on terms, and I later found out that Harrah's just wanted to use me and discard me when I was no longer needed."

Is that quite the way it happened? It is likely that sometime between January 19 and February 23, when Harrah's and Schiavio had their meeting, Harrah's discovered that Schiavio had registered the wsop.com property under his own name, in roughly the same time frame as their discovering that "WSOP" was not protected property within Binion's. 

This discovery likely followed another, even more treacherous stumbling block: It turned out that the World Series of Poker itself had been sub-licensed to Becky Behnen's husband, Nick, meaning that a sizeable amount of the income generated by the WSOP at the end of the "Becky years" never made its way into the Binion's Horseshoe coffers itself -- pension-fund payments were skipped, tax bills ignored, service contracts allowed to lapse... all while the WSOP itself grew.

Someone did well off the World Series of Poker in the Becky Years, but in the long run, the hard work of 1800 casino employees went for naught -- the operation was being gutted from within. Harrah's and Schiavio had their February meet, and the transference of wsop.com to Harrah's ownership was almost certainly one of the sticking points in the discussion, a mandatory issue if Schiavio was to do any work for Harrah's. Here's some of the evidence that Schiavio cites as Harrah's bad-faith negotiations, as captured from internal Harrah's executive e-mails:






"FS" stands for Federico Schiavio, "SOW" for Standard Order for Work, and all these instances were obtained by Schiavio in the course of his own battle with Harrah's. 

But here's something to consider: All of the evidence Schiavio cites (including the excerpts above) date from February 9, 2004 or later, when it became clear to Harrah's representatives that Schiavio had interests other than what was expected. Federico Schiavio filed his trademark application for "WSOP" on January 28, 2004, prior to his own meeting with Harrah's. 

So who was dealing with whom in bad faith? At that point, Harrah's could not apply for any sort of legal recognition or protection of "WSOP" in its name, because until the deal was sealed in early March, Harrah's was not the party of interest. And Schiavio, technically a consultant but still loyal to Behnen, used that two-month lag to file his own trademark application, based entirely on his surreptitious purchase of the wsop.com domain name and a small amount of content he had uploaded to that site as of that date.

During this same time frame, Schiavio recognized that a phrase such as "Infodomini’s First Annual WSOP Poker" would be unlikely to pass a court challenge, so the "World's Standard of Online Poker" moniker was created. It's not clear exactly when Schiavio came up with the "World's Standard of Online Poker," but web archives show it in place as of April 1st, 2004:

However, the site itself is content barren, with little except the online-casino banner ad at the right. He'd do better. First, though, it was "Game on!" in the land of the lawyers, since Schiavio wasn't about to give up his insurance policy for cheap. For Becky Behnen, he'd worked for $60 an hour, but the number he pitched to Harrah's in a later offer was $120/hour... and that was just a start. Schiavio also wanted to bring on two additional consultants, Schiavio associates Tong Yi and Mike Curtis, with Yi to receive $40/hr and Curtis $80/hr. But it didn't stop there. 

Schiavio also wanted to extract a licensing fee for his WSOP tournament software. His first attempts to attract a huge one-time fee went for naught, so he instead asked for 1% of the entry fee for each player.It's a staggering amount, when one considers that the current entry fee for the WSOP Main Event is technically not $10,000, but $10,600. This difference --- the "juice," as it's called --- varies, based on the event, but it's rare indeed for any tournament to charge juice in excess of nine or ten percent of the true event fee, that amount being added into the prize pool. 

Irrespective of advertising revenues and other income streams, the juice is what pays for the tournament itself to be run, covering the officials, the dealers, the cards and chips, event advertising... even an allowance for the tournament space itself. Tournament fees are reminiscent of the old "the film's for show, the food's for the dough" line regarding theatres; casinos offering card tournaments really make their nut from the overall increase in casino traffic, not the tournament itself.

But a slice as large as Schiavio wanted wasn't just impossible, it was obscene. Schiavio must have thought that his computer software was some hot shit, but he also thought that he'd earned himself a lasting piece of the World Series of Poker pie. Given how the WSOP itself was being funneled through Becky's husband Nick, such sweetheart deals seem to be one of the lasting legacies of the Becky years itself. Harrah's said no to the extra consultants and no to licensing Federico's software, even if some higher hourly rate for Schiavio himself, perhaps $80 or $100 per, might have been in play. Even that, though, would have meant the surrender of the wsop.com domain rights from Schiavio to Harrah's.

It meant no deal. Had Schiavio signed up with Harrah's for a transition period of a year, as was originally pitched by Behnen, Schiavio could have earned between $100,000 and $200,000. He was aware as anyone, however, of the spike in interest caused by Chris Moneymaker's 2003 WSOP Main Event win amid the rapid growth of poker and its World Series in general. Remember, too, that the casual or new poker fans, the newbies to the scene, would be the ones most likely to fire up the computer and type "wsop.com" into their browser window, just to see what was there. No doubt Schiavio could track the increased hits in his own website statistics, despite its lack of any significant content.

What was Schiavio's asking price? Neither side will say, though figures of a million and higher are rumored. It was certainly high enough and inflexible enough to make Harrah's not want to bother with paying a normal squatter's fee for making the problem go away, while Schiavio had his own schemes to make that WSOP-intended web traffic drop some money into his coffers on the way. Those plans involved the creation of an online poker room connected to his burgeoning multi-level-marketing scheme. We'll come back to this part of the tale, concerning "WSOP's All In Poker," in Part 5, but there's more lawyerly stuff to dispense with here.

Within two weeks of closing the deal with Becky Behnen, Harrah's attorneys served Schiavio with a cease-and-desist letter concerning his usage of the wsop.com site. Harrah's demanded that Schiavio abandon a WSOP logo that was clearly a knockoff of one of the World Series of Poker's symbols. They alo demanded that he turn the wsop.com site over to Harrah's. Schiavio did abandon his first imitative logo -- and hence, had to modify his initial trademark application -- but he hired his own lawyer to aggressively defend his play for the WSOP mark and the ownership of wsop.com. The sides have been at war ever since.

Harrah's wasted little time once the ink was dry on the Binion's Horseshoe acquisition to begin a two-pronged attack on Schiavio. Schiavio's trademark application for "WSOP" represented the greatest immediate threat, and Harrah's immediately filed protests against the already-pending approval of the mark, while filing their own subsequent trademark application for "WSOP" rights in late April of 2004. 

However, since Schiavio filed first, Harrah's own application had to be suspended until the matter could be resolved. At this moment, no trademark exists for the mark "WSOP," which isn't to say that Schiavio hasn't tried to infer it amid his own protests and pleas for donations. Schiavio was, however, successful in registering the mark "World's Standard of Poker".

One thing about lawyers, though -- they're predictable. Even if they can't find the right evidence to support their client's cause, one can sleep soundly knowing that, hourly billing rates secure, they will grab huge piles of something and fling it at the wall to see what sticks. Harrah's lawyers, somehow unaware of the presence of the earlier wsop.com site, still dug through the evidence they could corral, finding numerous examples to illustrate that "WSOP" was indeed used interchangeably with "World Series of Poker," and in the eyes of the serious poker player they were one and the same. 

Schiavio's lawyer did even better, somehow managing to submit with a straight face the supposition that "WSOP" wasn't even unique in general terms to the World Series of Poker. After all, there was evidence that the same letters had also been used to identify such common conversation topics as the West Sak Oil Pool, the Worst irredundant Sum-Of-Products expression (if the conversing parties were engineers), a Verizon billing-statement phrase called Working Service On Premise, and let's not forget those WSOPs, which everyone really knew were Weapons System Operators in the United Kingdom's Royal Air Force. Schiavio's lawyer even tossed in examples of "W.S.O.P." being used, reasoning that it wasn't even an acronym, it was just a set of initials. Here's the visual example of this that Schiavio and his lawyer cite:

It's absolutely irrefutable -- it is indeed shown here as "W.S.O.P." But never chalk up to true widespread usage that which can be better explained by hideous spelling and punctuation skills. After all, as this larger, separate image shows, the person who designed this flyer and related text was wholly unsuited to the task, not even able to spell correct the famous downtown Las Vegas street that fronted Binion's Horseshoe Casino itself:

It's Fremont St., not "Freemont," rendering this piece of evidence redikulous years before it resurfaced here. But one needed really to look no further than this text segment, a bit higher on the page, to realize that for the person doing the typing, the "." sign was a weapon of war:


* * * * * * * * *
Hundreds of pages of legal documents and exhibits flew, first in the battle over the competing trademark applications and protests, and then, much later (in 2006), in the arbitration process overseen by ICANN as Schiavio fought to retain control over the wsop.com domain name. Schiavio subsequently proclaimed on his website about how Harrah's domain-name protest was dismissed, but a more careful examination shows that it was dismissed on a technicality, that being the ongoing trademark dispute. Should Harrah's prevail in that matter, then a new protest within the ICANN framework concerning the domain name is a surety.

The above seems to indicate that only Schiavio's side was the one stretching things to establish a point, but Harrah's lawyers did their own grasping-at-straws routine. Probably the silliest exercise was sending a pre-worded statement of declaration off to Becky Behnen, hoping that she would disavow the "you keep it" reply Schiavio says Behnen uttered when he made his offer to turn the wsop.com name over to her control. Whether the statement was true or not, or was even uttered at all, was hardly the point -- Schiavio had a couple of the old Behnen cronies to back him up and Harrah's had no proof to the contrary.

Harrah's attorneys, however, overreached, trying for a grand slam in a situation where they were unlikely to even reach first base. The 16-point declaration they created for Behnen, in the off hopes she might sign it, went well beyond what they would have needed to undermine Schiavio's claims. In light of Behnen's own existing history with the wsop.com site, and the widely-known disorder in the last days of her casino ownership, it's clear there's no way she could or would sign the thing. Your author reproduces it here, because in the greater historical perspective, it's a moment of high comedy:

DECLARATION OF BECKY BINION BEHNEN
1. My name is Becky Binion Behnen. I am over the age of eighteen (18) years and am competent in all ways to give this Declaration. I have personal knowledge of the facts stated in this Declaration and know them to be true and correct.2. From 1998 to January 2004, I was the President and Chief Executive Officer of Horseshoe Club Operating Company, owner of Binion's Horseshoe Hotel & Casino in Las Vegas, Nevada (hereinafter referred to collectively as "Binion's").3. My father, Benny Binion, founded Binion's.4. In 1970, my father founded the famous World Series of Poker tournament. Since that time, the tournament has been hosted at, and has been an integral part of, Binion's.<5. Since its inception, the tournament has been identified by the mark WORLD SERIES OF POKER.6. For years, Binion's employees have referred both internally and externally to the WORLD SERIES OF POKER mark by the acronym WSOP.7. WSOP is well known within the poker playing world and beyond as identifying the World Series of Poker tournament.8. Federico Schiavio ("Schiavio") was employed by Binion's for approximately three years as its IT director. In this capacity, Schiavio had familiarity with the World Series of Poker and the Binion's web site.9. Given the widespread use of the mark WSOP by Binion's and its employees, Schiavio would certainly have been familiar with the mark and its use by Binions and its employees to identify the World Series of Poker tournament.10. I did not know until being informed recently by an employee of Harrah's Operating Company, Inc. ("Harrah's") that Schiavio had registered the domain name .

11. Schiavio never sought or received my permission to register or use the domain name.12. To my knowledge, Schiavio has not at any time offered to sell or turn over the domain name to Binion's.13. I had no knowledge until my recent conversation with the employee from Harrah's that Schiavio, while employed by Binion's, was alledgedly pursuing the development of an online poker business unconnected with Binion's or that he intends to use the marks WSOP or WORLD'S STANDARD OF POKER to identify that business.14. At no time did Schiavio ask for or receive my permission, expresss or implied, to use the mark WSOP in connection with any business not associated with or owned by Binion's, and I have never acquiesced in Schiavio's use of the mark WSOP to identify any goods or services not offered by Binion's.15. If Schiavio had asked me if he could register the domain name and use it for his own business, I would not have permitted him to do so.16. The WSOP and WORLD SERIES OF POKER marks were valuable assets of Binion's. While Schiavio was employed by Binion's, I was the only person at Binion's who had authority to grant any rights in, or to acquiesce in the use in, the WSOP or WORLD SERIES OF POKER marks by any third party. I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge.Executed this _____ day of April, 2005(unsigned)____________________________________
BECKY BINION BEHNEN

It was a wasted exercise on Harrah's part. No matter what, Becky Binion simply could never admit to having given away the rights to the domain wsop.com without knowing that she was potentially damaging the value of the World Series of Poker. 

Yet if things weren't complicated enough, then one of those unusual coincidences would stir the pot even more: The legal firm handling the Harrah's side of this battle bought the legal firm where Schiavio's lawyer worked. It meant a delay in all matters while Schiavio brought new legal representation up to speed.It also meant that somewhere in the greater firm now representing Harrah's, a legal construct called a "Chinese wall" had to be set in place; the attorney's and company's notes coming from the Schiavio side were sealed and could not be used directly by the Harrah's side, nor could the attorney or any of the staff previously working on the matter for Schiavio even discuss the matter with the Harrah's staff now assigned the case.

When legal-firm mergers and acquisitions occur, such Chinese-wall setups are a matter of course. In most instances they become a moot point -- discovery normally brings all the relevant evidence into sight for both parties. But Schiavio's former attorney likely knew what Schiavio himself did, that being the real origins of the wsop.com domain, and that meant the notification from Schiavio's new attorney that a Chinese wall be implemented wasn't then just a formality; it was mandatory.

When and where will the legal actions resolve? It's still too soon to tell. In recent months each party has filed a lawsuit against the other, although again Schiavio beat Harrah's to the punch, filing his case in August 2006 in Los Angeles (Schiavio is actually a resident of Marina del Ray, CA) just weeks before Harrah's lawyers filed their own action in Vegas, the reasons for which will become clear in Part VI. 

In this case the "first to file" rules mean that Harrah's Vegas action may be dismissed and re-introduced as a counter-complaint to Schiavio's own suit, but the lawyers, at last report, are still hashing that one out. Besides, there's more of the greater tale to share, that being exactly what Federico Schiavio's plans were for the coveted wsop.com domain.

Next: Part V -- One for All and All for One

© 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

Anatomy of a Cybersquatter, Part V: One for All and All for One

Federico Schiavio did indeed have ideas for making some money off the "WSOP" name, but he'd need a little help. Sometime in late 2004 or early 2005, Schiavio cemented a deal with Paul Barnes, an Irish businessman who had spent several years as a sales-and-marketing executive for Access Gaming Systems Europe, Ltd., whose clients included Binion's Horseshoe Casino back in the Becky Years.

Whose idea it was for the shape of the new room was remains unclear, as is whether Schiavio had a piece of this new room himself or was simply one of the top three affiliates, as some sources indicate. Whatever the nature of the agreement, Schiavio committed his wsop.com conduit to that long-promised poker concept, the All In Poker online room, which turned out to be a new "skin" or network member site on the Prima Poker Network (later Microgaming). The room had an official live date of November 15, 2005, though it was open and operational in an unofficial beta mode for a lengthy prior period.

All In Poker was pitched to poker players with a new twist; it was set up as the first online room where "rakeback" was distributed via a multi-level-marketing [MLM] scheme, rather than through standard affiliate channels. Rake, that portion of each pot that is withheld by the house to cover expenses and generate the profit, has always been much lower in percentage terms among online rooms than with their real-life, "brick-and-mortar" counterparts. Slicing the potential profit margin thinner, many sites often distribute a portion of the rake that they collect back to the players as a further incentive to join and play. It can be done through freerolls and other special promotions, or it can be done through a direct rebate of part of the rake, commonly called rakeback.

All In Poker's marketing hook was to return up to 51% of the rake generated to the players, through the MLM's "downlines," a pyramided network of recruited players that was nested seven levels deep. As existing players recruited others, their own monthly rake paybacks would build, as would those for the affiliates at the top of the pyramid. Should any top-level participant somehow manage to completely fill up the seven-level pyramid that he headed (with a "waterfall" effect designed to trickle extra players down the pyramid to plug in holes) then these top-level participants could collect a small, rake-based commission from up to 97,655 other players, the maximum allowed under the program.

Besides, the "Three Musketeers"-inspired visuals were cute, too. All for one and one for all, just a batch of poker buddies helping each other to make more money....

Schiavio was an integral part of the operation from day one, whether or not he was one of the site's three top-level affiliates or a silent partner. By January of 2005, fully ten months before All In Poker's official launch date, Schiavio's wsop.com touted the unique poker/marketing proposition that was in the works:



The lengthy delay in the room's launch spanned much of 2005 and was likely due to the need to secure additional investors to handle startup and early operation costs, not the least of which was the need to join one of the existing online poker networks. Paul Barnes finally secured that part of the deal by signing on with the Prima Poker Network (now Microgaming). All In Poker joined the Prima network as one of its bottom-tier, basic-service skins. This still meant an outlay of about $100,000 for what was essentially bare-bones connectivity and service. (Prima, one of the largest online networks in terms of the number of interconnected rooms/skins it supports, offers several levels of connectivity and support, at costs that could, for its most lavish package, exceed a million dollars.)

If nothing else, the delay gave Schiavio plenty of time to establish and promote his own downlines, playing as much as possible to casual visitors who stumblesurfed their way to the wsop.com site. 

What cannot be underestimated is how important the perceived WSOP gravy train was, for all involved. All In Poker's web page to this day features a Flash "Emovie" fully five minutes long, as does Schiavio's site (in a manner of speaking), though the version on Schiavio's site has gone through a couple of cosmetic changes and at least one attempt to hide from Harrah's prying corporate eyes. 

Regardless, the All In Poker and wsop.com versions were all but identical, except the All In Poker home-page version doesn't mention "WSOP", while Schiavio's version continually offered references to "WSOP's All In Poker." If the phrase can't be taken as a sign of ownership, it was certainly crafted to create a sense of endorsement or sponsorship by [the] WSOP. These screen grabs compare like moments from the All In Poker version to both early and more recent scenes from the wsop.com site:





Obviously, the same person created all of the movies, but whether that person was Schiavio, one of his employees, or someone within Barnes' Dublin-based All In Poker operation, remains an unknown.

What we do know for certain is that Schiavio spent much of 2005 recruiting players for his downlines, but once the All In Poker room went live and was fully exposed as perhaps the 70th in a large family of Prima skins, the rate of enrollment through Schiavio's site may have decreased rather than increased. With the poker room in full view, knowledgeable poker people could then recognize it for the play on the World Series of Poker's brand-related goodwill that it was. Some thought it was still a decent concept (and signed up), while others thought it was a cheap hustle and said so.

One indirect measure of the rate of increase is to measure new signups to the wsop.com forums area, which has of late fallen into a den of bulletin-board bot postings hawking pseudo-Canadian pharms, cheap mortgages, and ubiquitous links to porn. Aside from at least two blatant spammers who signed up over and over again, one always tagging his new entries with a "Mongolia" address, here's how signups for the wsop.com forums area have progressed for the last twenty months:

02/05: 2 (not including three of Schiavio's admin accounts)
03/05: 1
04/05: 7
05/05: 24
06/05: 19
07/05: 70
08/05: 60
09/05: 13
10/05: 18
11/05: 12
12:05: 7
01/06: 4
02/06: 4
03/06: 10
04/06: 7
05/06: 18
06/06: 16
07/06: 5
08/06: 9
09/06: 23
10/06: 6
11/06: 4

Two things are immediately obvious. First, the biggest months for new sign-ups into the forums area came while the 2005 World Series of Poker was in progress in mid-summer, indicating referred interest from that poker event. Second, there was a marked dropoff after the November debut of the All In Poker online room itself.

It's not fair to assume that the above is a direct correlation of new signups to All In Poker as a whole, nor even of all new signups through Schiavio's wsop.com portal alone; these wsop.com forums were increasingly overrun by spammers -- likely as attracted by the letters "WSOP" as anyone else -- and they are all but abandoned today. They were relatively unimportant. Schiavio kept right on signing up new people and adding them to his downline; it's not inconceivable that he had multiple downlines. He had special recruiting interests in poker discussion forums, podcasts, and other poker-community groups, believing, as all good MLM-ers do, that word-of-mouth is the best way to spread a neat, new concept.

How big did Schiavio's own downline(s) become? One well-placed source indicated that as 2006 matured toward summer, Schiavio had a few thousand players signed into his downlines, through his own efforts and those of players beneath him, and he was collecting rake-based commissions of several thousand dollars a month. The guy at the top of the pyramid always does well. The problem, though, was that the rate of growth had dropped off, only partly because it was now public knowledge that "WSOP's All In Poker" was just another online poker site, albeit it one with a unique marketing scheme.

Federico Schiavio might have been an aggressive angle-shooter, but his overseas partner, Paul Barnes, was claimed by the same source referenced above to be a smooth-talking free spender who hid the fact that revenues weren't coming up to expectations, and that the start-up seed money was running out. And according to that source, even Schiavio was caught by surprise by what happened next.

Barnes had quickly built up All In Poker's Dublin-based support staff to 30 workers or more and spent money that a site giving back up to 51% of the rake it had generated probably would have been better off reinvesting. Barnes thought nothing of attending several business conferences on All In Poker's dime, or, reportedly, of traveling to the 2006 World Series of Poker in "support" of a player who had won a seat to the WSOP Main Event through a Microgaming (Prima) qualifying event. Meanwhile, the network itself was suffering connectivity issues, crashing repeatedly over the early summer months with little or no explanation (or in some cases, refunds) coming through from All In Poker support.

Then came the moment of truth that seems to always happen with pyramid schemes crashing back to earth. In early summer of 2006, participating players suddenly found that their downline-generated payments had been slashed by up to 90%; many stopped receiving payments entirely. Even Schiavio's payments were withheld under Barnes' say-so, dropping from something approaching $10,000 a month to a figure said to be under one grand. One of the major investors in the site had pulled out, the mandatory payments to Microgaming needed to be made (which may explain some of the connectivity problems at that) and the rakeback funds earmarked for downline redistribution were simply never sent as promised.

Even people with direct e-mail access to Paul Barnes received no reply to their inquires, no explanation of what was going on with the site. Finally, at the end of August, 2006, e-mails went out to players notifying them that as of September 22, 2006, All In Poker would cease operations. "Unfortunately," went the missive, "our multi-level-marketing model has not been taken up by enough members to make the business sustainable." Deposits were no longer accepted, players had until September 22 to withdraw their remaining online bankrolls, and All In Poker was scheduled for its terminal trip to the trash heap.

End of the tale? Of course not.

Next -- Part VI, Not Quite Coda

© 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

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 wsop.com site, they may also have discovered that the references to "WSOP's All in Poker" were to be found, amazingly, on the allinpoker.com 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 wsop.com 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 wsop.com 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 wsop.com 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 pokerbio.net. The Pokerbio software is also linked from the "Products" portion of the wsop.com site.

Only one of the pokerbio.net 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 wsop.com pages and the "WSOP's All In Poker" promotional materials remained. The directories uncovered were these:

http://www.wsop.com/text/
http://www.wsop.com/text/WSOP_html/innerpages/ [this directory was recently removed]

Both included the promotional materials linking to the All In Poker site, even as the current wsop.com 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 wsop.com 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 https://www.allinpoker.com/registration/register0.jsp:



... and at https://www.allinpoker.com/aip/registration/register0.jsp:



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 wsop.com 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 www.wsop.com 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 fxs@wsop.com."

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 wsop.com 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 wsop.com -- 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 wsop.com 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 wsop.com 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 wsop.com 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 WSOP.com, and that henceforth and so on, blah, blah, blah, WSOP stuff would be found on WSOP.com. 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 WSOP.com. 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 WSOP.com 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 WSOP.com 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

Rearranging the Furniture

Now that my WSOP.com series is complete, pending further developments and/or an examination of my source materials to see if I've overlooked anything interesting, I want to flip things around so that it reads top-to-bottom within the blog, rather than the other way around. Pay no attention to the dust bunnies. 'Saright?

Hoax Monday

For it not being April Fool's Day, yesterday was a stand-out effort.

I was up at the crack of nine or so, more by accident than anything else. That's about the earliest anyone will ever hear from me on Mondays, since covering the online events that start on Sunday nights always runs into the Monday a.m. hours. This last time those ran later than normal, due to the large attendance in FTOPS #3 over at Full Tilt; it was about 3:30 a.m. my time when I sent the week's writeup over to John Caldwell and curled up on the couch for some shut-eye.

I checked my e-mail first thing, of course, upon my waking. I admit fully to having an Internet addiction and I'll please have a little more juice, thank you. Anyway, I had a quick note from Lou asking me if I'd heard anything on the Doyle arrest rumors --- I hadn't, of course --- but I promised to snoop around. I figured I was several hours behind the story, anyway, and wasn't likely to catch up in any meaningful way. I also did my normal Monday check-in with Schecky (that's Caldwell), via chat, which started like this:

Me: John?
John: Haley?
Me: :-)
John: No, I don't know if Doyle is arrested
Me: lol

Yeah, that's how my day started. We all know that the rumors kept building, and several bloggers went right out and proclaimed "Doyle Brunson Arrested," without waiting on the facts, which turned out to be not to be true. Does one really think the first report of Doyle being arrested is likely to appear on a relatively new user's posting on an Australian poker site? Well, that's where the ball started rolling.

Meanwhile, I was off on a different wild-goose chase of my own, and it turned out that I would get caught without all the facts, either. I ran across the snippet about PokerBandits.ca that Chris Hanel had posted over at April's place. (And congrats on the graduation, April!) Anyhow, Chris wrote about how this site had promised to show U.S. players how to get around the UIGEA ban and play on their site of choice, no matter whether or not that room allowed U.S. players. The hook, though, was that the site had been told to be shut down by the U.S. FBI and Canadian trade authorities.

Indeed, the site's content had been taken down and replaced with a notice saying that the site had been closed. But checking through Google caches of various site pages, I was able to uncover the original forum content and determine why the site seemed to have been yanked. The main forum post, also alluded to in an erstwhile (and partly bogus) press release from Jan. 25, detailed how to "get around" the UIGEA.

The post mentioned the use of anonymizing browsers and web connections, something I wrote about a couple of months ago, but it also then went into what was basically identity theft, suggesting that the player use a common name of someone already known to be living in Canada, then create one's own financial connections attached to that stolen name/address. Clearly, this would be an unwise way of trying to circumvent the process, but that's how it was laid out.

The site as it appeared yesterday was what I've encountered numerous times in very small-scale operations that skirt the line. They get some sort of threatening contact from a governmental agency, or a major corporation in copyright-infringement examples, with said call simply a way of applying heat to make the offending content go away. In the Napster era I saw this type of thing literally dozens of times. And since this pokerbandits.ca site had not actually commited a crime, but was merely offering instructions on how such a thing could be done, it was definitely in the class of grey-area sites that get told to shut it down before things get out of hand.

I also looked into the site's domain registration, which looked wholly bogus to my well-trained eye. It went to what appeared to be a Canadian government office, and it also looked as though the press releases that were issued by this site were cobbled up out of thin air. (Subsequent investigation by another outlet showed the press releases' contact information to be bogus as well, but given the seedy nature, I didn't even bother to check.) Nor am I likely to call the FBI and ask, because they don't release info on pending internal investigations.

Anyhow, I wrote up a cute little piece on the matter and fired it off to PokerNews, and it turned out to be not quite right. John thankfully killed it for me, because what can not be verified at this point is whether the site was forced to be turned off for real, whether the site's owner got pwned by someone posing as a governmental official, or whether the whole thing was a weird Level-19 hoax serving no real purpose.

Bizarre. And all happening while the Doyle mess was unfolding as well.

As for this PokerBandits site, John forwarded me a link to a Casino City Times article that appeared much later yesterday, while John was trying to verify some of the stuff. John's very careful about such things, which, y'know, is why he's the editor. Seems like the Casino City writer actually did contact all the possible legal entities who were reported to be involved in shutting down the site... and none of them were.

In the words of the late Vince Lombardi, "What the hell is going on out there?" Well, who knows? It now seems as though the PokerBandits site committed hara-kiri, and one can only wonder why. While I'm thankful John had the good sense to toss my piece into the trashcan where it belonged, there's still the open question as to what really happened. Here's some possible scenarios:

1) The site was forced down for real, in the manner described, and the government agency simply didn't track it properly, or gave misinformation to the Casino City writer. Probability: Low. After all, what's the point?

2) The site was taken down after the owner panicked, probably after receiving a call or e-mail from someone posing as a government official. Probability: Medium. As to why this might have occurred, it could have been done by someone who did the same WHOIS lookup I did, saw the bogus information, and was offended by it. It could also have been done by a Canadian citizen who had his identity pilfered and trcaed it back to the PokerBandits site, or it could have been done by someone who tried the methods described, got caught cheating and lost a few bucks in the process, and decided to get back at the PokerBandits site.

3) The whole thing was a weird, publicity-garnering hoax, the conclusion that the Casino City writer reaches. Probability: Medium. Again, if it was a hoax, it was a damn stupid one, because the owner of the site has now drawn attention to himself from the very same governmental agencies he never had to mess with in the first place, if the Casino City story was correct. Given that the original domain-registration was bogus --- it was just updated again yesterday --- and given that the site recommended a form of identity fraud/theft, why in heaven's name would someone choose this method for publicizing one's name? The domain has existed since October, meaning that it has been bought and paid for by a real person for at least four months, even if that person may hiding his identity. Even with bogus registration information, the real owner could now be traced, since all the fake-credit-card domain purchases wash out of the system in 30 to 60 days. Good luck, dude, whoever you are. Expect a knock for real, from guys in dark suits.

That said, I think the Casino City writer did a great job, and that he still doesn't have it quite right. Hoax or not, the pieces still do not add up. And as for me, I'm washing my hands of it.

Oh, Bill and Me, We Disagree...

Yes, yes, I sniped at Bill Rini recently, after yet another one of his glass-half-empty posts. And before we go further into this, let me add this: I like Bill and respect him deeply --- he's done a lot of behind-the-scenes things to make the poker-blogging world a better place for all of us. He's also not afraid to tackle deeper issues, and on a personal note, he was one of the very first poker bloggers to notice that I was trying to do some real poker content on my own sites. Thank you, Bill, I've appreciated that and duly note it here.

Now, on to the topic at hand. I called Bill to task on his making another one of those overly negative Henny-Penny posts of late, this one concerning attendance at last Sunday's major online events. I said in a comment to the post that it was out of context and misleadingly negative, when he wrote this:

"Stars’ $1 million guarantee tournament had about 900+ less players than the week before but still managed to make the guarantee. Full Tilt and Bodog weren’t so lucky and had to add a little moola to their guaranteed prize pools."

In the context of his post, I interpreted his use of "managed" in its most negative connotation, as in "just barely managed to scrape by." Notice also the implication of the phrase "Full Tilt and Bodog weren't so lucky...."

Bill wasn't pleased with me, to say the least.

Well, I tried to explain in a third comment to his post exactly why I found fault with his piece --- and with a very similar (and to my mind, even worse) piece now up at Card Player. It has to do with wanting to write a negative piece and fitting the facts to the piece, regardless of applicability. Unfortunately, his comment beastie accused me of not knowing how to add "0+6," so it ate my comment, and I decided I'd write this piece instead.

The real story is this: Based on attendance at the Stars Sunday Million (which due to its size and cachet is probably the truest bellwether of the situation) the arrests last week of NETeller's founders caused a shock to the online-poker world in the range of 10-15%. However, no one wants to write that story, because it's not as juicy as the "missing the guarantees" angle, which sounds scarier. The problem is that the missed-guarantees angle is a lousy test in this instance.

Bill and Card Player both cite exactly three major events in their respective pieces, the big Sunday events at Stars, Full Tilt and Bodog. Both Bill and CP grab this salient fact for the piece: Stars' Sunday Million attendance was down by 900 in the most recent event. It was actually 890, from 7,632 to 6,742, for a decline in attendance of 13.2%. There are lots of reasons why a tourney could be down 13.2%, among which just might be that the NFL conference championship games were on, and this was the first playoff weekend where all the remaining action was on Sunday alone, rather than split between Sunday and Saturday. Still, the NETeller issue likely had some sort of dampening effect.

But what angle did everyone take? They went for the "down 900" line, which, despite being rounded up a bit, just flat-out sounds scary, if only because the Stars event has so many more players in it than any other. What sounds worse, "down 900" or "down 13%"? Stars was indeed lucky to make its guarantee, at that; they only topped it by $348,000, or 35%, down from 53% a week earlier. (It's still a 13% decline, from 152.6 to 134.8.) The point is, it's not the numbers themselves, but in how they are being used. Bill's working hard to use them in the most negative way possible.

Right. Onward.

I'll go to the Bodog inclusion next, concerning a $100K event which didn't meet its guarantee. Ummm, Bodog's $100K frequently does not meet its guarantee. And wait --- isn't Bodog the site that advertises frequent overlays? And isn't Bodog a sportsbook site first and foremost, and more likely to be affected by the football games as mentioned above? Not mentioned, was it?

To be fair, Bodog has made its guarantee in most recent weeks, but as it's included here, the Bodog example is Swiss-cheesy. To simply assign this single occurrence in its entirety to the NETeller news is improper.

Now, let's go on to Full Tilt, my fave of the three. This was cited by both Bill and CP for not meeting its guarantee. The guarantee was $750,000, and player-paid contributions to the pool were $690,000, meaning that Full Tilt was on the hook for a $60,000 overlay. Now here's the problem: the only way that Full Tilt's attendance on Sunday can be fit into a scare piece is by using the fact that it didn't meet its guarantee. No other statistical interpretation offers as negative a spin.

Bill correctly points out that Full Tilt is not generally in the habit of providing overlays on its major events, and I agree with him 100%. I also agree that the reason this tourney fell short was the NETeller situation. But the only reason that this tourney feel short of its guarantee was that Full Tilt chose the wrong moment to try to jump the guarantee by an incredible 50%, which simply could not occur in light of recent events. What I called Bill and CP to task over was the fact that a whole bunch of positive-spin news was intentionally omitted in order to buttress this inclusion in the "woe is me" canon. Take a look at these facts:

Prize-pool contributions generated by players in the 12/17/06 Full Tilt December $500,000 Guarantee (the prior $535 occurrence of the once-a-month event): $618,500

Prize-pool contributions generated by players in the 1/14/07 Full Tilt $400,000 Guarantee (the most recent major tourney before last Sunday): $494,600

Prize-pool contributions generated by players on Sunday, 1/21/07, in the brand-new, probably-not-going-to-do-it-again-next-month $750,000 Guarantee: $690,000

One could have written that despite the NETeller situation, prize-pool contributions were up by 11.6% over the previous month's high-buyin extravaganza, or by a whoppin' 39.5% over the previous week, despite the arrests. And by the way, that $690,000 was an all-time record for player-paid contributions on Full Tilt, outside of FTOPS events. The previous mark was that $618,500 in December.

But that would have been a good-news spin, and neither Bill nor CP had any interest in that angle. Bill also points out that Full Tilt would never have increased its guarantee if they'd known the NETeller arrests were imminent, and that's true, too. But so what? What's Full Tilt going to do, back out of an already announced tourney? Full Tilt bucked it up and took the hit in a responsible manner.

Now, I really do like Bill, and this is just going to piss him off worse, but them's the real facts. Both his and the Card Player pieces are intentionally skewed to the negative. I respect Bill, but this really is Henny-Penny b.s. Right now he reminds me of Ernest Borgnine's "Detective Mike Rono" character in "The Poseidon Adventure." Not the crappy remake, but the crappy Irwin Allen original.



In case you're wondering, once the boat rolls, Borgnine's character tries to sabotage attempts to erect the Christmas tree and climb out of the soon-to-be-flooded ballroom, and in one of those wonderful plot contrivances only a bad screenwriter would dare to slide by the audience, still manages to be one of the first to climb the tree before its impending collapse, dooming a whole bunch of anonymous extras who probably never had a major bitch with the Christmas Tree plan in the first place. Of course, one has to have an antagonist on hand to create additional plot tension, logic be damned.

Not that "The Poseidon Adventure" is otherwise logically sound. Far from it. Unless that liner's hull had an open screen door in the bottom of it, there's no way that the water inside the stupid boat would rise past a certain point, due to the trapped air inside. It could go to the bottom with lots of trapped air, but the water would not rise much past the level of the main deck, barring damage to the hull. And if the hull was breeched, then air-flow patterns would lead everyone right to the breech in the overturned boat, thus offering the likeliest route for escape. Bad science makes for a dumbass movie, big budgets, sequels and remakes notwithstanding.

Back to Bill and Card Player and all this other stuff. I still don't see that Bill is being anything but counter-productive with negative-spin pieces like this, despite his immense knowledge. As I said in his comments, I do hold him to a rather higher standard than I do Card Player, whose fiduciary resposibility to the poker world seems to end just shy of the sniffing range of Barry Shulman's wallet. Bill's a lot better than that, a handful of recent weak posts aside.

Help Wanted: Hero

I read the headlines as frequently and diligently as anyone, and I have to say I'm saddened. Saddened, because none of the big names with deep pockets have stepped up and sought an injunction against the UIGEA and the actions of our federal government. There's certainly no shortage of lawyerly types among the top levels of poker heirarchy, or all they all just full of it, buckling under when a real challenge arises?

I find it hilarious that so many institutions are cutting and running, as if they never believed the "poker is legal" line themselves. I'm still waiting to see if anyone in this poker generation has the guts to be the next Billy Baxter, willing to fight the wrongs inflicted by the U.S. government. Let's see, the UIGEA is both overbroad interference with legal enterprises, likely illegal in terms of the damage it causes to collateral businesses, and it also includes mandates which are clearly First Amendment violations. So far, we look like one of those old-western posse crowds, milling in the street, finding excuses to slink off into the sunset when it turns out the bad guy can really shoot.

Bunch of libertarian, free-thinking, independent spirits, my ass. Grow some, oh poker world.

I love reading the posts about which famous American poker name is going to get arrested first. Whether it's Howard Lederer, Doyle Brunson, Greg Raymer, Chris Ferguson, or someone in the publishing end like Barry Shulman, does it really matter? Shulman already gave up the high ground when he accepted the Washington State legislation without a fight, Allyn Jaffray's long-winded proselytizing notwithstanding. It's painful to watch the poker world, supposedly of above-average intelligence, be so collectively stupid. Dear dumbasses, quit playing a tight/weak game of politics and start fighting, or you're going to get blinded out or forced all-in with a weak hand. Now is the time to go on the offensive, get injunctions and have that goddamned UIGEA declared the unconstitutional (and also WTO-violating) piece of shit that it is. Otherwise, the U.S. government wins, picking off segment after segment after segment, person after person after person.

I guess that's why it frustrating to read stuff like Bill Rini's recent posts. Now, I know both Bill and Amy Calistri, either in person or through innumerable e-mails, and they are both in the top handful of media types I respect. But as knowledgable as Bill is, as accurate as some of his forecasts have turned out to be, I still can't join him on this one, and this is why: If his worst-case scenarios are correct, then it doesn't matter anyway. And if those scenarios are true, then all that extensive hand-wringing... and hand-wringing... and more hand-wringing... is just an unproductive waste of time. If it's not true, and there are actions that we can take to put up the good fight, then we need to do that stuff now, rather than do these second-tenor auditions for the poker-world performance of "Woe is Me." That's my problem with Bill's approach. As much as I like and respect him, no bonus points this time.

So Messrs. Shulman and Ivey, Seif and Hellmuth, Brunson and Negreanu, and all you others: It's time to make a stand.

If you don't, then keep on checking over your shoulders, peeking into the shadows. Because one of these times, when the bell tolls, it'll be tolling for you.

Thoughts on NETeller

Needless to say, this one was long expected but still hurts. I'm one of the unfortunates who, through sheer rotten timing, just happens to have a small chunk o' chump change tied up there right now.

We'll see what happens. Reports indicate that ACH/EFT tansactions will now take between two and four weeks to process, purportedly because NETeller's current ACH processor terminated their business agreement. This may well be true, and it may have been something as straightforward as the unknown ACH processor also coming in for heat from the feds under similar money-laundering and racketeering threats, but it's not the only possible explanation.

There is also the chance, albeit it lesser or complementary, that NETeller doesn't have near enough "cash" on hand to cover the crush precipitated by recent events. It's not that the assets aren't there, it's that the assets are reinvested in short-term market tools designed to make those dollars work a little harder, and it may well take days or weeks for enough of them to be reconverted to more liquid form. I would be both unsurprised and unconcerned by this part of it, at least, were this to turn out to be the case. NETeller could process everything at once, but could also incur market penalties by liquidating certain financial tools before they come due. Having an ACH problem, even a manufactured one, might save them a few million dollars... no drop in the bucket when perhaps two-thirds of their business is simply going to go away.

NETeller was as taken by surprise as any of us, by all indications. Their knee-jerk withdrawal from the U.S.-to-gaming market is a $7 billion example of way too little, way too late. If they believe that what they were doing is okay, then they should have no problem in continuing to do so and fighting the charges against their founders. But if they knew they were doing something wrong and continued to do it, then backing out now would hardly matter. History can't be unwritten. All NETeller's reaction looks like from the feds' viewpoint is a corporate admission of guilt.

Do I think that Lawrence and Lefebvre allowed their vast financial windfall to delude them into naivety? Oh, yeah, no doubt on that one. And now hundreds of thousands of poker players are left scrambling as a result.

Puzzle Winner Announced

And the winner is...

Jennifer "Cookie" Newell, from the wisepoker.com crew. Jennifer was one of quite a few entrants who solved my recent crossword puzzle and entered the prize drawing, which was conducted earlier today. Jennifer wins herself a brand new copy of The Rules of Poker, by Lou Krieger and Sheree Bykofsky!

Sometime down the road we'll do this again, promise!

The Best of Sklansky, December 2006

We should all share in the genius that is David Sklansky. I haven't seen stuff so consistently entertaining since Redpill stopped sharing his poker wisdom.

Best Sklanskyisms for the month of December, 2006:

"For instance anyone who is doing poorly [in life in general] while admitting they have never even tried to learn basic probability or logic goes almost automatically into the category of those that don't deserve our help, in my book."

"I would have been out of my element a little bit in Sociology or Psychology but not to the point that I couldn't have made up for it with sheer thinking ability."

"Up until the last few years I could easily have been a better baseball manager than anyone who had ever managed."

"It seems inpossible I would be the first to think of this but you never know. [] The entities I am speaking of are the people you talk to while you are dreaming."

"I'm pretty sure that I have the jist of a proof that free will exists. Intuitively I am almost certain of it. But to turn this general idea into a rigorous proof would probably require a Godel type logician. Mere hi fallooin philosophers are probably not smart enough. I might be able to do it myself but I have got a poker tournament to deal with."

"With or without a patent, somebody out there should be able to transfer this idea, that should be simple to implement on a computer, onto something the size of a calculator. And then put my name on it, manufacture it for $10 a pop, and sell a couple of million of them for $39.95. That's fifty million bucks gross profit after subtracting my ten million endorsement fee."

"So I am left with poker and writing. As for impact on the world, there still a chance for me. Possibly by writing the most effective algebra book ever written."

"When Dan Bright asked for my opinion about whether he, a mildly nerdish 21 year old, had any chance of participating in a threesome with two hot female bisexual friends of his, I offered my standard insurance offer. $100 even money to be paid to him in a year if he fails and to be paid to me the moment he succeeds (with any two girls. Not just the two mentioned). He not only accepted, he offered to give a running commentary on his exploits on this forum while we cheered him on and offered advice. So I started that thread. Unfortunately as I was doing that, Dan got himself banned from this website. Maybe temporarily. Maybe indefinitely. That's off the subject.
But his bad luck is someone's good luck. Such a thread needs to be here. After all some of the best minds on the internet are coming to this forum and almost certainly there are others of you in a similar situation who would like access to those minds. I will entertain applications on this thread. The bet with me is optional."

"One of the problems with democracy is that some idiots vote and some genuises don't."

"It isn't really fair to defer to the majority in cases where a large minority have a STRONG reason to take the other side and the majority is close to neutral."

"In response to an open question about how a human UFC champion would fare in a fight against a 100-lb. chimpanzee: Assuming the chimpanzee knew it was in a fight from the git go, the answer would depend on whether there are some lethal or semi lethal blows that the human is aware of. I don't know about that. If there isn't, the chimpanzee is the dead nuts."

"NO ONE HAS A RIGHT TO FORM A STRONG OPINION ABOUT ANY IMPORTANT SUBJECT IF THEY REALIZE THEY ARE CAPABLE OF CHANGING THEIR MIND UPON THE PRESENTATION OF FAIRLY UNSUPRISING NEW EVIDENCE." (Caps are Sklansky's.)

"So my question is were old time earthquakes that human science will never be able to investigate always on faults? And there is another question. Suppose there are some miscreants who deserve an earthquake now but don't live on a fault. Are we to assume thyat God used his omnipotence to forsee their sins and planned out the appropriate faults billions of years ago to punish them appropriately while still fooling the geologists?"

"In the baseball case I am speaking for any good gambler/mathmetician who also knows the game. I'm not just talking about myself. Meanwhile if a Mickey Appleman or me ever did achieve success, the present day managers would almost certainly crack open the books to reachieve superiority. So practically it means little. [] As for my contention that I am potentially better in math and science than 95% of Phds, I only bring that up to justify the claim that my opinions should be given a lot of weight for reasons other than my poker books. That's not a big deal since, as luckyme would say, my words would speak for themselves. But my lack of credentials does sometimes make me feel like bringing up some other credential like stuff. [] One thing I want to make very clear is that I don't talk about the possibility that I could have been one of the top 50 scientists or mathmeticians with regret. Even I strongly doubt that I could have been in the top five. You think I regret not being number 16? Find him and compare his Google hits or half his age girl hits to mine and tell me how they compare." (emphasis mine)

And of course, the finale:

"I expect to keep up this pace for about six days to see how well it goes out there and multiplies. Then I'm going to rest."

What, a $12K Final Table?

Well, fine. The blind pig has stumbled into the veritable oak forest, if you will. I was over at that site I really shouldn't be playing at so much, but if you must know, you must:



Not much to say. I sat on my hands for about the first 90 minutes, playing something like two pots. In the first, I lost a set-under-set matchup to an even-shorter stack and in the second, I doubled up with kings to get above par. Finally, with single-digit M's looming, I caught a hand or two, and worked up to where I thought I might sneak into the money if I caught a big hand.

That happened when I found queens and another player had tens, and all of a sudden I was inside the money bubble. Play didn't loosen up much inside the bubble at my table, basically because we had one giant stack pounding the table while several of us shorter puppies manuevered to hang on. It was here where I had my one suckout of the event, rivering a flush with A-8 suited against A-J; the guy (the button) had shown a tendency to steal, and I re-raised from the big blind. Ooops. Well, in my defense, I was in a similar spot (except just outside the money) in a $25K event last week, and in that instance my kings went down to queens.

What comes around, goes around.

My next jump up in chips came from a re-raise/steal type of play, when I pushed all-in from the middle with A-Q, having basically just enough chips to make the play, and the aggro player in early position made the call, with a suited A-T. Given that at this spot I had done my very best rock imitation for six or eight laps, I was surprised he made the call. But he did, and didn't connect. Yay me.

I found the occasional spot to steal, then started to see some cards --- I had one little run where I caught three big hands in a row but didn't get any action, but I did chip up out of the extreme danger zone. My willingness to push, though, when I had six or seven times the big blind amount in chips, did serve me well. A short while later I made another push from early position with jacks, and found a caller from the button from a player with A-9 suited. My jacks held. Suddenly I was over $50,000 in chips and in position to think about a final table, though with several taller stacks lying in wait, I knew I'd have to stay lucky.

Well, I tried. I was one of four shorter stacks at the final table --- and 'yay' that part, at least --- but I finally got caught with my hand in the cookie jar. I'd basically stayed steady at about $55,000 in chips, dropping as low as $40K and maybe just topping $60K once or twice. The blinds, though, were already $4,000/$8,000 with $1,000 antes and on the verge of climbing higher, so I tried to steal from the button with a suited Q-8. (I was in seventh of the eight remaining spots... so no big deal.) I figured unless I ran into a monster, I'd likely have live cards and a flush draw, which is how it played out. The small blind --- who is, not coincidentally, the current leader on the site's weekly TLB, looked me up with A-9 and about twice as many chips. No loverly queens, eights, or clubs for me. My late run ended, and I went to the rail in eighth, for three (small) bills and some change.

Still a decent run, as it had been a long time since I'd made some noise in an MTT.