Online Poker Cheating in the US

Alan C. Lawhon posted a response on a thread over at 2+2 and emailed me asking if I might offer some insight from an operator’s perspective on the topic of cheating in online poker and how it may or may not be different in a regulated US market.

At the moment there are over 200+ posts on that thread so I’m not going to read everything else in the thread. I’ll contain my thoughts to address the points that Alan brought up in his post. Also, I’m not going to comment on the specific example used in the thread. I don’t have enough background on the story.

Also, I am not a lawyer. Never even played one on TV. I know that some of the examples given below might be technically incorrect to a lawyer but I welcome to clarify my errors in the comments. I’m simply trying to illustrate some of the legal complexities of what many people might perceive to be easy.

One issue that Alan brought up was the “outing” of cheaters, publicly humiliating them by naming names and taking legal action against them.

I don’t mean the site merely “outs” and publicly exposes these type folks. Going after means the site “makes an example” of the cheater, (preferably by having the appropriate legal authority bring criminal charges for theft), prosecuting the cheater, and sending him or her to jail.

First off, I believe that one of the reasons nobody names names is because it opens them up to a slander or libel lawsuit. While the poker room security department may feel completely certain that the person was cheating, that does not necessarily mean that they can convince a jury that the suspected player was actually cheating and thus the player may end up making more off the lawsuit than he ever could at cheating.

The second reason they don’t do this has to do with exactly as Alan himself later suggested.

These sites were all operating outside of US territory – and thus outside the jurisdiction of US law

In my opinion, this is the biggest reason for not pursuing most cheaters. It’s also something I think will change drastically under legalized and regulated online gaming in the US.

In a quasi-regulated market the poker room operator always has the burden of trying to decide which is the proper jurisdiction for the crime. If Player A is a citizen of Alpha Land and Player B is a citizen of Beta Land and the poker operator is based out of Corporate Land, what law enforcement authorities do you contact to file a complaint?

Considering that most of today’s online sites are based in places like Costa Rica, Gibraltar, Isle of Man, Alderney, and Cypress, the chances of any player willingly subjecting himself to jurisdiction in those countries is pretty low. If I’m cheating on XYZ Poker based in Gibraltar, I would just avoid stepping foot in Gibraltar.

That will change dramatically when poker is legal and regulated in the US. Take for instance the online gaming laws in both Nevada and New Jersey which stipulate that the players must be physically present in the state while gambling. It’s a lot easier to reach out and touch someone when all involved parties are in the same state.

The other problem is that all of the above mentioned countries don’t have the resources or the clout to do much. Let’s say that XYZ Poker in Gibraltar wants the government to extradite Player A to Gibraltar to stand trial. The overhead of filing so much paperwork for such a petty crime would make prosecution unrealistic. Gibraltar simply doesn’t have the resources or infrastructure to handle it.

So the other option is prosecuting Player A in the player’s own jurisdiction. They could file a complaint in Alpha Land. But Player A argues that the crime didn’t occur in Alpha Land so Alpha Land has no jurisdiction to prosecute. Player A claims that the fraud actually occurred in Corporate Land which puts us right back where we were a few paragraphs ago.

That’s if Alpha Land even knows what the heck XYZ Poker is talking about or if gambling isn’t a gray market activity in Alpha Land. Imagine XYZ Poker showing up at the FBI asking them to investigate someone cheating in online poker.

Alternatively, Player A could claim the crime actually occurred in Bravo Land. The player he defrauded was in Bravo Land when he stole the money so neither Alpha Land or Corporate Land have any jurisdiction in the case.

This would also be complicated by the fact that because the crime is Player to Player theft and not theft from XYZ Poker, XYZ Poker has zero legal standing to even file a complaint. They were not harmed by Player A’s actions, Player B was and it should be up to Player B to file charges in an appropriate jurisdiction, which we’ve seen is not always an easy thing to establish.

Okay, so hopefully that addresses the “why” aspect of it.

Alan also speculates as to the poker room’s motivation for burying an investigation.

Somebody in top management surely made the assessment that it’s better to nip this problem in the bud – the “evidence” developed internally by our security team may be damning against Nick, but the cost of actually dealing with him could be too great, so we’re basically going to ignore this problem.

While I won’t discount that this may be the reason at some small poker operations (though I’m unaware of any actual incidents), I highly doubt it is the case at the larger, more well-known poker rooms. First off, because I know some of them and have worked with them and know they don’t ignore cheating. Not that that should be any real proof though since I also knew and worked with Howard Lederer and Ray Bitar, but that’s another story.

The more likely explanation is that the security department is monitoring every hand played on the site. Most sites have certain red flags that can be triggered by anomalous behavior. Typically, every day when the security team comes in they get a report of all anomalies detected and they investigate.

The vast majority of red flags are false positives. In other words, no cheating or fraud was occurring.

Just like when your credit card company freaks out and freezes your account because you happen to use an ATM in Thailand (which has happened to me multiple times). Nobody has stolen my card. There is no illegal or fraudulent activity going on. I just happen to be conducting a transaction that for a set criteria the bank has set has tripped a red flag in the credit card company’s systems.

I speak to a security rep, they confirm it’s legit, and everything is hunky-dory.

So, most of the time, the security department is sifting through a lot of false positives.

The other aspect of it is effort vs. reward. Since player cheating tends to be Player to Player cheating, the security department can’t really afford to employ an army of investigators or develop elaborate traps to catch them.

If it doesn’t immediately smell fishy, they’re likely to just call it a false positive (since that’s a major portion of their caseload) and move onto the next case.

They’re dealing with a problem of volume.

Your average police department has access to way more resources and forensic equipment than any online poker security team and even the police can’t solve 1/3 of the murders committed in the United States. Given the enormity of the task, and the relatively few resources (compared to a police department) it’s not surprising that some incidents are closed as false positives when actual cheating exists.

I highly doubt anybody is deeming it better to sweep it under the rug. It’s always possible though. However, there are plenty of legitimate alternative theories of why things happened the way that they did that better fit with the actual events of the incident.