Tuesday, April 19, 2011

Were the Feds Bribed Into Shutting Down Major Online Companies?

When I originally heard the news that Pokerstars, Absolute Poker and FullTilt had been shutdown by the feds I assumed this meant curtains for the entire U.S. online poker industry. But so far that's not the case.

The big three had maybe 90% of the market share, but there are a half dozen other sites that have had small, but significant player bases. Is it possible that one of these sites will become the new leader in the U.S. market or will the rest of these sites get picked off as well?

I'm not one to put forth conspiracy theories and I don't spend much time thinking about what goes on behind the scenes in government, but something just doesn't add up here.

About a year ago the state of Kentucky tried to seize the domain names of a bunch of online casinos, poker sites, and sports betting sites just like the federal government did on Friday. They weren't able to do it because the state government just didn't have enough muscle behind it. But many of the sites took action and blocked users who lived in Kentucky so they wouldn't get sued.

Did Kentucky go after Pokerstars, FullTilt and Absolute? Of course they did. But here's where it gets interesting. They went after over 140 other sites as well. Online poker rooms and casinos are not trying to hide so I'm sure all it took was an afternoon pounding the keys on Google to generate that list.

There is a pretty big difference between 3 and 140. I get spam e-mail from 3 online casinos a day and you'll find ads for at least 7 or 8 in every issue of every poker magazine.

So why did the feds stop at the big 3 instead of going after everyone? Because someone at one of the other half dozen sites that has a chance to inherit the U.S. online poker kingdom bribed someone high up to make sure the shutdown only affected the big 3.

It's like in the movie Heat when Tone Loc trys to trade information about Robert De Niro's crew to Al Pacino in exchange for Pacino shutting down the chop shop across town so that Tone's chop shop can prosper. It was a minor sub plot at most, but you get the idea.

Pokerstars was making billions of dollars off the U.S. market. Not millions, not tens of millions, not hundreds of millions - BILLIONS! All that demand is still there and all you have to do is look at what happened in 2006 to see the effect of the industry leader stepping aside.

Party Poker was King in 2006, Pokerstars was a Duke and Fulltilt was more like the manager of the local brothel. But when the Unlawful Gaming Enforcement Act passed Party Poker left the U.S. market and in a matter of a few short months pokerstars had swallowed up most of their customer base with Fulltilt scooping in some sizable crumbs.

If things stand as they do today, one of these smaller sites like Cake Poker, Carbon Poker, Bodog or Doyle's Room is going to blow up and a handful of people are going to get very, very rich. Actually there's no chance of it being Bodog because their software is a steaming pile of shit.

Maybe these other dominos are going to fall...but maybe not.

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