Game Theory: The Death of Online Poker

On April 15, thousands of professional Internet gamers were put out of work by the U.S. Justice Department.

You didn’t realize there were so many people who derived some or all of their income from online gaming? Well, if poker isn’t a game, then I’m not sure what it is. And thousands of people—many of them college students and the unemployed—played poker online to support themselves, right up until the Justice Department decided to pull the plug.

Technically, Internet gambling isn’t illegal, or at least not clearly illegal. When the Bush administration rammed through the Unlawful Internet Gambling Enforcement Act of 2006 (the UIGEA) as a last-minute addition to a port security bill, they didn’t bother to really define “unlawful Internet gambling.” Instead, they opted to deny the financial tools commonly used for e-commerce (extension of credit, electronic fund transfers, etc.) to any enterprise transmitting a wager to any location where that wager is illegal.

But these laws, which are different for each state, simply can’t be applied to something like Internet poker. Plus, all of the major poker sites were based offshore, bringing international law into the picture.

President Obama, in his mysterious efforts to cement his reputation as The Second Coming of George W. Bush, decided to pick up the UIGEA ball and run with it. Thus, on April 15, the Justice Department seized the domains for Full Tilt Poker, PokerStars.net, and Absolute Poker; froze billions in assets; and arrested 11 of their executives. These three weren’t chosen at random: They are the three largest online poker sites.

If you were a casual online player, you may miss the thrill of playing for real money. But if you relied on that income, you woke up on poker’s Black Friday to find your world gone. Rather than taking on the complex task of defining and perhaps even regulating Internet gambling, the government simply destroyed it.