The Poker World is Flat - Part I

Editor's note: This syndicated article by James McManus first appeared in The New York Times and is being published unedited by Card Player for your reading enjoyment.

In his optimistic best seller "The World Is Flat" (Farrar, Straus & Giroux, 2005), The New York Times columnist Thomas L. Friedman uses "flat" as a synonym for connected – digitally, that is, by fiber-optic cables.



Friedman makes a compelling case that a "triple convergence" of Internet technology with economic and political events at the dawn of the 21st century has generated "more horizontal and collaborative" means of creating value. While warning of several dangers lurking in this global topology, he celebrates the more level playing field and the breathtaking variety of opportunities it offers for those with the imagination and technical training to seize them. The online-poker boom is a telling example of flatness, of course, and that "The World Is Flat" doesn't mention it will be the subject of my next column. For now let me focus on another strange fact, namely how unruffled the virtual-poker world is by the Justice Department's contention that it violates American law.



A recent front-page article in The New York Times reported that, despite the illegal status of online casinos in this country, even blue-chip houses such as Merrill Lynch and Goldman Sachs have begun to buy their stock. The article noted that the increasing fervor of American investors "highlights the difficulty of policing cross-border activity in the Internet age at the same time that electronic commerce and a global economy are creating fast economic partners across national boundaries." According to industry research, more than $60 billion has been wagered on more than 200 poker sites in 2005, most of it lost or won by Americans. For the past two years, traffic on the leading Web sites has doubled about every six months. On Dec. 1 Morgan Stanley reported that Sportingbet was taking in $530,000 a day from its poker business. Partygaming has been valued as high as $12 billion since June 30, when its initial public offering in London raised more than $8 billion, and Partypoker.com,the world's busiest virtual card room, accounts for 92 percent of Partygaming's revenues.



Several factors make online poker appealing to players: speed, convenience, weak competition and no need to tip dealers. Some sites provide hand histories that help us to track tendencies and to plug leaks in our game, and to profit from those in our opponents'. Even more important is the absence of physical tells. Picking up on betting patterns becomes more important than raw psychological acumen.



There's no intimidating eye contact here, though comments in the chat box can be withering. About half of all online players are women, some of whom want to avoid an aggressive casino environment. Novices of either sex can compete for pennies, or only for play money. The big sites offer the opportunity to choose among thousands of games, from play-money to six-figure stakes. With action available around the clock, there's no need to get on an airplane, drive to a casino or even put on a clean shirt. Blogs and chat rooms teem with allegations of dealing that is programmed to give multiple players good hands, thereby increasing the bets and the rake, and of sites rigging the deal to prevent new players from losing so quickly that they become discouraged. No hard evidence, however, has been produced to support such claims.



I would also point out that the 5-percent rake most sites take is more than sufficiently juicy, and that nonrandom dealing would slaughter the platinum goose. Those who claim to see far more bad beats online should remember that virtual games deal at least twice as many hands an hour – and the more hands you play, the more bad beats you will suffer. Sophisticated software also lets the sites check hand histories and IP addresses for evidence of player collusion. Another thing I like is that the world can seem very tiny, and timeless, while you're playing online. My opponents this morning on Pokerstars.com include Birdwings from Lebanon, Alexia18 from Dusseldorf, Dedor from Tel Aviv and Wasp from County Derry.



As we chat and compete, they could be sitting in front of a desktop computer at home or at a laptop three gates down the concourse from me. Next week two or more of us might be sitting elbow to elbow at the live event held by Pokerstars.com in the Bahamas, a tournament played mostly by people who won their $8,000 seats on the site. The prize money will be deposited in Pokerstars accounts, then recirculate back into – where? A lot of folks besides federal prosecutors wonder exactly where all this virtual action takes place. In a cable submerged 619 miles east-northeast of Paradise Island? Well, in the case of Partypoker.com, the home office is in Gibraltar, the hardware is in Kahnawake, a Mohawk reservation in Canada, and the marketing office is in London, though most staff members work in a call center in Hyderabad, India. The players are in 24 time zones across six continents and on scores of ships at sea. As millions more virtual hands are dealt this New Year's Eve, poker seems poised to become the world's game. The World Series has already crowned champions from Australia, China, Iran, Ireland, Spain and Vietnam. While the Justice Department figures out how to proceed, our national pastime, born during Thomas Jefferson's presidency, remains a sturdy crucible in which folks from all over the planet find themselves welcome contenders.