2012 Poker Year In Review

Scouring the news archives and poker headlines from 2012, the conversation was punctuated with significant developments on and off the felt.

Records were set for most World Series bracelets, all-time tournament earnings and, more than ever, poker, and its regulation, was a topic of conversation for politicians.

Card Player presents a look back at the important story lines that stood out during one of the game’s most intriguing years ever.

Federal Bill Flops

For most of the year, the poker community anxiously awaited some movement and clarification on if, and how, online poker would be addressed at the federal level.

While talk of such legislation has bounced around for the better part of five years, many insiders believed that 2012 was the year that the game we all love would be licensed and regulated.

First, with the government running trillion-dollar deficits, it’s desperately looking for new tax revenue. Second, with states like Nevada passing local laws to fire up online poker, it’s believed the federal government would prefer a comprehensive solution rather than a patchwork of state laws. Large gaming companies agree, as becoming licensed in a multitude of jurisdictions all subject to different rules is difficult. Third, this August, when a federal judge overturned the conviction of a New York man for running a poker game, it marked the first time a federal court had ever ruled that poker was a skill game.

President and CEO of the American Gaming Association (AGA), Frank Fahrenkopf, Jr. made it clear that 2012 would be an important year for online gaming. The AGA’s
members include the largest gaming companies in the U.S. It kicked off the year by issuing a report that stated “A key legislative priority in 2012 will be the AGA’s continued support for legislation to allow states to license and regulate online poker so Americans who play can do so safely with responsible, law-abiding operators.”

Despite this push, nothing was accomplished in 2012 to allow Americans to play poker in the comfort of their homes. Efforts led by Nevada Sen. Harry Reid fizzled out in December after Reid’s office told the press “this (internet poker) bill for this year is dead.”

*States Debate Pile of Poker Bills *

The sheer volume of pro-poker legislation kicked around state capitol buildings this year was astounding as a host of states continued to push the next frontier of licensed and regulated gaming.

California, Florida, Illinois, New Jersey, Colorado, Mississippi, Hawaii, and Iowa all introduced proposals to launch state-run online gambling.

A late 2011 Department of Justice legal opinion kick started this flurry of activity. The opinion clarified the government position on the 1961 Wire Act law stating that it only applied to sports betting. This cleared the way for states to offer lottery services online and plan for more robust e-gaming offerings.

Here is a look at what some of the more significant states did or did not do in 2012:

Nevada legalized web poker in June 2011 and adopted rules for the new industry in December 2011. This past year, Nevada regulators poured over applications of 16 companies that sought to be involved in the business. Applications were processed, software was tested and approvals were granted. But online poker was not yet flipped on for the 2.7 million state residents and four million monthly Silver State visitors. Iconic names like Golden Nugget, Stratosphere, MGM and Caesars all are still working on products.

Since at least 2011, South Point Casino has publicly stated it wanted to operate Nevada’s first real-money Internet poker site. The company kept pace with that goal by snagging the first license to operate intrastate web poker in United States gambling history.

Despite its strides, there is no official timetable for when South Point or any other Nevada poker site could go online, but most expect it to happen sometime in the first quarter of 2013. South Point had previously targeted Oct. 2012 as a launch date.

California is perhaps the only state capable of sustaining a profitable intrastate online poker industry thanks to its 37 million residents and economy that is larger than that of all but eight other countries in the world.

It has been trying to legalize online poker since 2007 and can chalk up another failed attempt this year.

A bill introduced in early 2012 never made it out of committee. The state’s brick-and-mortar tribal casinos, huge players that took in $6.78 billion in 2010, accounting for 25 percent of the U.S. Indian gaming market, were unhappy with the bill. This rift foreshadows the potential issues with any federal online gaming bill. More than 450 Indian gaming operations are run in the U.S. by 240 tribes in 28 states. And everyone wants a piece of the revenue pie.

Illinois has seen its budget deficit more than double in the past five years and is looking to plug a more than $40 billion hole with gambling expansion.

The state debated a bill for months that would have created an online poker platform developed within the state lottery that could be licensed out to 16 casinos and racetracks in the state. Illinois would have received up to $105 million in licensing fees from the affiliates and a piece of the revenue generated.

The bill stalled but Illinois, along with Georgia, began selling lottery tickets online. Back in 2009, New York and Illinois asked the DOJ if selling lottery tickets online violated the federal Wire Act of 1961. It took more than two years but the states finally got an answer in late 2011 when the feds commented that “proposed lotteries are not within the prohibition of the Wire Act.”

A month later, the DOJ went even further in limiting the scope of the Wire Act reach when it released an opinion that stated “interstate transmissions of wire communications that do not relate to a ‘sporting event of contest’ fall outside the reach of the Wire Act.” Many were quick to seize upon this, claiming the ruling made it black and white that lotto and online poker did not violate the Wire Act.

In order to generate even greater revenues, lotteries, with Illinois leading the charge, are eyeing casino gambling and online poker. So don’t be surprised if, in the next few years, your state Lotto is spreading sit and go’s.

Delaware passed a bill in June that would legalize online table games, including poker, and expand other forms of gambling in the state. Dubbed the Delaware Gaming Competitiveness Act of 2012, it authorized Internet gaming under the Delaware Lottery. The state is looking to partner with neighboring states to have a player pool large enough to make the investment worthwhile.

Not fearing any pushback from Washington D.C., expect the state-by-state e-gambling expansion story to continue developing in 2013.

State Gambling Expansion Leads to New Poker Powerhouses

In 2009, referendums to expand gambling passed in both Pennsylvania and Ohio. Three years later, the two states both made big noise.

Ohio is the state that expanded gambling the most in 2012. In May, it opened its first casino, The Horseshoe Casino Cleveland. Part-owned by Caesars Entertainment Corporation, the $350 million property hosts a World Series of Poker branded poker room with 30 tables. Over the first six months in operation, 2.6 million patrons visited the property. Casinos soon followed in Columbus and Toledo. Next year, on March 4, the Horseshoe Casino Cincinnati will open its doors for business.

Pennsylvania found itself in the spotlight by becoming the state to collect the largest amount of gambling tax revenue in the nation. Of the 22 states that collect casino taxes, Pennsylvania now leads the way, taking in $1.456 billion compared to around $865 million for Nevada. Pennsylvania’s 55 percent table games tax and 16 percent slot machine rate, compared to Nevada’s 7.75 percent, made that possible. The state now has more than 200 poker tables spread amongst 10 properties.

The most talked about casino legislation of 2012 took place in Maryland. On election night, the state residents voted to add a sixth casino, expand the number and type of table games (blackjack, roulette and craps) for existing casinos, and begin 24-hour operations throughout the state. The new casino has been approved for Prince George’s County, which sits in Washington D.C.’s backyard. MGM Resorts International, which lobbied hard for the measure, is the current front-runner for this gaming license and has already unveiled plans for an $800 million resort.

Other states plugged ahead at trying to add casinos. Two ballot measures to bring casinos in Arkansas were debated but ultimately failed. Ironically, you still can’t currently play Texas hold’em in the state it’s named after. But Rodney Ellis (D-Houston) made some waves this year saying that he hopes to change the law and bring legalized casinos to the Lone Star State.

Ellis filed a bill for the 2013 legislative session that would give voters the power to amend the state constitution to allow for casinos. Estimates say Texas residents gamble away more than $2.5 billion each year at casinos in neighboring states and that Texas casinos would create more than 75,000 jobs to support what could amount to a $8.5 billion per year industry.

Not all states are looking to liberalize betting. Utah’s governor signed a 2012 bill where any person who gambles on the Internet in the state is guilty of a misdemeanor that carries a potential six months jail term and a $1,000 fine. Utah’s online gaming disdain is so strong, the state’s governor sent a letter to two of the most powerful members of Congress to insist that online gaming not be legalized nationwide.

Show Us the Money…

U.S. Players Still Stiffed Full Tilt Money

Full Tilt, shut down April 2011 and labeled a “ponzi scheme” by the United States Department of Justice (DOJ), imploded thanks to poor management and financial shenanigans. It was a rollercoaster ride of a year for the one-time second largest online poker site in the world, with the resurrection of the company
failing to provide reimbursement of millions owed to U.S. citizens who still sit empty handed.

First, a French investment group, Groupe Bernard Tapie, sought to purchase the company. During its due

diligence, it reported that a group of notable poker players owed Full Tilt about $18 million collectively. Phil Ivey, Layne Flack, David Benyamine, Erick Lindgren, Barry Greenstein, Mike Matusow and others had used the site as their own personal banks. This disclosure was one of many obstacles that casued the deal to implode.
Eventually, PokerStars purchased the assets of the site. It made a first payment of $225 million, the first installment of a $731 million settlement with the DOJ, in August 2012.

The former Full Tilt CEO Ray Bitar surrendered to the FBI in early July as the WSOP was in full force. He faces more than a decade in prison.

Meanwhile, the DOJ has still provided no information on when the 1.3 million U.S. players that had money on the site would be repaid. PokerStars is responsible for cutting $184 million worth of checks for Full Tilt account balances owed to players outside of the U.S. But the DOJ chose to handle repayments to American players itself.

To facilitate the government payment, the DOJ released an employment opportunity notice on its website August 13th to start this process. The position was for a third-party “claims administrator” to repay all Americans with money stuck in Full Tilt’s now locked cashier. Applications were due by August 31st.

Nearly four months later, US players were still in the dark. And, as a further slap in the face to Americans, the Full Tilt site was re-launched to players outside the U.S. on November 6.

Federal Judge Rules. Poker Fans Cheer.

New Yorker Lawrence DiCristina was arrested last year, charged and convicted of running an illegal gambling business. His crime; running a poker game in a warehouse while taking a five percent rake. He faced up to 10 years in prison.

New York courts have long considered that poker contains a sufficient element of chance to constitute gambling. DiCristina was convicted of violating the Illegal Gambling Business Act (IGBA) of 1955, a federal law.

The jury’s verdict, however, didn’t sit well with federal judge Jack B. Weinstein, who overturned the conviction and ruled that poker is more of a game of skill than a game of chance. Weinstein stated that skill “had a statistically significant effect on the amount of money won or lost” after wading through a statistician’s report of 415 million poker hands.

This historic decision marks the first time that a federal court has ever ruled on whether or not poker constitutes a game of skill.

Epic. Fail
With the poker economy on shaky ground in a post-Black Friday world, players were looking for something to cheer about.

Many rested their hopes on the Epic Poker League, which promised to attract the best poker players in the game to tournaments that had juicy prize pools. The league created a ranking system that awarded membership, and exclusive access to its tournaments, to accomplished players. Epic bought expensive TV time to televise its elite tournament series.

The league’s business plan did not make much sense, however, and the company filed for bankruptcy during its inaugural season after running just three poker tournaments. It canceled its fourth tournament, along with a fifth, which promised a $1 million freeroll for the league’s top 27 performers.

The company managed to earn just $37,052 in income over a 14-month period while racking up nearly $8 million in liabilities. Five Epic Poker League officers, including poker pro Annie Duke and Executive Chairman Jeffrey Pollack, paid themselves handsomely (more than $1.1 million total) for their good work.

Nevada-based casino operator Pinnacle Entertainment bid for and won the assets of Federated Sports & Gaming, founder of the League, and Federated Heartland, the parent company of the Heartland Poker Tour, an asset that was purchased, but not even paid for, while Epic management was still writing rubber checks.

2012: A Historic Year For Tournament Poker

By Erik Fast

Poker has been around for hundreds of years, but it’s been 40 years since the World Series of Poker adopted the freezeout as its official format in 1972, facilitating the modern era of the game. 2012 saw a number of historic events take place, including the first ever $1 million buy-in and Phil Hellmuth’s furthering of his dominance at the WSOP. This year a total of twenty-seven tournaments awarded first place prizes of more than $1 million. Poker also continued to grow in popularity internationally, with Germany, Australia and Belarus all having players in contention for the Player of the Year title.

The tournament that has kicked off the big buy-in international circuit each year, the PokerStars Caribbean Adventure, returned in 2012 and saw a $1,000 satellite winner, John Dibella, defeat a 1,072 player field for the $1.77 million top prize. The following $25,000 high-roller event showed that the poker economy was still healthy after drawing 148 players, shipping just over $1.1 million to winner Lenoid Bilokur just days after high-stakes online cash game sensation Viktor “Isildur1” Blom captured the $100,000 buy-in high roller title for $1.25 million.

The action filled month of January continued in Australia at the Aussie Millions, where another $100,000 event, won by accomplished online high-stakes player Dan Smith, began one of the most prolific tournament poker win streaks since Card Player began its Player of the Year race. Smith continued his winning ways throughout the year, capturing five titles and three other final tables and earning more than $3.5 million in live tournaments throughout the year.

Winter transitioned into spring with a number of huge events taking place, including the 2012 World Poker Tour L.A. Poker Classic main event in February, won by the lone amateur at a table of young pros. Sean Jazayeri defeated David Sands heads-up to win nearly $1.4 million.

The PokerStars European Poker Tour Grand Final in Monte Carlo hosted a number of gigantic events, including the €100,000 Super High-Roller event, won by Justin Bonomo for €1.6 million, and the EPT Grand Final main event title which went to Mohsin Charania, along with nearly €1.35 million.

With summer approaching, the World Poker Tour closed out its 10th season with a bang at Bellagio with the $25,000 WPT Championship, won by Marvin Rettenmaier for nearly $1.2 million in May.

The World Series of Poker once again proved why it is the marquee poker series, with 61 events paying out more than $222 million in prize money. The long list of notable winners include Andy Bloch, Phil Hellmuth, Brian Hastings, Matt Matros, Andy Frankenberger, Joe Cassidy, Oleksii Kovalchuk, Allyn Jaffrey Shulman, David Baker, Vanessa Selbst and Nick Schulman. Michael Mizrachi became the first player to win the $50,000 Poker Player’s Championship twice, earning $1.4 million.

Gregory Merson battled it out with bracelet-winner Keith Lehr for the title in one of the largest events of the summer, the $10,000 six-max no-limit hold’em event. Merson topped a field of 474 to earn his first gold bracelet, the $1,136,197 top prize and big chunk of POY points. Days after that win, Merson entered the $10,000 WSOP main event along with 6,597 others, who one by one busted out until Merson once again was the last player standing with $8,527,982 and 3,300 POY points to his name, catapulting him into the lead in the POY standings.

For the first time in recent years, the WSOP main event didn’t award the largest first prize of the year, however. That honor went to the unprecedented $1 million buy-in Big One for One Drop held at the WSOP, drawing 48 entrants and awarding $18.3 million to eventual champion Antonio Esfandiari.

With fans of top-shelf tournament action at affordable buy-ins, the Card Player Poker Tour made its debut this year in August at the Choctaw Casino in Durant Oklahoma, blowing away every single guarantee. The $1,000 main event drew 800 players, and eventual champion Maxx Danksy walked away with a $152,008 payday. With numerous stops on the inaugural season coming up in 2013, the Card Player Poker Tour will surely be worth keeping an eye on.

As fall rolled around, much of the focus of the tournament world turned towards Europe for huge events like the EPT London festival, the EPT San Remo and the World Series of Poker Europe. This marked the second year that the WSOPE was being held in in Cannes, France, and the series was once again a huge success. The main event drew 420 entrants, including many of poker’s biggest names. But in this game, no name is more known than that of Phil Hellmuth, and the man know as the “Poker Brat” once again showed why by topping this event to win his record furthering 13th WSOP bracelet and more than $1.3 million. All told, Hellmuth had an incredible year with two bracelets won, two more major final tables and nearly $4.3 million in earnings.

As the year wound down, players continued to travel across the country and around the globe in search of the big score or possibly some more Player of the Year points.

The race, the most competitive in more than five years, came down to a late December showdown between Merson and Smith, only separated by a few points, as of press time. Check in next issue to see who emerged victorious.

The First-Ever Million Dollar Buy-in Poker Tournament

Poker tournament organizers and the game’s highest stakes players have been playing a game of “high roller” brinksmanship in recent years. In 2006 The Aussie Millions hosted the first $100,000 buy-in. Other events like the PokerStars Caribbean Adventure followed suit, so the Aussie Millions held a $250,000 buy-in in 2011. With a number of events taking place around that buy-in level, it seemed like only a matter of time until the proverbial ante was upped again.

At the 2012 WSOP, a capped field of 48 elite professionals and wealthy amateurs participated in the first-ever $1,000,000 buy-in poker tournament, the Big One for One Drop. Organized by Cirque du Soleil founder, philanthropist and high-stakes player Guy Laliberté, the event raised $5.3 million for charity while also smashing numerous records, including the honor of awarding the largest first prize in poker history: $18,346,673.

Given its gargantuan size and the interesting mix of top pros like Phil Ivey and Tom Dwan with businessmen like former Facebook executive Chamath Palihapitiya and hedge fund manager David Einhorn, the event was unsurprisingly electrifying and exciting to follow. At one point early on, Russian semi-professional player Mikhail Smirnov folded quad eights on a J 8 7 8 K board, putting his opponent John Morgan on either 10 9 for the straight flush or pocket jacks for an inferior full house, and deciding to make the fold face up, sparking the interest of the table and thousands of poker fans following at home.

In the end, Antonio Esfandiari topped a final table of businessmen and poker pros alike, defeating high-roller aficionado Sam Trickett heads-up to capture the prestigious title and the $18.3 million top prize, giving him a commanding lead in the all-time tournament earnings list with $23.1 million.

Women Wow at WSOP

In recent years, women have represented between two to four percent of the field in World Series of Poker events. While women are still distinctly a minority, that did not stop them from making a major impact on the 2012 WSOP.

Vanessa Selbst topped a tough field of 421 in the $2,500 10-game mix to become only the second woman to ever win two open-field WSOP events, with the first being Jennifer Harman. Vanessa also placed fourth in a $1,500 no-limit hold’em and finished 73rd in the main event.

Speaking of the $10,000 WSOP main event, of its 6,895 entrants, only 211 were women, meaning that roughly 3.2 percent of the tournament’s entrants were female. On the penultimate day of play, 78 players remained and four were women, including Selbst. Marcia Topp finished 71st for $106,056, while Elizabeth Hille and Gael Baumann both just fell short of the final table, finishing 11th and 10th respectively for $590,442 each.

Other big scores by women at the WSOP included Allyn Jaffrey Shulman winning the huge seniors no-limit hold’em championship, topping a field of 4,128 players, the runner-up finishes of Amanda Musumeci and Jack Glazier, and final table showings by Xuan Liu, Cherish Andrews, Patricia Baker, Caroline Hermesh as well as an elite eight finish in a heads-up shootout by Annette Obrestad. ♠

2012 By The Numbers

- The 2012 World Series of Poker attracted 74,766 entrants, the second most in the festival’s history, dipping only slightly (1.2 percent) below 2011’s record number of 75,672. The total prize pool year-to-year increased by 15.6 percent to $222,045,377.

- The WSOP main event drew 6,598 players in 2012, the third most in the event’s 43-year history. This built a prize pool of over $62 million, down from $64.5 million in 2011.

- Full Tilt Poker relaunched on Nov. 6, 2012 and instantly regained its spot as the second-highest trafficked online site behind PokerStars. Despite the return of Full Tilt, online poker traffic has decreased by 2 percent in 2012.

- Ray Bitar remains the only former member of Full Tilt Poker facing any
possible jail time. He could be hit with 145 years if convicted.

-2011 saw the first poker tournament with a buy-in of a quarter or million or higher, held at the Aussie Million and won by Erik Seidel. In 2012, a total of three of these $250,000 or higher buy-in events took place, including the first ever $1 million buy-in, the Big One for One Drop won by Antonio Esfandiari for $18.3 million, the largest first prize in poker history.

- A total of 588 poker rooms spread live poker in 2012, with 7,016 tables available for action. The Commerce Casino in Los Angeles remains the largest in the world with 160 tables.

- Former Full Tilt owner Howard Lederer spent the latter part of the year trying to repair his image, but he’s still on the hook for $42.5 million that the DOJ wants to get their hands on.

- The European Poker Tour’s ninth season (2012-2013) is scheduled to host eight festivals, down from 13 the previous season. Season 8 (2011-2012) saw 8,397 players build a season-long prize pool of €46,700,915, making it the third most attended season in the tour’s history.

- Greg Raymer won four titles on the Heartland Poker Tour in 2012, going from never having cashed in an HPT event to being the tour’s all-time winningest player in a four-month span.

- There have been efforts in multiple jurisdictions to push forth web poker legalization, but the number of states with legal web poker stands at just two. Nevada is a small state, but 16 casino firms have applied to be online poker operators. ♠