The Internet Poker Ban

October 4, 2006 Posted by Tyler Cruz

Today I cover:

  • The Internet Poker Ban
  • PublisherForums
  • Text Links
  • Blog Updates

The Internet Poker Ban

“It is dangerous to be right when the government is wrong” — Voltaire

The following paragraph, borrowed from an official e-mail statement sent to me by PokerAffiliate.com, sums up the poker ban well:

On 30 September 2006 the US Congress passed the SAFE Port Act which also contained certain provisions known as the Unlawful Internet Gambling Enforcement Act of 2006 (the Act) that will affect the processing of payments between US customers and online gaming companies, including PokerRoom.com and the other PokerAffiliate.com brands. The legislation is expected to be signed into law by President Bush within the next two weeks.

I wasn’t planning on discussing this ban, as I didn’t think that most readers would be that interested in it, however many people have been commenting on my blog, PM’ing, IM’ing, and E-mailing me about it so I guess it is more interesting to others than I thought. Many people have been asking me what my thoughts are on this, and so here I go!

First off, I want to make sure that you understand that I know extremely little about the US political and legislative system, and that while I have a decent amount of knowledge and insight into the poker business, that my knowledge is still extremely limited.

That being said, I believe that the biggest threat from this ban is not the actual legal change, but the fear that it propagates. Scared investors are actually the biggest problem here, not the so-called “ban” itself. The Unlawful Internet Gambling Enforcement Act of 2006, as far as I can tell, targets the financial institutions. It basically makes it harder than it already is, for them to act in any conducive way in the transfer of funds to online gambling establishments.

Now, what many people may not already realize, is that internet poker is already illegal! It has been for a long time, this is just a wild guess, but I’m betting (oops, bad choice of word there…) that it was when the Wire act was updated to factor in the Internet. As a result, it was already near-impossible to deposit into online gambling sites with a credit card. The answer? Third-party monetary systems such as Neteller. Based offseas somewhere that I forget, Neteller, a payment system similar to PayPal, quickly solved the credit-card problem by acting as an intermediary.

The poker industry is huge, and they won’t simply stand down and let the US government walk all over them. There will be a way, I’m sure, that they find to stay alive. The question now is if the US government tries to somehow shut down Neteller… by somehow forbidding US banks to deal with them I guess. Although even if that occurs, I’m sure there will be other ways for users to fund themselves online.

That being said, there is no doubt that this hurts the gambling industry. However, it’s more the result of fear, scared investors pulling out, among other factors, than it is the actual law.

It’s a shame.

I knew about this bill many months ago, it had unsuccessfully tried to be heard on the floor of Congress several times before, but nobody cared about it (rightfully so!) enough to even vote on it. Then Senator Frist and the Republicans (Watch out, I may start to get a bit politcal and biased here!) watered down the legalities and wordings of the act, and attached it to the Port bill! Tell me, please, what on earth does the Unlawful Internet Gambling Enforcement Act of 2006 have to do with port security?

Other senators objected to this absurd attachment, but there was nothing they could do. One female senator proclaimed how moronic this was, but that she had to vote for it anyway… how could she vote down the port bill act? From what I’ve read, many people say that this move was purely political strategy by the republicans for the upcoming election.

Anyhow, I’ll leave that as it is and get to how this affects me. Obviously this is not a good thing and definitely hurts me. I’m a realist, but I also think optimistically when situations call for it, like now. Now is the time to not panic. However, many people jump the gun and say uninformed things such as “Haha, now what? You’re going to be broke”. I have no doubt that my income will probably drop as a result of this, but I don’t believe it will “bankrupt” me as a few people have so elegantly put it.

Actually, it’s quite the contrary. This week I’ve been negotiating a fairly large campaign with a new poker start-up company based in Canada. He has a very large budget and plans on renewing and really working with us. He’s a young entrepreneur as well, and has made his fortune in another market, not internet-related. I’m currently working on a proposal with him where I’d get some seed money, around $10,000 or so, to reignite Replayer, in exchange for sole, exclusive advertising on it.

So, while this ‘ban’ definitely hurts the industry and will no doubt hurt me as well, it is not the end of the world, and I believe the people that are running around scared, like chickens with their heads cut off, aren’t sitting down and thinking things through calmly. In fact, this month could be my highest grossing month ever…

PublisherForums

And now, it’s time to spam! I’ve been rather preoccupied with buying a condo and tending to e-mails that I haven’t been able to put a lot of time into PublisherForums.com. I won’t lie – the site isn’t huge. There aren’t hundreds of new threads put up every day, but the site does have life. And while my marketing efforts for it have been minimal at best, it still spawns life; with over 200 registered members, there’s usually one or two people on at any given time, and it receives over a couple thousand uniques a week.

However, it seems like a lot of people visit it waiting for others to post. I’d encourange and request that you don’t do the same, and help get it going again by posting! While it’s not the busiest of webmaster forums, one thing I’ve been able to make sure it has lived up to, is that the quality and level of discussion has still been friendly, polite, and professional.

So, help me out! If you read my blog regularly and enjoy it, help pay me back by registering and posting on PublisherForums.com. I’ll really appreciate it and remember it when I’m a billionaire… (Would colour would you like your Porche? Heh.. heh…)

Text Links

Ack! Not more ads, Tyler!

I’ve updated my advertise page on this blog, TylerCruz.com.

Aside from updating the Alexa, traffic, and PR (Keeps jumping from 2 and 4 on my toolbar, but will be a 4), I’ve also added Text Links.

They are set at only $10 a month, and with my targetted traffic of 900 uniques a day, growing PR and Alexa, and being sitewide, I think that it’s a very fair price.

Anyhow, let’s see if I get any takers :)

Blog Updates

1. Login/Logout Now on Right Side

Since I made the change a few days ago requiring visitors to register and sign-in before being able to comment, I was notified by several people that it was confusing as to how to register or sign-in. The link was located as a small link in the footer, but I’ve now also added it to the bottom of the right side.

2. Advertise page updated

I’ve updated the advertise page’s Alexa, traffic, and PR (Keeps jumping from 2 and 4 on my toolbar, but will be a 4) information. I’ve also added Text Links.

That’s all for now!

Good luck and good earnings!

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Posted: October 4th, 2006 under Articles  

14 Responses to “The Internet Poker Ban”

  1. [...] The Internet Poker BanThe Unlawful Internet Gambling Enforcement Act of 2006, as far as I can tell, … Now, what many people may not already realize, is that internet poker is already … that it was when the Wire act was updated to factor in the Internet. … [...]

  2. tke71709 says:

    Tyler, I stated that this could very easily bankrupt you, not that it would certainly bankrupt you.

    And I stand by my statement, just as I stand by my statement about not keeping your money in Paypal to you almost a year before it almost got frozen a few entries back.

    Time will tell what will happen, I certainly hope that you weather the storm, just as I was glad that you managed to get your money back from Paypal but as you yourself have stated, you’re coasting off essentially one site. You put very little work into your other sites, you’re not taking advantage of the situation that you are in to diversify your sites or to get a strong education as a back-up plan.

    In a lot of ways you’re like a superb college athlete with everything going for him but only one knee injury away from wasting the opportunities that your skills have presented to you.

    Diversify your sites, use this time where you have essentially a ton of free time and a somewhat secure income to get a post-secondary education that will help you whether the 2.0 bubble bursts or keeps going strong.

    Simply put, having all your eggs in one basket, and little in the way of a backup plan is not smart business. Especially in a business as fickle as web publishing.

  3. fumbler says:

    Been reading your blog since you started it and I’m glad you decided to keep up with it Tyler. Finally registered so I can start posting comments on it!

    I should hope anyone making a living off the Internet understands they can wake up the next morning broke. You need to understand the risks involved in any business you undertake. I think Tyler has weighed his risks and obviously still feels it’s worth the effort. Businesses fail. It’s part of business. You learn and move on.

    Maybe a bit late for adding regarding the text/video: I like the more conciseness of the text but also like that I can keep working and just listen to your videos. oh, and i also like seeing video’s of “home” – I grew up on Vancouver Island myself only slightly north in Parksville.

  4. PocketRockets says:

    While I agree with other posters that PokerForums will likely see a major dip in ad revenues due to this US bill, I’m not sure why the word “bankruptcy” was brought up. The websites are profitable with no debt so how would it be even possible for bankruptcy? They just won’t make as much as before.

    Tyler, you are correct that this is all about targeting the financial instituitions. Technically, the new law does not make it illegal to play poker on the Internet. Instead, it makes it illegal for any bank, credit card company or other financial intermediary to process transfers to or from an internet gaming site.

    Actually, internet gambling at the US Federal level has never been clarified as illegal. Only a handful of states actually have written laws stating internet gambling is not legal.

    You asked, “what on earth does the Unlawful Internet Gambling Enforcement Act of 2006 have to do with port security?” Well, this is all tied-in with 9/11 — this bill is partially about international money-laundering by potential terrorists. Brick-n-mortar casinos have to follow strict federal policies aimed to prevent money laundering by terrorists and this is a lot easier to police than online activity. Terrorist groups, for instance, frequently resort to drug trafficking, robbery and extortion to raise their funds and internet gambling has recently over the years been another major threat for a potential vehicle to laundering. I don’t think this is the sole reason for the bill (obviously political BS and the morality card are involved).

    Anyway you look at it, this is a huge blow to the poker industry. With three of the largest Internet poker sites — PokerStars, Party Poker and Pacific Poker will be withdrawing from the U.S. market it’s going have a major impact on ad revenues. These companies helped fuel the poker craze in the US. I read that before Chris Moneymaker won the World Series of Poker in ’03, the average number of contestants was only 181. This year there were 8,773 players! and 80 percent of them won their seats by entering online tournaments.

    It will be interesting to see the details of this bill….

  5. [...] Auf den großen Pokerseiten ist es seither für US-Bürger nicht mehr möglich um echtes Geld zu spielen – sie dürfen nur noch um Spielgeld zocken. Viele amerikanische Pokerseiten ärgern sich darüber, Tyler Cruz bringts auf den Punkt: es ist der Internet Poker Ban [...]

  6. tke71709 says:


    I’m not sure why the word “bankruptcy” was brought up.

    Simple, Tyler makes almost all of his income from his poker site.

    If that income dries up, Tyler still has to pay his rent (I stopped watching the videos long ago so I’m assuming that he hasn’t actually purchased a home yet), his car payments, etc…

    If his poker income dries up then Tyler will have 10k a year to live off (using the income stated by Tyler for his other sites).

    Keep in mind that Tyler has no source of income outside the Internet.

    If Income

  7. PocketRockets says:

    ….”If his poker income dries up then Tyler will have 10k a year to live of of…….”

    Yeah, so what? He builds up revenues from another site or if he has to, gets a job. He isn’t going to go bankrupt unless all his sites stop earning $$ and he then spends more than he makes and does nothing about it.

  8. Joe Cracker says:

    Whats up stupid internet entrepreneur losers, Its Joe Cracker again

    ENOUGH WITH THE DAMN ”ADVERTISE HERE ” CRAP tyyyyyleeeer. If we want to advertise on your blog we will let you know. Its not like you dont make enough money that you need advertising so stop being a queer by constantly peddling your overpriced advertising space.

    I would like to see all these stupid payment systems close down. Why is it a security threat? Ever hear of money laundering? You think all that money being sent back and forth is for poker? I don’ think so…I live in the states not in Canada where ragheads are trying to kill us. For you it isn’t a secuity threat but for us it is.

    Publisherforums is crap. PLease do yourself a favor and scrap it. Delete it from your servers and admit you failed on that project.

    And while you may be enjoying fat affiliate sums now are your advertisers seeing a positive ROI? Hmmmmmmmmmm? ONce morning they could all put out and say

    ‘Dear tyler,

    we have advertised on your poker forum for a month and we havn’t made as much sales as to justify your rates. Effective as of xx,xx,xxx we will terminate our contract. We have also noticed slowing sales due to the US online poker ban.”

    Good luck gonna need it

    CRACKER

  9. Wes says:

    Tyler,

    Keep your head up and continue plugging along. Your hard work has paid off so far. Keep diversifying your business!

  10. [...] One of your sites is a Poker Forum, you must be concerned by the recent developments in the US gambing laws. Are you having to make changes or launch new sites in order to keep current/future income steady? I write my views on the ‘ban’ here which is a good summary on my views about it. It’s definitely hurting though and going to continue to hurt. I have a lot of collegues who it has hurt badly as well. In fact, I had made a phone call to CasinoPartners this afternoon, which I affiliate TitanPoker with, and had found out that Bruce, my affiliate manager, was just laid off yesterday… it’s an unfortunate and complete and utter disgrace, this bill. But I’m certainly not dead. I’m a fighter and today I had about 5 e-mails from inquisitive new advertisers. Two of them already paid me today. [...]

  11. [...] It seems as if Tyler Cruz — a young blogger of SitePoint Forums fame — is about to have this same problem. However, it doesn’t look to me as if he’s taking steps to correct it. Yes, he’s coming out with these small new websites, but really nothing of much consequence that’s going to generate enough profit for him if the poker industry slumps, which it looks like it will. It’s one of the better examples that I can point out, because Tyler is even looking to finance a house, but really only has one website to back it up. He seems to be aware of this issue, but I think he’s taking it too lightly. I warn Tyler Cruz and everyone else out there that does this for a living like me that you better get working on other projects if you wish to survive for more than a few years. I’ll be brutally honest when I say that I find it almost laughable when someone believes themselves to be an entrepreneur when they get lucky with success on one simple business — unless that business is of remarkable size. [...]

  12. [...] The Disadvantages of Having Fewer, Bigger Sites. You become reliant on one, or few sources of income. What happens if one of those sites ‘dies’? Anything can happen, forum members could become disinterested, or a change in law could affect your revenue income – example. Now I don’t know how much Tyler has suffered since that ban was enforced, or even if he did at all, but it just goes to show – anything can happen. The one thing I do actually worry about as I run just a few sites is what if something should happen to one of them…I could lose a considerable chunk of my monthly profit. Fingers crossed ey… [...]

  13. [...] The good: Tyler is definitely doing well. He keeps his daily $ average up on his site and blogs often about his site sales, site flipping, and and domain brokering. He must be doing something right and for that reason it’s worth keeping up with his feed (its in my RSS reader). I heard about Tyler sometime last year on the SitePoint forums and browsed his sites then. There’s an interesting mix, and the most notable thing is that he’s managed to build quite large communities. He also put together a short video which, while cheesy, was also inspirational. The blog is a chronicle of his life and important events in it, so if you want to follow along and see how a ‘netpreneur lives, it can be very entertaining. In terms of usefulness, there are some worthy articles, such as this one on the Internet Poker Ban and this one on Private Ads: Building Strong Advertiser Relationships. [...]

  14. [...] has seven other websites from which he earns his money, from poker to cookery. His post about the Internet Poker Ban was [...]

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