Online Poker Kings Get Cashed Out: Killing livelihoods and a $2.5 billion industry, the feds attack Internet gambling
March 4, 2012
When you’ve turned nothing into something once already, you tend to feel like you can do it again. There’s faith your luck will turn. Perhaps it’s delusion. But for a professional poker player, self-confidence is essential.
So it is for Walter Wright, who now finds himself in Costa Rica. He left his wife and two children behind to redeem their failing finances and faltering marriage by doing something that’s now illegal in the United States—playing poker online.
Wright’s life began to change in 2005, when he followed his then-girlfriend from New Orleans to Virginia, where she was beginning law school at Washington and Lee University. He had played strategy and role-playing video games as a kid in Houston and later began to obsess over chess. That’s when he noticed his chess buddies were becoming increasingly dedicated to online poker and raving about the returns. Wright became engrossed.
He started as most people do, playing what’s known the “cash game.” It’s simple poker—win by pushing your advantage when the cards are good and bluffing when they’re not. If you know the odds, bet wisely, and seek out tables with lesser players, within a year or two, you can be making a grand a week or more. Five to 10 times more.
Wright started at low-stakes Texas Hold’em with table limits of just 25 and 50 cents. The beauty of playing online is that he could work eight tables at once. It wasn’t the best of money. Pokerstars.com was taking its own cut from the pots, generally capped at $2 to $3 per pot. But as a volume player, he also received rewards points redeemable for things such as Amazon gift certificates, which he used to buy food in bulk.
“I was grinding my face off,” Wright recalls.
As Wright honed his feel for the odds and what his opponents were holding, he moved up to sit-’n’-go games, which are essentially small-scale tournaments that can be finished in an hour. It took time, but he began to see more money than he had ever witnessed as a waiter in New Orleans.
Wright made $17,000 that first year and quit his job. He made $28,000 the next and $55,000 the year after.
Four years ago, when his wife got a job in the Las Vegas public defender’s office, the Wrights shipped off to Nevada. Wright dabbled in casino poker, where the stakes are higher. But it also required a bigger bankroll and presenting wider swings of fortune. He wasn’t ready.
“I made some money to, like, get some new tires on the car,” Wright says. “Make some money and pay a bill. . . . I was getting a little frustrated with that.”
That’s when he discovered multi-table tournaments online. They’re like sit-’n’-gos but feature as many as 200,000 participants in a single tourney—and much bigger pots.
It was easier than playing head-to-head in cash games, since the competition was generally worse. Wright’s strategy was to play dozens of tournaments a night—primarily on PokerStars—move conservatively through the early rounds as the lesser players fell away, and then amp his aggressiveness as the field whittled down.
It was still a grinding way to make a living, sometimes requiring Wright to stare at a computer for 24 hours straight. But he’d spent his teens pulling World of Warcraft all-nighters. And now, instead of making bank with tiny pot after tiny pot, he could bring home as much as $15,000 in a single session.
The first year of online tournaments brought in $100,000. A year later, Wright’s earnings had doubled, thanks to more than $100,000 he won by reaching the final table in the seventh World Series of Poker event in the summer of 2009.
But the money was coming a bit too easily. “We never really learned to manage money because nobody in our family has ever had any,” Wright says. “So we didn’t manage it well. . . . My mind-set became: ‘How much money do you need? I’ll make more.’ Rather than ‘We need to cut down on expenses,’ it was ‘Don’t worry. I’ll shoot for this goal.’”
Wright found himself retreating more and more into the casinos, especially when he and his wife would fight. He was becoming a classic workaholic, and he didn’t enjoy the soul-sapping casino atmosphere. He was equally worried about the effect of Las Vegas on their kids.
Last year, Wright convinced his wife to move to Asheville, North Carolina, to be closer to her parents. The plan was for her to take the year off, care for their newborn daughter, and study for the North Carolina bar exam. Wright would support them by playing online.
Most of their bank account was consumed by the move, but Wright had few worries. Why should he? He could always make more.
They moved April 1. Two weeks later, the federal government took Wright’s job.
In the poker world, April 15 is known as Black Friday. That’s the day the U.S. Department of Justice seized the assets and shut down the three biggest companies serving the American market—PokerStars, Full Tilt Poker, and Absolute Poker (which also operated Ultimate Bet)—charging them with bank fraud, money laundering, and illegal gambling.
Wright was luckier than most. Only a few thousand dollars in his PokerStars account were frozen by the feds. Others saw tens of thousands confiscated in the raids.
But Wright was now stuck in North Carolina, out of a job, and living with his in-laws, with no way to provide for a family of four. Their financial troubles accelerated. When the first opportunity came for his wife to take the bar, they didn’t have the money to pay for the test…
What Russia taught Syria: When you destroy a city, make sure no one- not even the story- gets out alive.
March 4, 2012
It was a star-filled night in Chechnya’s besieged capital of Grozny. The snow crunched under my feet as I walked with the Chechen rebel commander away from the warmth of our safe house. When we entered a bombed-out neighborhood 15 minutes away, I put the battery in my Iridium satellite phone and waited for the glowing screen to signal that I had locked on to the satellites.
I made my call. It was short. Then the commander made a call; he quickly hung up and handed me back the phone. “Enough,” he said, motioning for me to remove the battery.
As we walked briskly back to the safe house, it was exactly 10 minutes before the cascade of double wa-whumps announced the Grad rocket batteries pounding the vacant neighborhood we had just left.
It was December 1999, and the Russian assault on Grozny was unfolding in all its gruesome detail. After the dissolution of so much of the former Soviet empire, Chechnya was one country that the newly minted prime minister, Vladimir Putin, refused to let go of. His boss, Boris Yeltsin, and the Russian army had been defeated and then humiliated in the media by Chechen forces in the first war. Five years later, Russia was back. And Putin’s new strategy was unbending: silence, encircle, pulverize, and “cleanse.” It was a combination of brutal tactics — a Stalinist purge of fighting-age males plus Orwellian propaganda that fed Russians a narrative wherein Chechen freedom fighters were transformed into Islamist mercenaries and terrorists. More than 200,000 civilians were to die in this war, the echoes of which continue to this day.
This time, journalists were specifically targeted to prevent sympathetic or embarrassing reports from escaping the killing zone. As such, you can’t find a lot of stories about the second Chechen war. One of the few and best accounts was written by Marie Colvin, who described her terrifying escape from Grozny for the Sunday Times. Last month, Colvin thought she could roll the dice and enter the besieged Syrian city of Homs to defy yet another brutal war of oppression. This time she lost.
It’s impossible to know whether Syrian President Bashar al-Assad — a longtime ally of Russia — studied the success of the last Chechen war before launching his own assault on the restive city of Homs. However, his Russian military advisors surely know the tactics well. The crackdown in Homs carries a grim echo of Grozny, both in its use of signals intelligence to track down and silence the regime’s enemies and in its bloody determination to obliterate any opposition, including Western journalists.
Assad’s ability to lethally target journalists using satellite-phone uplinks could well have cost Colvin her life. Multiple reports have suggested that Syrian forces used phone signals to pinpoint her location and then launched a rocket barrage that resulted in her death on Feb. 22, along with that of French photographer Remi Ochlik and multiple Syrian civilians.
The use of satellite and cellular transmissions to determine a subject’s location was relatively new a decade ago, when I was in Grozny. Tracking phone transmissions to hunt down targets began in earnest with a covert unit of U.S. intelligence officers from the National Security Agency (NSA), CIA, Navy, Air Force, and special operations called “The Activity.” This snooping unit was also called the Army of Northern Virginia, Grey Fox, and even Task Force Orange. We see much of this technology used to inform modern drone and U.S. Joint Special Operations Command strikes. My decade covering U.S. spec ops, intelligence gathering, and their contractors highlighted the impressive ability of various countries to monitor, locate, network, and act on what is called SIGINT, or signals intelligence.
The Russians have their own version of this capability, which fell under the command of the Federal Agency of Government Communications and Information, now part of the Federal Protective Service. In the United States, it would be equivalent to the NSA and FBI combined, and the agency provides sophisticated eavesdropping support to Russia’s military, intelligence, and counterterrorism units — and to Russia’s allies, including Syria.
Russia has spent a long time perfecting these techniques. On April 21, 1996, Chechnya’s breakaway president, Dzhokhar Dudayev, was speaking on a satellite phone with Russian envoy Konstantin Borovoi about setting peace talks with Yeltsin. During the phone call, he was killed by a signal-guided missile fired from a Russian jet fighter. The warplane had received Dudayev’s coordinates from a Russian ELINT (electronic intelligence) plane that had picked up and locked on to the signal emitted by the satellite phone. It was Russian deception and brutality at its finest.
It should have been clear even back then that there was a benefit and a distinct penalty to modern communications on the battlefield.
Flash forward to Syria today. The opposition Free Syrian Army is officially run by a former air force colonel who commands a barely organized group of army defectors supported by energetic youth. They rely almost entirely on cell-phone service, satellite phones, the Internet, and social media to organize and communicate. Early in February, according to a Fox News report, Qatar provided 3,000 satellite phones, which the Syrian rebels have used to upload numerous impactful videos and stories.
These past few weeks, under a barrage of mortar, tank, and artillery shells, their plaintive calls for help from inside the besieged Baba Amr neighborhood of Homs sparked international outrage. But without Western journalists filing for newspapers and television outlets, these videos — mostly shaky, low-resolution footage of corpses and artillery strikes — wouldn’t have had the impact they deserve…
Last summer I traveled to Belarus on assignment for The Virginia Quarterly Review. It was the most bizarre reporting trip I had ever made. Following a series of misadventures, during which my passport mysteriously went missing, I was apprehended by operatives from the KGB—as the security services are still called in that part of the world—and after a grueling interrogation, locked up in solitary confinement. Publicly, the reason behind my detention was simple enough: verification of identity. That could have happened in the United States, or about anywhere else. During a routine immigration check, a tourist fails to provide a valid document and is detained until replacements are issued. On the record, I was just unlucky. On the record, the Republic of Belarus is a democratic state in Eastern Europe, where people are arrested only on strictly legal grounds.
Scratch the surface, though, and the ground gets muddy. I was not really a tourist—I was a Bulgarian-born journalist, writing for US media, who entered the country on a tourist visa. To be considered a journalist in Belarus, one has to receive special accreditation from the Ministry of Foreign Affairs—a process I had forgone, having heard of numerous colleagues who had recently been denied entry. Hoping to avoid confrontation with Belarusian authorities and work under their radar, I had also chosen a topic that to me seemed safe enough: tractors. Minsk Tractor Works, as the country’s biggest manufacturer is called, employs 30,000 people and holds 10 percent of the global wheeled-tractor market. Tractors are the Belarusian version of Cuban cigars or Saudi Arabian oil. My plan—slightly ludicrous in retrospect—was to write a feature about the current state of Belarus, not by confronting politics directly, but by looking at the machine industry and its workers. After all, the best stories are always written from the bottom up. The problem was that everything is politics in Belarus, tractors included. When the KGB interrogated me, they didn’t seem concerned about my missing passport. But they had many questions about my work as a reporter, which they were obviously aware of. What was I doing in Belarus? Why was I writing about heavy industry? Why didn’t I have state-sanctioned accreditation? What was my political stance? Why was I working for western media?
Five days later, I was released from my jail cell and taken to the airport in an unmarked van. For my transgressions, the verdict was deportation with a three-year ban on returning “in the interest of public order.” I had never considered myself a threat to anything, least of all public order, but they had different ideas. In the authorities’ eyes, every journalist working independently, beyond the gaze of the state, was already suspicious and quite possibly part of a conspiracy to bring down the government.
In truth, the KBG did me a favor. I had chosen to enter as a tourist to get a more unobstructed view of Belarus, and they inadvertently provided it. There is no better way to get acquainted with the horizon of a police state than from the inside of a jail cell. I wasn’t a criminal or a dissident or any kind of hero—I was just one of the scores of journalists, domestic and foreign, who have been detained on perfectly legal charges by the regime of Alexander Lukashenko. The law, after all, is for everyone—it’s just that in Belarus journalists happen to misbehave more often.
The difficulty of talking about censorship and freedom of the press in Belarus is precisely this: Formally, the press is free, and there is no censorship in the traditional sense of the word. There’s no secret army of scissored clerks poring over unpublished articles. The country’s constitution guarantees freedom of thought, belief, and expression, while a law on mass media calls for equality, diversity of views, and respect for human rights. All the right buzzwords are there. According to official statistics, there are 674 newspapers and 665 magazines, two-thirds of them private. There are 163 radio stations and 78 TV stations; more than a hundred international channels are available. This is neither China nor Iran. By all counts, Belarus must be a media paradise.
Except that it is the most repressive regime on the continent, and one that many have dubbed “Europe’s last dictatorship.” Reporters without Borders currently ranks Belarus 168 out of 179 countries; Freedom House gives the country a score of 93 on a scale from 10 (most free) to 99 (least free).
There are reasons for that. In December 2010, President Alexander Lukashenko won a fourth consecutive term—he had earlier changed the constitution to eliminate term limits—with a staggering 80 percent of the vote. When tens of thousands of people gathered in the streets and squares of Minsk to protest what they saw as a rigged election, they were brutally dispersed by Lukashenko’s security forces. More than 600 people were arrested, including seven of the presidential candidates and about 25 journalists. Most of the detained were sentenced to a couple of days in jail, but major political figures and notable journalists did not fare so well.
Right after the elections, Natalya Radina, editor of the radical opposition news site, Charter 97, was writing about the protests when officers broke through her office door. She spent a month and a half at the KGB’s main prison, sleeping in a cold, bedless cell, tortured psychologically, and interrogated at night. She was indicted for organizing a mass disorder, which carries a sentence of up to 15 years, but under international pressure was released, sent to her hometown, and banned from returning to Minsk or leaving the country. She had to check in daily with the police and was often called to report in at the regional KGB headquarters. She continued to edit the site, but felt in constant danger of being rearrested, or worse: Charter 97’s founder, Oleg Bebenin, had been found hanged under mysterious circumstances just a few months earlier.
“I needed to run away because they wouldn’t let me work normally,” Radina said. After escaping Belarus and hiding for four months in Moscow, she was granted asylum in Lithuania, where she edits Charter 97 with a few colleagues who have joined her in exile. The main charges against her have been dropped, but she feels she can’t return: “Today in Belarus it’s impossible to identify yourself as a journalist from Charter 97; that means you are a direct candidate for prison. You don’t need the Chinese model to have censorship over the press—it’s enough for them to arrest you and beat you up.”
Radina’s case is hardly unique. Two political activists who are members of the Belarusian Association of Journalists, Dmitry Bondarenko and Pavel Severinets, are still serving sentences for participating in the election protests. And the murder of reporters, like that of investigative journalist Veronika Cherkasova in 2004, is not unknown…