Los Angeles, CA
I turn off my phone whenever I write to limit distractions. I had two phone calls this morning and both got sent to voicemail. One was from a broker, the other was from a bookie. One of my friends opined, "Is there a difference?"
"One is located in Costa Rica," I answered. "The other is on 60 Wall Street. Both operating in a gray area. How gray? Charcoal."
Funny how the U.S. government determined that one is illegal and the other is perfectly okay. Last time I checked, bookies never imploded the financial system or asked for bailouts when a huge underdog (e.g. NY Giants upsetting a 16-0 New England Patriots team) almost bankrupted them.
I essentially liquidated both "trading" accounts. The stock market is a Ponzi Scheme and I decided to trade commodity futures instead after getting out of equities last year. My broker was trying to churn what little I had left in my account. He wanted to tell me about their latest hot pick du jour. My bookie (actually a VIP manager) from Costa Rica has been calling me daily to inquire about re-funding my account after I pulled 90% of my bankroll offline in the wake of Black Friday.
It's been almost a month since 4/15. I was in Lima, Peru at the time when Black Friday decimated the American online poker landscape. I made only one call that day -- to Costa Rica. I initiated a withdraw. The VIP manager offered me assurances that my money was safe.
"Safe? Ha!" I told them. "That's what Neteller told me back in 2007, what my stock broker said during the sub-prime mortgage crisis in 2007-08, and what the online poker rooms told me."
"You're money is safe here," said a Costa Rican woman with a near perfect Southern California accent.
"Well, you can see the cyclical activity in my account. My high volume months are November thru January with a bump in March for March Madness. NBA playoffs are almost over and I'm moving to Vegas soon. If everything what you say is true about my money being safe, then I'll be back in the fall for football season. You're not going to lose any business if I withdraw. I never bet on baseball. Only degens bet on baseball."
"But, you're money is safe here."
"Isn't that what Bernie Madoff told his investors?"
"Which (book) does he own?" asked the VIP manager.
"He's a Wall Street guy and stole billions from his clients."
"Oh, one of those crooked gringos?"
I had Ben Affleck's monologue from Boiler Room swirling in my head... "A sale is made on every call you make. Either you sell the client some stock, or he sells you on a reason he can't. Either way... a sale is made. The only question is: Who is going to close? You or him?"
No offense to the tica on the phone servicing my account, but I wasn't about to let her persuade me to keep all of my money in Costa Rica (in theory it was in Costa Rica, because I actually assumed it was sitting in an unspecified bank account somewhere in the Caribbean). After a few minutes of negotiating (I left 10% to dabble in the NBA playoffs), she agreed to let me withdraw 90%.
As one of my good friends from Costa Rica once said, "Getting money into a Costa Rican sportsbook is easy. Getting your money out is the tough part."
He was talking about the variance of betting on sports and the degenerate nature of sports betting -- and how it's hard to walk away with a profit. At the same time, he worked for a few sportbooks and knows the transfer of money from offshore to onshore is a complex process. Sure, the bookies will do everything possible to keep your money in their account, but the logistics behind getting money to their clients was difficult before Black Friday. You can imagine how much harder it will be now.
Hence, why I wanted to be one of the first players to withdraw funds before a mass exodus of frightened gamblers, or before the books fled the market.
I won't go into details about how I got my money, but if I was writing the screenplay, I'd say that a guy in a jumpsuit (who could have been an extra from The Sopranos) met me at an undisclosed diner far away from The Strip in Las Vegas.
"Yous the doctah?" he said in a recognizable South Jersey accent.
"The doctor?" I said before a long pause, "Oh, yeah, I'm the doctor you're looking for."
That's when he dropped an envelope on the table and flagged down the waitress for a cup of coffee. And yes, in case you were wondering, he made me buy lunch and told me to bet the Mavericks to sweep the Lakers.
I was listening to Betting Dork's podcast on PreGame.com. His guest was Vegas Runner, one of my favorite wiseguys from Philly, who said that Black Friday was a wake up call for offshore sportbooks. He also mentioned that the sportsbetting community got lucky because no one in either industry, poker or sportsbetting, saw Black Friday coming. Vegas Runner's theory on why the DOJ went after online poker was because the government is broke and "they're looking for the easiest way to get (money)." He also suggested if the feds wanted to, they could have ambushed BOTH industries and crippled the flow of gambling funds. As is, the sports betting community, all of the wiseguys and sharps got a huge warning that the federales might be gunning for them next.
You can listen to the podcast here. The segment I'm talking about appears at the 28 minute mark and lasts a few minutes.
I have a few theories on why the sportsbetting companies were not touched during Black Friday:
1) The sportsbooks have some sort of protection from authorities which allows them to operate (and thereby accept American players). Some land-based casinos might have greased the feds because their legal sportsbooks might need the assistance of offshore books to occasionally offset one-sided action. As a result, some of the land-based casinos made a wink-wink deal with the feds to stay away from their money movers.All of these are half-baked theories I came up with on the fly,however, since Black Friday, a couple of sportsbooks announced that they will no longer be accepting new players from America. The list includes Sportsbook.com and BetUS, which made their announcement last week. As of last night, you can add Sports Interaction to the list. In case you're wondering, if you already have an account with those sites, consider yourself lucky to have gotten grandfathered in, because you can continue to bet, along with making withdrawals and deposits.
2) The feds are using the intel that industry rat Daniel Tzvetkoff (former owner of a third party processing company) provided them to bring down online poker, which will help them build a case against sportsbooks. So, it's a matter of time before they strike and the sportsbetting world will have to deal with their version of Black Friday.
3) Some sportbetting operations have had links to organized crime and a different federal investigation unit (e.g. the FBI) might have an ongoing investigation that they don't want the DOJ to interfere with.
It seem as though many of the sportsbooks are spooked out and they're taking a proactive approach to prevent the DOJ (through their proxy the OIJ) from indicting them and eventually raiding their Costa Rican offices.
I'm assuming that the future of sportsbooks in America will follow a similar path to what happened with the online poker market in 2006 after the UIGEA was introduced. A few operators will bail while a couple of others will remain and attempt to gobble up the American market share. Yes, Americans are not the only ones who bet on sports and like poker, there's a thriving international player base, but American players were gravy. They generated such a massive amount of volume due to the popularity of NFL wagering (and to an extent, March Madness), that it'll be impossible for a second-tiered or fledgling sportsbook to ignore the amount of "free money" available if they step in and accept sports bets from Americans.
If you're a whale on American soil, then you're action will be taken care of. Even though Pinnacle doesn't accept Americans, every huge bettor I know has an account with Pinnacle, or at the least, an agent booking their wagers at Pinnacle for them.
At this point, the federales and corporate gaming entities win because they'll get my action (and thereby have access to my money). As a result of Black Friday, I'm going to do all my gambling in land-based casinos. I have an account on Cake Poker but doubt I'll play anytime soon. Live poker is in my future along with spending time at the sportsbook's window on The Strip.
In the meantime, the next time the VIP manager from Costa Rica calls, I'll be sure to send them to voice mail, along with my former stockbroker and any other cold caller from a boiler room on Wall Street, who is trying to get me to "Buy the Fucking Dip!"