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about gambling and online casinos in general
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Online poker is the game of poker played over the Internet. It
has been partly responsible for a dramatic increase in the number
of poker players worldwide. For the year of 2005, revenues from
online poker were estimated at US$200 million per month.
Traditional (or "brick and mortar",
B&M) venues for playing poker, such as casinos and poker rooms,
may be intimidating for novice players and are located in geographically
disparate locations. Brick and mortar casinos are also reluctant
to promote poker because it is difficult for them to profit from
it. Though the rake, or time charge, of traditional casinos is
often high, the opportunity costs of running a poker room are
even higher. Brick and mortar casinos often make much more money
by removing poker rooms and adding more slot machines.
Online venues, by contrast, are dramatically
cheaper because they have much smaller overhead costs. For example,
adding another table does not take up valuable space like it would
for a brick and mortar casino. Online poker rooms tend to be viewed
as more player-friendly. For example, the software may prompt
the player when it is his or her turn to act. Online poker rooms
also allow the players to play for low stakes (as low as 1¢)
and often offer poker freerolls (where there is no entry fee),
attracting beginners.
Online venues may be more vulnerable to
certain types of fraud, especially collusion between players.
However, they also have collusion detection abilities that do
not exist in brick and mortar casinos. For example, online poker
room security employees can look at the "hand history"
of the cards previously played by any player on the site, making
patterns of behavior easier to detect than in a casino where colluding
players can simply fold their hands without anyone ever knowing
the strength of their holding. Online poker rooms also check player's
IP addresses in order to prevent players at the same household
or at known open proxy servers from playing on the same tables.
The major online poker sites offer varying
features to entice new players. One common feature is to offer
tournaments called satellites by which the winners gain entry
to real-life poker tournaments. It was through one such tournament
on PokerStars that Chris Moneymaker won his entry to the 2003
World Series of Poker. He went on to win the main event causing
shock in the poker world. The 2004 World Series featured triple
the number of players over the 2003 turnout. At least four players
in the WSOP final table won their entry through an online cardroom.
Like Moneymaker, 2004 winner Greg "Fossilman" Raymer
also won his entry at the PokerStars online cardroom.
In October 2004, Sportingbet Plc, at the
time the world's largest publicly traded online gaming company
(SBT.L), announced the acquisition of ParadisePoker.com, one of
the online poker industry's first and largest cardrooms. The $340
million dollar acquisition marked the first time an online cardroom
was owned by a public company. Since then, several other cardroom
parent companies have gone public.
In June 2005, PartyGaming, the parent company
of the largest online cardroom, PartyPoker, went public on the
London Stock Exchange, achieving an initial public offering market
value in excess of $8 billion dollars. At the time of the IPO,
ninety-two percent of Party Gaming's income came from poker operations.
In early 2006, PartyGaming moved to acquire
EmpirePoker.com from Empire Online. UltimateBet's parent company
also listed on the London Stock Exchange and other poker rooms
such as PokerStars & Poker.com are rumored to be exploring
initial public offerings.
Legality
From a legal perspective, online poker may differ in some ways
from online casino gambling, but many of the same issues do apply.
For a discussion of the legality of online gambling in general,
see online gambling.
Online poker is legal and regulated in
many countries including several nations in and around the Caribbean
Sea, and most notably the United Kingdom.
In the United States, the North Dakota
House of Representatives passed a bill in February 2005 to legalize
and regulate online poker and online poker cardroom operators
in the state. The legislation required that online poker operations
would have to physically locate their entire operations in the
state. Testifying before the state Senate Judiciary committee,
Nigel Payne, CEO of Sportingbet, the owner of Paradise Poker,
pledged to relocate to the state if the bill became law.
The measure, however, was defeated by the
State Senate in March 2005 after the U. S. Department of Justice
sent a letter to North Dakota attorney general Wayne Stenehjem
stating that online gaming "may" be illegal, and that
the pending legislation "might" violate the federal
Wire Act. However, many legal experts dispute the DOJ's claim.
North Dakota Rep. Jim Kasper (R-Fargo),
the author of the legalization bill, has vowed to continue his
efforts, stating that he is "not putting away the idea of
getting into Internet gaming licenses in North Dakota" and
that the "revenue we missed is too great to pass up."
Kasper has also stated that he will introduce the legislation
in the 2007 session of the North Dakota legislature.
In response to this and other claims by
the DOJ regarding the legality of online poker, many of the major
online poker sites stopped advertising their "dot-com"
sites in American media. Instead, they created "dot-net"
sites that are virtually identical but offer no real money wagering.
The sites advertise as poker schools or ways to learn the game
for free, and feature words to the effect of "this is not
a gambling website." Televised ads still feature the dot-net
conceit but print ads have been trending back toward advertising
the dot-coms directly.
Because of the legal grayness around online
poker, many banks and credit card companies will not allow direct
money transfers to online poker sites. This has caused new online
electronic money transfer businesses to spring up. These companies
provide online “e-wallets” that players can load from
a bank account, then transfer the funds directly to the poker
site. The advantage of these services is that it makes it easy
for people to transfer money between different poker sites without
the money going back to a person’s bank account.
In July 2006, United States federal agents,
citing the Wire Act, arrested BetOnSports CEO David Carruthers
in Dallas, Texas while he was changing planes. He was traveling
between Costa Rica and the United Kingdom; in both jurisdictions
online gaming, including online poker, is legal and regulated.
Integrity
and fairness
As with other forms of online gambling, many critics question
whether the operators of such games - especially those located
in jurisdictions separate from most of their players - might be
engaging in fraud themselves.
Internet discussion forums are rife with
unproven allegations of non-random card dealing, possibly to favour
house-employed players or "bots" (poker playing software
disguised as a human opponent), or to give multiple players good
hands thus increasing the bets and the rake, or simply to prevent
new players from losing so quickly that they become discouraged.
However, there is little more than anecdotal evidence to support
such claims, and others argue that the rake is sufficiently large
that such abuses would be unnecessary and foolish. Many claim
to see lots of "bad beats" with large hands pitted against
others all too often at a rate that seems to be a lot more common
than in live games. This might actually be caused by the fact
that online cardrooms deal more hands per hour: online players
get to see more hands, so their likelihood of seeing more improbable
bad beats or randomly large pots is also increased.
However, to date there has been at least
one site, ProPoker.com, that has been found to use serverside
bots that play with the knowledge of players' cards and the cards
yet to be dealt. It has since been shut down, with many players
losing the funds they had on the site.
Many online poker sites are certified by
bodies such as the Kahnawake Gaming Commission, and major auditing
firms like PricewaterhouseCoopers review the fairness of the random
number generator, shuffle, and payouts for some sites.
In general, it should be noted that with
the rakes and tournament fees that are nearly universal in the
online poker universe, there is plenty of profit available in
operating completely fair games. One assumes that the most reputable
and largest online poker rooms have much more to gain by offering
the fairest game possible than through any sort of deception.
Differences
with conventional poker
There are substantial differences between online poker gaming
and conventional, in-person gaming.
One obvious difference is that players
do not sit right across from each other, removing any ability
to observe others' reactions and body language. Instead, online
poker players learn to focus more keenly on betting patterns,
reaction time and other behavior tells that are not physical in
nature. Since poker is a game that requires adaptability, successful
online players learn to master the new frontiers of their surroundings.
Another less obvious difference is the
rate of play. In brick and mortar casinos the dealer has to collect
the cards, then shuffle and deal them after every hand. Due to
this and other delays common in offline casinos, the average rate
of play is around thirty hands per hour. Online casinos, however,
do not have these delays; the dealing and shuffling are instant,
there are no delays relating to counting chips (for a split pot),
and on average the play is faster due to "auto-action"
buttons (where the player selects his action before his turn).
It is not uncommon for an online poker table to average sixty
to eighty hands per hour.
This large difference in rate of play has
created another effect among online poker players. In the brick
and mortar casino, the only real way to increase your earnings
is to increase your limit. In the online world players have another
option, play more tables. Unlike a physical casino where it would
be nearly impossible to play multiple tables at once, most online
poker rooms allow this. Depending on the site, a player might
play from 4 to 10 tables at the same time, viewing them each in
a separate window on the computer display. For example, a player
may make around $10 per 100 hands at a lower limit game. In a
casino, this would earn them under $4 an hour, which minus dealer
tips would probably barely break even. In an online poker room,
the same player with the same win rate could play four tables
at once, which at 60 hands per hour each would result in an earning
of $24/hour, which is a modest salary for somebody playing online
poker. Some online players even play eight or more tables at once,
in an effort to increase their winnings.
Another important change results from the
fact that online poker rooms, in some cases, offer online poker
schools that teach the basics and significantly speed up the learning
curve for novices. Many online poker rooms also provide free money
play so that players may practice these skills in various poker
games and limits without the risk of losing real money. People
who previously had no way to learn and improve because they had
no one to play with now have the ability to learn the game much
more quickly and gain invaluable experience from free money play.
Tracking
play
Tracking poker play in a brick and mortar casino is almost impossible.
You can easily monitor your winnings, but tracking any detailed
statistics about your game requires a player to take notes after
each hand, which is cumbersome and distracting.
Conversely, tracking poker play online
is easy. Most online poker rooms support "Hand Histories"
text files which track every action both you and your opponents
made during each hand. The ability to specifically track every
single played hand has many advantages. Many third-party software
applications process hand history files and return detailed summaries
of poker play. These not only include exact tallies of rake and
winnings, which are useful for tax purposes, but also offer detailed
statistics about the person's poker play. Serious players use
these statistics to check for weaknesses or "leaks"
(mistakes that leak money from their winnings) in their game.
Such detailed analysis of poker play was never available in the
past, but with the growth of online poker play, it is now commonplace
among nearly all serious and professional online poker players.
Bonuses
While the practice of comping players with free meals, hotel rooms,
and merchandise is quite common in B&M casinos, online poker
rooms have needed to develop new ways to reward faithful customers.
The most common way of doing this is through deposit bonuses,
where the player is given a bonus code to enter when placing money
into an account. The bonus code adds either a percentage, or a
set amount of chips to the value of the deposit. One should be
aware that these are not up front payments, rather the bonus is
released in a piecemeal manner in accordance with the number of
raked hands played. Besides this, several online cardrooms employ
VIP Managers to develop VIP programs to reward regular players
and additional bonuses exist for players who wish to top up their
accounts. These are known as reload bonuses.
Signup
bonuses
Most online poker rooms offer downloadable Microsoft Windows programs
that require an emulator program to run on Apple Macintosh or
Linux computers. However, several rooms do have clients that run
natively on Mac or Linux.
Some mobile content providers have started
offering poker on portable devices (mobile phones, PDAs). The
functionality of mobile online poker software is much the same
as computer-based clients, albeit adapted to the interface of
mobile devices. The player must be able to receive a cell phone
signal in order to play.
Online
poker portal
An online poker portal is a website offering poker-related content.
Examples of such content could be news, tournament results, strategy
articles or reviews of online poker cardrooms.
Some portals have a considerable amount
of content, while others attempt to act as mere conduits to other
sites, normally where actual gambling games are offered.
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