7 Moments That Shaped Online Poker History
7 Moments That Shaped Online Poker History
The game of online poker really had it good there for a while. For ten years, startups made bank, lucky players became overnight millionaires on a weekly basis, and online poker captured a popular wave so strong that even James Bond switched his allegiance from baccarat to Texas Hold’Em in the film version of Casino Royale.
So, how did it all start, and--more important--where is online poker heading?
Join us as we track the seven moments that shaped online poker history.
1991: Worldwide Recreational Gambling Launches an Email-Based Poker Tournament
World Recreational Gambling has the best claim to the laurels of the “first online poker game,” in the form of a tournament they launched in 1991.
There was no “Internet” publicly available at the time. Instead, the World Recreational Gambling Poker Tournament (WRGPT) played out over a nascent technology known as email. Even that available, the nascent tech was yawningly slow and tedious--but everyone knew the poker itself wouldn’t be.
Thirty poker-faced players signed up for the WRGPT and received notifications of the hands they were dealt, as well as the hole cards, by email. The players, in turn, slowly replied with their bets.
At that point, a familiar technology got in on the act—a Random Number Generator (RNG), the class of software that still governs digital games of chance at online casinos and land-based video slots the world over.
RNG software determined the players’ next deals, subjecting them to the luck of the draw in digital format.
This early form of online poker, despite its inevitable delays and frustrations, caught on, with nearly 200 participants by the third year it was held. No money was at stake, mind you, but serious players in the poker industry still sat up and took notice.
Chris Ferguson took part in multiple WRGPTs. It’s hard not to think that his enthusiasm for this digital form of the beloved card game didn’t play a major role in his contributions to the development of Full Tilt Poker.
1998: The Launch of Planet Poker
Six years after WRGPT ushered poker into the digital realm, the first hand of poker for money was played online, courtesy of a website on the then-infant Internet—a website called Planet Poker, founded by Randy Blumer.
It was a rough start and never got a whole lot easier for them—typical for the first entries into any untried market. With online payment processing still gaining trust, few people wanted to gamble their money on both a deal of the cards and the integrity of the developer and the security of the website’s payment API.
A few brave souls signed up on the strength of ads in Card Player magazine. The only game available to them was $3—$6 Hold’Em.
Still, Planet Poker gradually built steam, starting with a February game where enough players cycled in and out of the gameplay that it went on all night. Soon, games were running twenty-four hours, with a variety of limits for players of different preferences and risk tolerances.
One of the points of appeal for watching Planet Poker was to improve one’s own gameplay, but there’s little doubt that--because it meant playing for money--it also fired up some players to get more interested in the game than they should have been. Certainly, Planet Poker will have contributed its fair share toward some hard-to-shake bad gambling habits.
Anyway, Planet Poker stumbled through software glitches and stiff competition from coattail-riders like Paradise Poker. Unable to compete on graphics and technical specifications, Planet Poker chose to compete based on integrity and security, laying the groundwork for trust in online gambling developers.
The inaugural poker-for-money website stayed in the game, with over three-quarter-million registered players, until UIGEA spoiled the fun for everyone.
2003: Chris Moneymaker Wins the World Series of Poker
Online poker could have been dismissed as a fluke, a disreputable wing of an already marginal pastime … until Chris Moneymaker came along (yes, that’s his real name).
Chris Moneymaker shocked the world by becoming the first person ever to go on to win the World Series of Poker—and a $2.5 million cash prize—by entering an online satellite poker tournament.
The Atlanta-born Knoxville resident, who held down two jobs at the time, claimed the entry fee was $39, though PokerStars, the sponsor of the satellite tournament, later claimed that it was an $86 entry fee. Still … not a bad RTP even then, turning $86 into $2.5 million, right?
This was a real winner for all the viewers too; this kind of remote-viewed tournament captured the public’s imaginations the world over. Everyone loved to try and spot those poker faces from the comfort of their own armchairs.
The rags-to-riches story almost didn’t happen. At one point, Moneymaker intentionally tried to lose his hand and walk away with $8,000, which would have been enough to pay off his credit card debt.
A friend offered to stake him $5,000 for half his action (the five grand never materialized—the friend lost it gambling) but Moneymaker stayed in and ended up winning the whole shebang in a dark-horse victory against Sam Fahra, turning over a full house to Fahra’s two pairs after having previously bluffed Fahra into a fold.
Moneymaker lost most of his winnings in a divorce but enjoyed a prosperous later career due to endorsements and continued presence on the professional poker circuit.
More importantly, a surge in interest in the game, dubbed “the Moneymaker Effect” by industry experts, flooded business into online and casino poker tables. The notion that an affordable entry into an online tournament could result in huge winnings at the grownups’ table caught the popular imagination.
It was also at this juncture that various celebrities whose jaded careers and public profiles needed a boost began to latch onto televised poker as a way to get noticed.
2006: PokerStars Debuts the “Sunday Million”
On March 5, 2006, PokerStars upped the ante with its weekly “Sunday Million” tournament. An immediate hit, the first tournament attracted nearly six thousand players and the prize ballooned up to over $1.2 million.
The tournament was held every week thereafter. On the five-year anniversary tournament, almost 60,000 players registered, with a jackpot of over $11 million at stake.
These massive weekly jackpots were the high-water mark for online poker, with thousands of players making a weekly pilgrimage to PokerStars for a chance to strike it rich. Online poker reigned supreme … but trouble was brewing on the horizon.
2006: The Unlawful Internet Gambling Enforcement Act Passes
The beginning of the end of the golden age of online poker came on October 13, 2006, when President George W. Bush signed into law the Unlawful Internet Gambling Enforcement Act (UIGEA), an addition to Title VIII of the SAFE Port Act.
Pushed through by anti-gambling politicians and lobbyists in the US government, it basically made it a Federal crime to accept payments for a gambling activity prohibited by a state or Federal jurisdiction. Fantasy Sports was specifically exempted.
Gambling is still illegal in most of the United States. However, in something of a contradiction, prosecutions for online gambling offenses had proved rare; now, the UIGEA gave Federal law enforcement a powerful new tool to crack down on online gambling.
In response to the passage of the UIGEA, Party Poker, the original online real-money poker website, shut down for good. The founder of Neteller, a popular mobile wallet for online gamblers, was indicted for money laundering and $55 million in assets were seized by the US Attorney’s Office for the Southern District of New York, depriving many online poker players of access to their money for months.
US jurisdictions with legalized gambling got creative. New Jersey ultimately passed laws allowing online gambling … but only if the sites ran off servers located on the premises of one of the two authorized racetracks in the state, or on the premises a licensed casino in Atlantic City, the only municipality in the state where casinos were legal. Moreover, players would have to be physically located in the state of New Jersey, as confirmed by GPS tracking.
It was still several years before the heads would really start to roll, but UIGEA still made a sizable dent in the online poker industry upon its passage.
2010: Full Tilt’s “Rush Poker” Proves a Game Changer
Despite the threat posed by UIGEA, Full Tilt Poker kept upping the stakes. In January of 2010, the site introduced “Rush Poker,” which allowed players to play four to five more hands per hour.
The internet gaming world wasn’t ready for this. Suddenly, the top players could win multiple huge pots at a substantially accelerated rate. Less-seasoned poker players could also lose money at a rapid-fire pace. More than a few bankrolls were depleted by Rush Poker.
Still, this poker-on-steroids approach caught on. PokerStars introduced “ZoomPoker” to compete, and other sites rolled out similar products.
It was a game-changer, but it’s hard not to feel like it was hubris. Regulatory guns were trained on the booming online poker trade, and Full Tilt Poker was smack in the crosshairs.
2011: The “Black Friday” Indictments
If the passage of UIGEA spelled the beginning of the end, the party really ended on April 15, 2011, a date that will live in infamy as “Black Friday” in the online poker world.
UIGEA had put a powerful bullet in the gun of Federal anti-gambling enforcement several years earlier. On Black Friday, the Department of Justice pulled the trigger, unsealing indictments against members of upper management at Absolute Poker, Full Tilt Poker, and PokerStars, threatening them each with $3 billion in civil damages, as well as years in prison.
PokerStars and Full Tilt shut down immediately, with Absolute Poker following close in their wake. Vendors assured players that their existing funds on deposit were safe, but the sites were replaced by threatening seizure notices over the logos of the DOJ and FBI—not very comforting for players with active bankrolls.
Several of the sites got their dot-coms back shortly, the execs made bail, and players began to get their money back. But shockwaves reverberated throughout the online poker community. PokerStars ultimately settled with the government, but Full Tilt Poker, which depended on a US user base and therefore most exposed to UIGEA consequences, had commingled funds and placated shareholders by paying them millions of dollars in user funds.
After several months of withholding player’s deposits, Full Tilt Poker’s licensing jurisdiction, the permissive island of Alderney, had had enough. In late June, the Alderney Gambling Control Commission revoked Full Tilt Poker’s license. PokerStars ended up acquiring them.
Americans were left with a drastically restricted list of options for online real-money poker, limited to three jurisdictions.
What Does the Future Hold for Online Poker?
Despite the setbacks the US-centric online poker industry endured due to UIGEA and Black Friday, online poker remains massive worldwide. Although tightly regulated, online gambling is legal in the UK and many other dominant jurisdictions.
The US is following suit as well, with states like Pennsylvania and Michigan relaxing their grip. A study by Academicon revealed that if it were legalized and regulated, the US online poker industry could be a $2.2 billion industry in its first year and reach $3.3 billion in its tenth year.
Online real-money poker is, of course, still widely played in the United States, on foreign-owned websites. The internet is global, and many sites base their operations in permissive jurisdictions like Costa Rica, the Isle of Man, or Gibraltar. Yes, online gambling is illegal under most states’ laws, but most states also don’t have the resources or the interest in prosecuting such minor offenses. And besides, they would need limitless resources to do that, since online gambling is so widespread.
The fastest-growing segment of the online poker playing market is expected to be the mobile variant, with players embracing the convenience of smartphones and tablets to gamble on the go. Expect poker sites to cater to time-constrained players gaming on public transit or during work, allowing them gameplay options that they can get into and out of quickly.
Ultimately, online poker will only get bigger and better. It’s a fragmented, scalable industry with a ravenous worldwide audience and an aging, tech-savvy target market. Talking of tech, too, we recently heard that the world of artificial intelligence is coming to the world of casinos in the form of facial recognition. It’s a strange thought, but could it mean casinos might use robots to spot those small facial expressions on a poker player’s face. Worth thinking about.
Anyway, there’s little doubt that not even the King of Spades could slay the roaring dragon of casino technology.
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