Online Poker in California and Crony Capitalism

online-pokerI watch an extremely entertaining fellow by the name of Jason Somerville play poker on Twitch and if there is any subject that can rile up the mild mannered, friendly fellow, it’s the people who are trying to stop online poker from becoming legal. It was during one of his rants on the subject that I became aware of legislation that is pending in California.

The problem with this bill is that it allows only existing card clubs and the California Native American tribes to host the websites. This means that the established online poker sites would not be able to compete. In addition, the vast majority of the money taken in from such online gambling sites must be given to the horse racing industry. This to cover for the expected losses to that industry from wider gambling options.

That’s the very definition of crony capitalism. Basically the tribes now host the majority of gambling in the state of California and they don’t want competition. There is a huge amount of money involved.

You may not realize how much bigger California is than the rest of the country but the numbers are mind-boggling. California has the sixth largest economy in the world, tied with France. They produce fully 13% of the total agricultural output of the United States. They purchase enormous amounts of products produced in the other states who are quite dependent on them as a consumer.

I tell you all this not to brag about California but to give you the reality of the amount of money that is at stake. Those Native American Tribes want that money and they don’t want to share it with existing online poker sites.

If we lived in a society that actually valued real capitalism we would not consider such factors as who is to benefit from legislation. We’d simply decide if we thought gambling was something the state should allow or not allow. I’d argue against, but understand, someone who thinks the government should prevent people from gambling because it’s potentially harmful. The legislators would decide who they agreed with and pass laws.

This situation is not that. It is a product of the way government has come to have undue influence on business. Don’t get me wrong. I believe in anti-trust laws. That being said, I absolutely think the more power government has over the success or failure of a business, the more a practical business person must be involved in influencing politicians.

The more business gets involved with politics the more corrupt it becomes. Business operators become less interested in providing a quality product. They simply want to have legislators pass laws that favor their business at the expense of competitors.

What should happen in this case is simple. If California decides to legalize online gambling the horse racing operators need to work harder to get people to visit. The Native American Tribes need to either partner with the existing Online Poker sites or develop their own alternatives. That’s business.

It’s not up to government to decide who succeeds and who fails. When they do so we all lose.

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Ideology
Current Release: The Gray Horn
Next Release: For the Gray

Cheating or Taking Advantage of the Rules

Phil IveyAn interesting case is taking place in England about a poker player who won a significant amount of money from a casino. The casino is refusing to pay because the player supposedly cheated. What I find intriguing about the case is that the so-called cheater, Phil Ivey, is not accused of breaking the rules but of taking advantage of the failure of the casino to note a printing error on its cards.

Basically, Ivey and a companion at the table supposedly noted a mistake on the cards which allowed them to correctly identify which cards were dealt even when face down. The question becomes: Is this sort of behavior is cheating? Is taking advantage of a weakness in the system cheating?

To my way of thinking this is different from cheating in that a cheater doesn’t play by the rules to gain an advantage. In this case the casino dealer had access to all the same information as Ivey. It all becomes rather interesting from a philosophical point of view.

I think we can say without reservation that it’s unethical. If you are playing baseball and note that your opponent’s shoelace has become untied, the sporting behavior is to point out the potential game-changing lace in order to even the playing field. It’s certainly the morally correct behavior but I’m of the opinion that ignoring the shoelace in the hopes your opponent falls down at a crucial time in the game does not rise to the level of cheating. If the casino’s accusations are true, that Ivey noted the printing flaw and played with that advantage to win a large sum of money, his behavior is unquestionably unsporting but, in my opinion, doesn’t rise to the level of cheating.

On the other hand, if he was somehow involved in introducing the printing flaw to the cards, then I think his behavior is not only cheating but criminal. In that case he committed fraud and theft. I don’t think anyone is accusing Ivey of such a thing and I only mention it as a philosophical idea.

The real question I’m pondering is at what point I would engage in unethical behavior myself. I like to think that in a friendly game of cards with friends; if I noticed that the cards were printed badly and I had an advantage, I would immediately alert my friends and we would get a new deck. I know that if a friend of mine noticed such a mistake on the cards and didn’t notify the rest of us and went on to win some money I would be somewhat angry. Not to say they cheated, just that I would consider it poor behavior.

I think it’s become normal behavior in our society to win at all costs. That taking advantage of a situation rather than pointing it out is largely the way we function in the modern world. I don’t think it’s a good thing but I do think it’s accepted. Judging by the comments I read on the Ivey story most people think what he did was perfectly reasonable. I don’t think so. I think it was unethical. I also think the casino owes him that money. He didn’t cheat, he just took advantage.

Would you take advantage of misprinted cards in a game with friends? In a game with tens of thousands of dollars at stake? Does the prize make the behavior acceptable? Interesting questions. What do you think?

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water ($2.99 for 300 pages of action packed adventure!)
Next Release: The Spear of the Hunt