As much as I dislike using -EV luck-based games as a source of state revenue, this seems like an especially asinine policy. It encourages the worst kind of gambling while creating fewer jobs and hamstringing Maryland’s casinos in their competition with those in neighboring Delaware, Pennsylvania, and West Virginia.

There are a few reasons why gambling-as-revenue-stream is bad public policy. First, decades of experience with the lottery suggest that it’s a regressive tax. That is, it draws a disproportionate amount of its revenue from the lowest-income households in the state. This is both bad for those families and for the economy in general, as additional money in their pockets is more likely to be spent in ways that stimulate the economy as a whole.

Don’t insult me with those ridiculous claims like “the money is for education!” Money is fungible, and education is already a high-priority budget item. Money raised from slot machines and earmarked for education is simply money that would otherwise have been diverted from some other budget item. The disingenuousness of this claim is jaw-dropping, and it’s even more appalling to me how many people fall for and parrot it. It’s like they understand nothing about how money works. Which brings me to my next point…

Gambling encourages bad decision-making and an undesirable outlook on life. You might be surprised to see a professional poker player saying that he opposes legalized gambling, but really I see a world of difference between poker, a skill-based and potentially +EV game, and slot machines, lotteries, etc. which are beatable only by cheating and generally a terrible decision for anyone to play. Poker at least has the potential to teach good financial decision-making. Its governing philosophy is that, as in life, your outcomes are in part a result of your decisions and in part a result of luck. Table games generally and slot machines in particular operate on a “roll the dice and see what happens” mentality, not the way a government ought to encourage its citizens to live and act.

It’s one thing to say “people are doing this anyway, let’s at least tax it”. I don’t generally believe the state has a right or obligation to actively prevent people from making self-destructive decisions, and I’m all for taxing them, which if anything ought to discourage them. However, it’s quite a different thing to actively encourage bad decision making. The Maryland Lottery’s slogan used to be “It could be you.”

Slot machines are about the least social games offered in your average casino, and they’re widely considered to be the most addictive. I’ve never played any non-poker game in a casino, so I’m not an authority here, but I can at least see the appeal of craps, where you’re interacting with other people and all getting excited about the same thing. People playing slots look like zombies, dead-eyed and lost in their own little world.

Finally, I realize that dealers are a relatively small percentage of the jobs created by a casino, but they’re also among the most lucrative. To the extent that casinos are sold as a job-creation strategy, which they often are, it makes no sense to me to restrict them to a form of gambling that creates fewer jobs.

My understanding is that these casinos are slots-only because, ironically, that was an easier sell to skeptical voters and politicians. The casino advocates were apparently able to sell slots as “gambling lite”, somehow less seedy than table games. I suppose the American public as a whole still has some negative associations attached to cards.

Meanwhile, people who want to play with cards and dice are still driving to neighboring states. As it happens, I’m headed to West Virginia when I finish writing this to play poker at the nearest casino that offers it. Though I won’t, I’m sure many others like me will drop a few dollars in the machines while they’re there. Ironically, slots were originally proposed in Maryland as a shot-in-the-arm for the horse racing industry, which was losing customers to Delaware tracks that also offered slots.

The whole thing just seems like a giant public policy boondoggle to me. A few developers and casino operators are playing poker, and they’re fleecing all of the legislators and voters who are simply gambling.

The vast majority of people who contact me about “advertising” are actually looking for some shady shit like this, though some of them express it more subtly:

“I work for XXX and we are looking for you to publish some content of ours on your website.  In exchange, I can give you a free £30 free bet at our casino.  Our content writer has produced several reviews of our online slot games.  Would you be interested in posting one of these articles on your site in exchange for a £30 free bet?”

I don’t usually respond, but this one was particularly blatant, so I wrote back:

Sorry, I write my own reviews, and I don’t take bribes.

My first reaction was that, this close call notwithstanding, this was a pretty good spot for Bloch. Granted everything I’ve heard about Ivey is that he’s both incredibly good at poker and insanely intimidating in person, but is he really 24 times more likely than the average player to take it down? The one thing I don’t know, which would make a big difference, is what his chip stack was like at the time. I guess if he was already at like three times the average when he took the bet, it might not be so unreasonable to think he’d close out eight times as often as anyone else sitting on a stack that big.

Even against bad players in a great structure, that’s an awfully huge edge. Then again, if Ivey does make it to the final four with a decent stack, I imagine he takes it down a large percentage of the time.

What do you think? Was Ivey getting the best of Bloch when he took 99:1?

Deke Castleman’s Whale Hunt in the Desert, though, is not so much a biography or memoir of Steve Cyr as it is a history and exposition of the ways in which Las Vegas caters to, and does battle with, the biggest gamblers in the world. In fact, the chapters that explicitly focus on Cyr are the least interesting, reading as though they were written by an adoring fan (or, as is perhaps more likely, by Cyr himself). Elsewhere, though, Whale Hunt is a fascinating, entertaining, and funny distillation of Las Vegas gambling culture.

An interview with Cyr on the Two Plus Two Pokercast first piqued my interest in this book. Cyr was funny and insightful, telling a few good stories of high-roller degeneracy and hinting at many more. I picked up Whale Hunt in the Desert hoping to find an anthology of these stories.

I nearly put it down when the first few chapters proved to be a star-struck account of Cyr’s rise from telemarketer to super-host to the stars. Castleman unapologetically paints Cyr as an underappreciated genius persecuted by the “dinosaurs” who were responsible for servicing the casinos’ biggest players, or whales. Cyr himself is not nearly as interesting as his customers and his interactions with them, yet the book’s early chapters are loaded with trivial details of his young life.

Thankfully, Castleman soon turns away from Cyr to examine the early efforts of the Las Vegas casinos to rope in bigger gamblers in the 1980’s. Though Steve Wynn was initially criticized for spending hundreds of millions of dollars building the Mirage, with its volcano erupting hourly on the Strip, his super-casino’s immediate success quickly spawned a wave of imitators. Soon, the major casinos were competing to offer the swankiest villas, priciest shopping sprees, and most coveted show tickets to the same handful of six- and seven-figure players.

Castleman chronicles the emergence of these perks and highlights the most extravagant ways in which high-end casino hosts barter food, liquor, sex, and drugs for a shot at a multi-million-dollar bankroll. It seems Cyr’s contribution, which the author never fails to point out, was proving that “if you comp it, they will come.” According to the author, Cyr cajoled his bosses into making substantial up-front investments in individuals who, with the proper cultivation and cajoling, had the potential to become giant whales. Such players now routinely receive private jet and limousine transportation, hundreds of thousands of dollars in “appearance fees” (cash received up front for agreeing to play at a particular casino), and discounts on their losses in addition to luxurious accommodations and round-the-clock butler and concierge service.

I was surprised to learn just how small the house edge can end up being by the time these high-end comps are accounted for, though of course a small edge on millions of dollars wagered still translates into serious profit. Nevertheless, many accountants fear the biggest whales. It seems that casinos generally do not have the bankrolls to absorb the variance that a big-money craps player brings with him, and some actually discourage the largest wagers for fear of eating a loss that could crush their quarterly profits and consequently the value of their company’s stock. Castleman even suggests that the biggest gamblers, who are often savvy business executives, sometimes capitalize on their winning sessions by shorting a casino’s stock after leaving the table with millions in profit.

Though Castleman fawns entirely too much over Cyr, he does occasionally call him to account, most notably in a chapter on the ethics of casino hosting. By Cyr’s own recokoning, he considers many of his customers to be friends yet admits that approximately one-third of them cannot afford to lose the money that he encourages them to gamble away. Cyr, while claiming that his goal is never to break a player but rather to “bleed” him over many years, concedes that more than a few have lost life savings, bankrupted businesses, and ruined marriages on his watch. The author does not take his subject fully to task, but he does cast a critical eye on Cyr’s apologetic that there was nothing he could do and that the players would have lost the money to a different casino if they hadn’t lost it to his.

Trivial biographical details and hero-worshipping aside, Whale Hunt in the Desert is a fascinating introduction to the world of high-stakes gambling in Las Vegas. The focus is not on anecdotes of extravagance and degeneracy, though there are a few, but rather on the gamble that the casinos themselves undertake when they match wits, and bankrolls, with the world’s biggest players.

The immediate consequences were disastrous: numerous poker sites, including industry giant Party Poker, stopped accepting American business and saw their stock prices plummet. Third party “e-wallets” also closed their doors to American customers, and in the case of Neteller huge sums of money were stuck in limbo for months. Games grew scarcer and tougher, though frankly not to the extent that I feared they would.

That was a dark time for internet poker, but not much has happened since. Federal agencies and US banks locked horns over who would bear the responsibility for identifying transactions intended for unlawful internet gaming. Though a shot over the bow that scared many major players out of the US market, the UIGEA has been without teeth or content since its passage. The games aren’t as good as they were in the “Golden Age” but plenty of us are still making plenty of money.

Yesterday, however, the Treasury Department finally announced its rules for implementing the UIGEA. Like the bill’s original passage, the rules come into being via a relatively underhanded political maneuver. They are among the many “midnight” regulations that the Bush administration will sneak under the wire before Obama takes office on January 20, 2009.

The new president will of course be free to reverse Bush’s last-ditch orders and regulations, and I certainly hope that Obama will do so in this case, but inertia is a powerful force in US politics. Bush has the tremendous advantage of no longer facing re-election and thus accountability for his actions and decisions. What really needs to happen is for some enterprising politician to discover how much money could be made in tough economic times by legalizing, regulating, and taxing internet gaming. Howard Lederer is optimistic about the prospects for this in an Obama administration, but I’m not holding my breath.

Still, I was glad to come across a very reassuring analysis from prominent gaming law scholar I. Nelson Rose, who concludes that

the federal regulators charged with making regulations to enforce the Unlawful Internet Gambling Enforcement Act (“UIGEA”) simply gave up. They were supposed to make rules forcing financial institutions to identify and block money transfers for unlawful Internet gambling transactions. But they were defeated by the difficulty of defining what was unlawful and the impossibility of tracking individual transactions. So they told credit card companies to come up with some additional code numbers for gambling transactions and everyone else can basically continue to do what they are now doing – oh, and financial institutions have to send a notice to all their clients telling them not to be involved in illegal gambling.

If he’s right, it sounds like this new pronouncement should have very little effect on the current state of internet poker. In any event, financial institutions will still have until December 2009 to put their procedures into place. So I will postpone panicking for a while at least.

I can’t claim to be a poker celebrity, but yesterday I got a taste of what that would be like. After waking early, going for a swim, having breakfast, and putting in some non-poker work at my computer, I made my first trip to the Rio. I wasn’t going to play but to meet up with Bill Ordine, a reporter from my hometown paper, the Baltimore Sun, who is working on an article on poker and philanthropy. He’d already interviewed Barry Greenstein, who’s known as “the Robin Hood of Poker” for donating over a million dollars in tournament winnings to a children’s charity, and Annie Duke, who organized a $5000 buy-in charity tournament called Ante Up for Africa to coincide with the WSOP.

My own story is a little different. I’ve donated only a little more than 5% of my poker winnings to the non-profit organization that I founded, the Boston Debate League (BDL). My real contribution is all of the time and work that I put into it. Poker is what enables me to do that. I average 20-25 hours of work per week for each, and I make enough playing poker that I can afford to put that kind of time into the BDL.

It’s great that Bill is doing this article, because poker sometimes gets a bad rap among the general public. People tend to believe, not entirely without reason, that poker encourages a cut-throat, every-man-for-himself mindset and that it rewards lying, treachery, and deceit. Hopefully an article in a major newspaper that focuses on the good that poker enables people to do will help to clean up that image.

Poker hasn’t just given me the financial freedom to do “good work”. It’s also taught me valuable skills that a liberal arts education did not. To paraphrase Ms. Duke, poker isn’t fundamentally a game of lying, it’s a game of pricing and negotiation. I do feel it’s given me some business sense that has proven useful in meetings with foundations, prospective donors, the Boston Public Schools, and other individuals and institutions with which the BDL works.

Largely, the interaction between my poker “work” and my urban debate work has been a one-way street. That is, poker gave me the skills and financial freedom to grow the Boston Debate League, but the latter didn’t do much for my poker game, except maybe making me feel less of a leech on society by gambling for a living.

Recently, however, that’s started to change. In addition to playing, I now make money by coaching poker as well. Sometimes this is with individual students who pay me by the hour, but I also work for a video training site called Poker Savvy Plus. They pay me to record videos of myself playing or talking about poker and then offer these videos on a subscription basis to people who want to improve their game. My experience teaching debate and working with professional teachers has definitely made me a more successful and popular poker coach.

Yesterday, I got to meet my co-workers at Poker Savvy for the first time (in most cases- there were a few I already knew). But first, I had about an hour to kill between my interview with Bill and my meet-up with Poker Savvy. So, I headed down to the Amazon Room, the convention center at the Rio Hotel & Casino where the WSOP is held. I was hoping I might see someone I knew, but the odds were slim. Actually, the odds were good that I’d see someone I knew but slim that I’d recognize them. Since I play poker almost exclusively online, I plenty of people by their screen names but have no clue what most of them look like.

As luck would have it, though, I was spotted by my friend Richard almost immediately. Richard goes by Shorty both because of his last name is and because he is immensely tall. He was just starting a 20-minute break from a tournament he was playing, so I accompanied him for a quick bite at the WSOP Poker Kitchen while he told me how things had been going for him so far in Las Vegas. Mostly he raved about how soft and juicy the side games were and asked what I was planning on playing.

I told him the truth, which is that I had exactly $10,000 in cash on me, which I needed to buy into the main event. My plan was to play $5/$10 or $10/$25 games, hope for the best, and then find a Bank of America (there are none on the Strip, so I’d have to take a cab there and back) to withdraw more if I didn’t win. Shorty told me that he was leaving town that night and would be happy to lend me some cash since he wouldn’t need it. We exchanged phone numbers so that we could meet up when he was finished playing that night, and then he got back to his tournament.

I wandered around for a bit longer and then headed up to the suite in the Rio that Cardplayer magazine had converted into a studio for the duration of the WSOP. This is where I’d be meeting everyone else from Poker Savvy to record a roundtable Q&A session where we discussed poker topics submitted by Cardplayer readers.

Since I arrived about fifteen minutes early, I had some time to hang out with the Cardplayer crew, including the main reporters/hosts for their internet content: Shawn Green and Lizzie Harrison. Those of you who follow the poker scene may know these two, and those of you who don’t probably won’t be surprised to learn that Lizzie is an attractive and buxom twenty-something. Her looks have earned her a bit of a cult following on internet poker forums, and I can assure you that she is at least twice as hot in real life. But she, Shawn, and the rest of the Cardplayer crew were also very down to earth and fun to shoot the breeze with.

After about twenty minutes, the other Poker Savvy people started to arrive: Justin “Jurollo” Rollo, Dani “Ansky” Stern, Isaac “Ike” Haxton, Chris “Tribefan” Rhodes, Tony “Bond18” Dunst, and some of the behind-the-scenes guys. We took our seats and waited for the star of the show, Mike “The Mouth” Matusow, to join us during his break from the Ante Up for Poker tournament.

For those who don’t know, Mike is, to understate the matter, a character. Though he’s had tremendous success as a poker player, winning multiple WSOP bracelets and several six-figure prizes, he’s also lost a lot of money to compulsive gambling and spent some time in jail for possession of cocaine. He’s called “The Mouth” because he talks non-stop at the table, often berating his opponents’ play, singing his own praises, or just generally calling attention to himself.

Lately, he’s made some impressive gains in getting himself together. In the last year, he’s dropped over sixty pounds, motivated by a $100,000 prop bet to get from 241 lbs down to 179. Just recently, he won his third WSOP bracelet in the $5000 rebuy 2-7 single draw rebuy event.

So we are all sitting in front of the cameras and waiting for Mike when suddenly there is a loud thump on the door. Someone opens it, and The Mouth comes crashing into the suite like a stampeding rhinoceros. “You all wouldn’t believe how f—ing fast I f—ing ran to get up here,” he pants, nostrils flared. “Let’s do it! Let’s go! Let’s get this thing f—ing started!” he shouts, clapping his hands. He takes the last available seat, which is in the back.

I’m wondering if the most famous guy here shouldn’t be seated more prominently, but it turns out not to matter, because Mike makes himself the center of attention no matter what. He fields the first question enthusiastically and then interrupts whomever is speaking when he decides he has something to add. When he isn’t shouting over us, he is gesticulating wildly to the people off-camera that he has to go in a minute or that he would like a bottle of water. We pass it to him, and he consumes the entire thing in a single ten-second chug, then tosses it haphazardly aside.

I don’t imagine that much strategy content slipped past Mike’s antics, but the clip should at least be good for comedic value. It doesn’t appear to be up on Cardplayer’s website yet, but I’ll let you know when it is.

After the taping, we went out for drinks sans Mike. Truthfully, an afternoon with a bunch of internet poker players is not generally something I’d look forward to. Most are brash, self-absorbed, whiny, and otherwise annoying. But I must say that to a person, my co-pros at Poker Savvy were a great bunch. They are all very successful at poker and have a lot to brag about, but they don’t come across as stuck up or anything, and they have some good stories.

For the full-time professionals, the WSOP is a magical time of year. Groups of guys, from four to ten or more, rent palatial houses in Las Vegas and spend weeks playing poker and partying their asses off. I don’t think any of the best stories were intended for public consumption, but you can probably imagine the sort of debauchery that a bunch of guys in their early twenties with way too much money can get up to in Las Vegas. I’m only a few years older than most of them, but that whole lifestyle has never really been my scene. There are times when I feel little pangs of regret and a sense that I could be living a seriously crazy life, but for the most part it doesn’t appeal to me. I do love hearing the stories, though.

We left the bar around seven, and I got a ride back to the Rio. I’d had only one drink in anticipation of putting in some hours at the tables that night. As I was waiting for a seat to open up, I ran into Shorty again. He had just been eliminated from his tournament and was going to go pack his bags then bring me some cash before leaving for the airport.

About an hour later, I was seated in a tight but not particularly tough 10/25 game when I spotted Shorty wandering the cash game section. I stood up and waved to catch his attention, played one more hand, then walked away from the table for a minute to speak with him. “Here’s $7500,” he greeted me, handing me a roll of $100 bills. I pocketed it as he shared some intel on players at my table whom he’d played with in the last few days, then I wished him a good flight and returned to my game.

This really underscores the value of reputation in the poker community. I’ve known Shorty for about three years online, but we’ve met only two or three times in real life. Yet, just as a favor, he’s willing to lend me $7500 in cash on the understanding that I’ll send him a check when I get back to Boston. It’s just a reality of high stakes poker that people often need access to large sums of cash, and now to money on various online poker sites as well, and it’s infinitely easier to manage the logistics of moving this money among friends than to deal with the hassle and expense of wire transfers, getting to an off-Strip bank, or withdrawing from an ATM.

Poker friends can also help you raise money by staking you in a juicy game that’s beyond your bankroll. They reduce your risk by putting up some of the money you need. Then if you lose, they eat the loss, and if you win, they get a cut. In fact, I was up on the WSOP before I even got to Las Vegas as a result of buying 10% of a friend who has had a phenomenal run, making two final tables.

Of course there are scumbags who take advantage of people, borrow money they can’t or won’t pay back, and rip off their investors. But reputation spreads quickly, and these people can quickly be cut off from the world of poker financing. Because I have been an active and ethical member of the poker community for several years, I know many people who would lend me money in a pinch, stake me for nearly any tournament I wanted to play, or help me transfer funds between online poker sites. And there are plenty of people for whom I would do the same.

Last year, Eric Rosenblum, a lawyer from Merrick, N.Y., sold a $100 chip he picked up in the 1980s at the now defunct Desert Inn casino here for $20,000. Returning home from a vacation some 45 years ago, a Missouri woman, Sandy Marbs, threw a $1 chip from the Showboat Casino, once a Las Vegas mainstay, into her jewelry box. Last month, she sold it on eBay for nearly $29,000.