|Want to send this page or a link to a friend? Click on mail at the top of this window.|
More: The Money Issue
|Posted June 16, 2006|
|CHAPTER 2: THE GAMBLER|
|WITH THE SPREAD OF INTERNET GAMBLING, RUNNING UP DEBTS IN THE DORM ROOM HAS BECOME A COLLEGE PASTIME. TRYING TO COVER HIS LOSSES, ONE SOPHMORE AT LEHIGH UNIVERSITY WENT SO FAR AS TO ROB A BANK.|
Illustration by R. Kikuo Johnson
GREG HOGAN JR. was on tilt. For months now, Hogan, a 19-year-old Lehigh University sophomore, had been on tilt, and he would remain on tilt for weeks to come. Alone at the computer, usually near the end of one of his long online gambling sessions, the thought "I'm on tilt" would occur to him. Dude, he'd tell himself, you gotta stop. These thoughts sounded the way a distant fire alarm sounds in the middle of a warm bath. He would ignore them and go back to playing poker. "The side of me that said, 'Just one more hand,' was the side that always won," he told me months later. "I couldn't get away from it, not until all my money was gone." In a little more than a year, he had lost $7,500 playing poker online.
"Tilt" is the poker term for a spell of insanity that often follows a run of bad luck. The tilter goes berserk, blindly betting away whatever capital he has left in an attempt to recoup his losses. Severe tilt can spill over past the poker table, resulting in reputations, careers and marriages being tossed away like so many chips. This is the kind of tilt Hogan had, tilt so indiscriminate that one Friday afternoon this past December, while on his way to see "The Chronicles of Narnia" with two of his closest friends, he cast aside the Greg Hogan everyone knew class president, chaplain's assistant, son of a Baptist minister and became Greg Hogan, the bank robber.
On Dec. 9, 2005, Hogan went to see "Narnia" with Kip Wallen, Lehigh's student-senate president, and Matt Montgomery, Hogan's best friend, in Wallen's black Ford Explorer. Hogan, who was sitting in front, asked Wallen to find a bank so he could cash a check, and Wallen pulled over at a small, oatmeal-colored Wachovia. Inside, Hogan paused at the counter for a moment and then joined the line. He handed the teller a note that said he had a gun, which was a bluff. "Are you kidding?" her face seemed to say. He did his best to look as if he weren't. With agonizing slowness, she began assembling the money. Moments later, a thin sheaf of bills appeared in the tray: $2,871. Hogan stuffed it into his backpack, turned around and walked back out to the car.
Wallen drove on to the theater, unaware of what had just happened. The three friends were soon settling into 135 minutes of "Narnia." Hogan found he couldn't concentrate on the movie. He was certain that he'd seen someone writing down the license of Wallen's Explorer outside the bank. He wondered what his father's congregation back in Barberton, Ohio, would say when they heard what had become of their pastor's eldest son.
The movie ended, and the trio returned to campus. Hogan went immediately to Sigma Phi Epsilon, his fraternity, and used some of the stolen money to pay back brothers who had lent him hundreds of dollars. He then joined a few friends at an off-campus pizzeria for dinner. Someone's cellphone rang, with the news that police had stormed the Sig Ep house. No one knew why. Hogan stayed silent. After dinner, his friends dropped him off at orchestra practice. Allentown police officers were waiting for him. They handcuffed him and took him to headquarters, where he confessed almost immediately.
Hogan's first call was to his parents back home in Ohio. They had just finished eating dinner at T.G.I. Friday's. "He was at the end of himself," Greg Hogan Sr. told me. "He couldn't believe he had done it. Not that he was denying anything, but he felt like he was watching another person's life."
To wired college students today, Internet gambling is as familiar as beer, late-night pizza and the Saturday night hook-up. Poker particularly Texas hold 'em is the game of choice. Freshmen arrive already schooled by ESPN in the legend of Chris Moneymaker, the dough-faced 27-year-old accountant who deposited $40 into his PokerStars.com account and parlayed it into a $2.5 million win at the World Series of Poker in Las Vegas. Throughout the dorms and computer labs and the back rows of 100-level lecture halls you can hear the crisp wsshhp, wsshhp, wsshhp of electronic hands being dealt as more than $2 billion in untaxed revenue is sucked into overseas accounts each year.
Researchers say that Internet poker is addictive. Players say that it's addictive. The federal government says that it's illegal. But colleges have done little to stop its spread on campus. Administrators who would never consider letting Budweiser install taps in dorm rooms have made high-speed Internet access a standard amenity, putting every student with a credit card minutes away from 24-hour high-stakes gambling. Online casinos advertise heavily on sites directed at college students like CollegeHumor.com, where students post pictures of themselves playing online poker during lectures with captions like: "Gambling while in class. Who doesn't think that wireless Internet is the greatest invention ever?" Some schools have allowed sites to establish a physical on-campus presence by sponsoring live cash tournaments; the sites partner with fraternities and sports teams, even give away a semester's tuition, all as inducements to convert the casual dorm-lounge poker player to a steady online customer. An unregulated network of offshore businesses has been given unfettered access to students, and the students have been given every possible accommodation to bet and lose to their hearts' content. Never before have the means to lose so much been so available to so many at such a young age.
An estimated 1.6 million of 17 million U.S. college students gambled online last year, mostly on poker. According to a study by the Annenberg Public Policy Center, the number of college males who reported gambling online once a week or more quadrupled in the last year alone. "The kids really think they can log on and become the next world champion," says Jeffrey Derevensky, who studies youth problem gambling at McGill University in Montreal. "This is an enormous social experiment. We don't really know what's going to happen." Skip to next paragraph Magazine The Money Issue America's scariest addiction is getting even scarier. Go to Special Issue
»Greg Hogan is far from the only college student to see the game's role in his life grow from a hobby to a destructive obsession. Researchers from the University of Connecticut Health Center interviewed a random sample of 880 college students and found that 1 out of every 4 of the 160 or so online gamblers in the study fit the clinical definition of a pathological gambler, suggesting that college online-poker addicts may number in the hundreds of thousands. Many, like Lauren Patrizi, a 21-year-old senior at Loyola University in Chicago, have had weeks when they're playing poker during most of their waking hours. Rarely leaving their rooms, they take their laptops with them to bed, fall asleep each night in the middle of a hand and think, talk and dream nothing but poker. By the time Patrizi finally quit, the game seemed to be both the cause of all her problems and her only means of escaping them. "I kept on playing so I wouldn't have to look at what poker had done to my bank account, my relationships, my life," she told me.
Other addicts, like Alex Alkula, a 19-year-old living outside Columbus, Ohio, decide to "go pro," drop out of school and wind up broke and sleeping on their friends' couches. Alkula, who left the Art Institute of Pittsburgh after five months, now makes his living dealing hold 'em in private home games and organizing tournaments in bars. Having overdrawn four bank accounts, Alkula can no longer play online himself. But when he gets home from work at 3 or 4 in the morning, he turns on his computer, clicks on Full Tilt Poker and watches the players' cards flicker on the screen until dawn. "I can't get away from it," he told me. "And really, I don't want to. I'll keep playing poker even if it means being broke for the rest of my life. I've fallen in love with the game."
In its outline, Hogan's story closely resembles that of the stereotypical compulsive gambler. Before the rise of online poker, however, such a story typically involved a man in his 30's or 40's and took a decade or more to run its course. Greg Hogan, on the other hand, went from class president to bank robber in 16 months. His fall took place not at the blackjack table or the track but within the familiar privacy of his computer screen, where he was seldom more than a minute away from his next hand of poker. He'd been brought up too well to waste himself in some smoky gambling den and knew too much to play a mere game of chance. He wanted to compete against his peers, to see his superior abilities yield dollars for the first time, a transaction he equated with adulthood. His stubborn faith in his own ability a trait that had served him so well through his first 19 years proved to be his undoing.
COLLEGE ADMINISTRATORS WHO WOULD NEVER CONSIDER LETTING BUDWEISER INSTALL TAPS IN DORM ROOMS HAVE MADE HIGH-SPEED INTEREST ACCESS A STANDARD AMENITY, PUTTING EVERY STUDENT WITH A CREDIT CARD MINUTES AWAY FROM 24-HOUR HIGH-STAKES GAMBLING
Today's ruined gamblers are often too young to know any better too young, in fact, to legally gamble in most U.S. casinos. Until now, these young addicts were ignored by the news media, which swooned over the top of the poker pyramid, the Chris Moneymakers and the ESPN heroes, the guys in the wraparound sunglasses and the cowboy hats who made the hustler's art seem somehow noble and athletic. No one was interested in whose losses keep the poker economy humming, not until a Baptist minister's son robbed a bank.
A MINISTER'S ELDEST BOY learns to perform early in life. On Sundays, Greg's mother, Karen, would dress him and his two brothers in matching slacks and blazers and take them and their sister to hear Greg Sr. preach. The congregation looked on as the boys followed Greg Jr.'s polite, attentive example. Schooled at home through eighth grade, the straw-haired, blue-eyed boy emulated his father's steady gaze, the soft but firm quality in his voice. He saw that others would come to rely on him if he revealed only his strongest side. When Greg Sr. ran for City Council, Greg Jr. enlisted his playmates to help him campaign door to door. Neighbors began calling Greg "the General." When it came to music, Greg was like a boat on a still pond one small push from his parents and he'd glide on toward the goal. Karen, a psychiatric nurse, started him on the piano at 5. Greg Sr. worked a second job to help pay for $50-an-hour private music lessons for his daughter and three boys. By 13, Greg had twice played onstage at Carnegie Hall. Music won him a scholarship to the prestigious University School, a day school outside Cleveland, where his classmates noticed his oddly mature ways and dubbed him "the 30-year-old man." By graduation, he'd developed something of an ego. "Greg will always be a people person," wrote his adviser in an evaluation letter. "Perhaps he should set his sights a little lower and just become president of the United States."
For college, he chose Lehigh, a school of 6,600 overlooking Bethlehem, Pa., across the river from Allentown, the crumbling county seat, which has pinned its hopes of revival on a new slots casino set to open by 2008. Lehigh's campus is laid out like a Swiss ski village. Long, winding roads curve up past the library and the chapel to the giant Greek houses, the centers of the campus's social life. Scattered among them are parking lots filled with Nissans, Infinitis and a smattering of Audis, BMW's and Hummers. Text messages fly between cellphones, lighting up with news of which parties are still live and which have been shut down, as many have been since Lehigh was recently named America's No. 3 party school by The Princeton Review. Fraternities now post sentries outside their houses on weekend nights, with the threat of a raid generally intensifying the partying within.
Hogan, who had palled around with the sons of bank executives at his high school, threw himself into this new environment. Even before his father had said goodbye to head back to Ohio, Greg announced his plan to run for class president. He played his first hands of live hold 'em with real money that night, a way to break the ice with the guys from his hall in the dorm lounge.
A few weeks later, guided by one of his roommate's friends, Hogan opened his first online-poker account at PokerStars.com. He chose a screen name that would carry his new school's banner all around the world: geelehigh. He'd met someone from two floors down who had lost $100 a fortune, it seemed online. He decided to stick to the play-money tables. Within 10 minutes, Hogan was playing his first online hands. A few days later he met another friend of his roommate's. Hogan claims that he remembers only his nickname, Phys. When he turned 21, Phys told Hogan, he would plunk down $10,000 and become the youngest player ever to win poker's greatest prize the World Series of Poker No Limit Texas Hold 'Em bracelet. He then showed Hogan where he planned on getting that kind of money. He clicked on the PokerStars icon on Hogan's computer, typed in a user name and password, clicked on "Cashier." And there it was, Phys's "real money" balance: more than $160,000. Hogan clucked his tongue. "Un-be-lievable," he said, almost to himself. He knew that the money was indeed real. All Phys had to do was click on the "Cash Out" button and wait two weeks, and he'd receive a six-figure check in the mail. Four years' tuition, sitting there like a high score. It was absurd.
The next week, geelehigh used his debit card to make a $75 PokerStars deposit. He received a $25 "deposit bonus," which wouldn't clear until he'd played several hundred hands. The money was real now, but it still felt as ephemeral as it did at the play-money tables: $100 was a digitized chip icon, an oval of black pixels on his computer screen. Green ovals were $25, red ovals $5. All were smaller than a grain of rice. When Hogan clicked on the "Bet" or "Raise" buttons, the chips made a chik sound and floated across the glowing table before melting into the pot. These tiny digital chips represented money controlled by a corporation in Costa Rica. The "cards" themselves were really just bits of data, "shuffled" by a random-number generator on a Mohawk Indian reservation in Quebec. The nine players at Hogan's table were scattered all over the world, each sitting alone at his screen, trying to take money from the other eight. Eventually, in chunks of $50, then $100, he took two summers' earnings, money his parents had given him for books and expenses, hundreds of dollars in loans from friends, $2,000 in savings bonds bought in his name (bonds he took from the family safe) and turned it into digital chips: $7,500 in all.
Online, Hogan would play 60 to 100 hands an hour three times the number of his live games. There was no more shuffling between hands, no more 30-second gaps to chat with his friends or consider quitting. Each hand interlocked with the next. The effect was paralyzing, narcotic. "Internet poker induces a trancelike state," says Derevensky, the McGill professor, who once treated a 17-year-old Canadian boy who lost $30,000, much of it at PokerStars. "The player loses all track of time, where they are, what they're doing." When I spoke with an online hold-'em player from Florida who had lost a whopping $250,000 online, he told me: "It fried my brain. I would roll out of bed, go to my computer and stay there for 20 hours. One night after I went to sleep, my dad called. I woke up instantly, picked up the phone and said, 'I raise.' "
The money that poker players win and lose comes from bets made by other players. The house makes its money from the "rake," a small commission (usually between 2.5 percent and 5 percent) taken out of every pot. To be a long-term winner, you have to take money away from the other players faster than the rake takes it away from you, a feat accomplished by 1 in 10 poker players at the most. The other 90 percent wind up losers. The worst of these losers are known as "fish," players who are so new to poker that they haven't yet realized how much they have to learn.
A raked poker game cannot survive unless some players either overestimate their abilities or are willing to keep playing despite consistent losses. Fish, then, are the chum that keeps the rest of the poker ecosystem alive. Poker message boards monitor which sites are teeming with geelehighs and which have been leached dry. To stay in business, sites must attract fish, hold them for as long as possible and replace them when they go broke. According to Mike Shichtman, a professional gambler who consults for the online site Pacific Poker, there is "giant concern" in the industry that the total number of fish may be dwindling. It is, he adds, a trend that can be reversed only by tapping new markets.
In a few weeks, Hogan had run his initial $75 up to $300. Then, in November, came "the hand that got me hooked." Hogan drew a king-high flush and bet all $300. When his opponent called the bet and showed his ace-high flush, Hogan felt an impotent rage that broke on his forehead and coursed through his body. Tilt. He cursed, shut down the program in disgust and vowed never to play online again. Four days later, however, he felt the traces of an urge as visceral as the need to eat.
Hogan was craving "action," the gambler's drug. "Getting action" is the act of placing a bet; being "in action" is the high that follows, a state of arousal that neurologists have likened to doing a line of cocaine. Blood rushes to the face, the hands moisten, the mouth dries up. Time slows down to a continuous present, an unending series of build-ups and climaxes. The gains and losses begin to feel the same. Action had already appeared intermittently in Hogan's life when he cheered the Ohio State Buckeyes through the last seconds of overtime, when his father called him with Lehigh's admissions decision in hand. Poker gave him the same rush whenever he wanted it, for hours on end.
Most winning poker players are either immune to the action rush or know to keep their cravings in check: they fold between 60 and 80 percent of their hands without making a single bet. When the desire for immediate action overrides the desire to hang onto one's money, players will tilt, playing too many hands and putting in too many bets, even when it's apparent that they have little chance of winning. "Trying to win money with lucky cards" is how Hogan remembers it. Lacking the equanimity to deal with clusters of bad luck and "cold," unplayable cards, he fell into a vicious cycle of increased losses and erratic play.
Back in Ohio, Hogan's October bank statement arrived with two $50 PSTARS withdrawals. His father called, asked why he'd waste money like that. Greg promised to stop. He played again that day. He had not and would not read any of the half-dozen books that together give a rough grasp of how hard hold 'em is to master. He had no idea that many of his opponents were self-styled professionals using a special program called Poker Tracker to analyze betting patterns and seek out fish like geelehigh. There were always some of these pros online, some playing 8 or 12 tables at once to leverage their advantage. They were waiting for him the night Lehigh's football team lost to rival Lafayette, when Hogan, who'd organized a cheering section, felt a little down and once again pushed aside his father's warnings. They followed him home over Thanksgiving weekend in November 2004, where, amid the clutter of his father's small basement office, he watched the World Series of Poker on TV, never changed out of his pajamas and played online for 10 hours a day. He lost $1,500, every penny he'd taken to school with him. Upstairs, the Hogans wondered what was wrong with their son.
"It's just play money, Dad," he told his father, who learned the truth when an overdraft notice arrived from Greg's bank. Greg Jr.'s phone rang the moment he returned to Lehigh. It was Greg Sr., who reminded Greg that the $1,500 had come from friends and relatives who didn't give it to him so he could gamble it. Hogan, distraught, e-mailed Phys and begged him to cover the loss. Phys agreed, so long as Greg would stop playing. "You're a fish," he said. "You need to stop."
Greg had begun to daydream about poker during student-council meetings, at orchestra practice, whenever he had a free moment. Soon, Phys's $1,500 had melted away. Hogan's parents arranged for him to meet with a Lehigh counselor. He was told that live poker was harmless but to stay away from online. For a time, the counseling worked. Hogan did not gamble during spring semester. But that summer, back at home in Ohio, Hogan was checking up on his friends at Facebook.com when he saw a PartyPoker ad: make a $50 deposit, get a $50 bonus. He'd been coveting a red Jeep and remembered the times he'd run $100 up to $500. Ten $500 sessions, get the Cherokee, don't tilt and quit. And he did win, at first. Then, as always, his opponents began to outmaneuver him. "I kept going back online, depositing another $50, winning, withdrawing," he recalls. "It happened a few times, but then I wouldn't be withdrawing. And then I'd just keep putting money in 'cause I kept losing."
In July, at his parents' behest, Hogan attended a few Cleveland-area Gamblers Anonymous meetings, which proved handy when a friend took him to a Canadian casino to play live poker. He found it easy to play a disciplined game under the appraising eyes of older strangers and won $500. The G.A. meetings had taught him to recognize the fish at the table. Except for the one sitting in his seat.
Back at Lehigh that September, Hogan sometimes found himself shoehorning counseling meetings between online-poker sessions. To his friends and professors he was a terrific success, the easygoing leader who organized landscaping projects around the Sig Ep house and hobnobbed with Lehigh's wealthy trustees at dinner parties. But to his parents, his situation was growing desperate. Hogan had reneged on his promise to attend G.A. meetings in Bethlehem. Withdrawals and overdrafts continued to appear on his bank statements. "I really don't want to do this anymore, but I don't know how to stop," Greg told his father. Greg Sr. then made the six-hour drive from Ohio to install a $99 program called GamBlock on his son's computer. Highly regarded among gambling counselors, GamBlock makes it impossible for users to access any Internet casinos. (The company's founder, David Warr, says that half of his customer base, which he will only put in the "thousands," is connected to a college or university.)
Hogan soon found a way to circumvent GamBlock, gambling by night in the library's computer lounges. "It was funny to see how many other kids were playing," he says. "By this point I didn't really care so much who saw me." Greg Sr. realized what was happening and asked the administration to lock poker sites out of the public terminals. He says he was told that nothing could be done. As November approached, the wall Hogan had built between his Lehigh life and his poker life had begun to crack. He would borrow $100 or $200 from his fraternity brothers and fail to pay them back by his self-imposed deadlines. He would skip classes and meetings for long binges in the fraternity lounge, gambling through the night and catching a few hours' sleep before noon. People he hardly knew were asking him what was the matter. On Oct. 19, when a fellow Sig Ep sent the house an e-mail asking if anyone wanted to try to hit a record Powerball jackpot, Greg sent this reply, a message that went to all 60 of his brothers: "O what the hell, maybe my bad luck can change??? Please God??"
The end came quickly, a weeklong series of 14-hour binges at the end of November. "There was very little thinking," he told me. "I'd get up and lose it. Get up, make another deposit, lose it again. As soon as I lost, I had to get more money in my account immediately. My whole body was shaking as I waited for the program to load, I wanted to play so badly." On Nov. 30, 2005, he lost the last $150 in his account during a six-hour session in the Sig Ep lounge that ended when a friend told him dinner was ready. "I was up about $500, and I was like, 'I'll play two more hands,' " Hogan says. "Then one more hand, and one more after that. And in those last three or four hands, I lost it all. All the muscles in my body gave way." He fell asleep, completely broke. All his poker accounts were at zero. His checking account had a negative balance. At the Sig Ep winter social, the fraternity treasurer told Hogan he would be kicked out if he failed to come up with $200 in social fees. Having bailed him out twice before, Greg's parents refused to give him the money and were considering pulling him out of Lehigh altogether. Hogan spent the next week wandering around the Sig Ep house in a daze, skipping classes and drinking himself into a stupor each night.
"It was the weirdest thing I've ever experienced in my life," he said. "Like an out-of-body experience. I was watching myself walk around. Watching myself go and eat food. Watching myself take a shower, but not actually doing those things. I remember looking in the mirror, and it was not me I was seeing in the reflection."
The night before the bank robbery, Greg spoke with his father one last time. Greg Sr. remembers what he heard in his son's voice. The tiredness. The lack of presence.
"Greg," he asked, "are you gambling?"
Greg said what he always said.
"Nah, Dad. It's been a while since I've done any of that."
Greg Sr. had gotten used to his son's half-truths, the "wishing out loud," as he calls it. He knew it was useless to press further.
"O.K., Gregory. I love you. Good night."
I MET GREG HOGAN JR. for breakfast one morning this spring, at a diner a few miles from Lehigh. (As Hogan was in the process of negotiating a plea with the county's D.A., I agreed to ask him only about poker and refer all questions about the day of the bank robbery to his attorney.) He had recently completed an inpatient gambling-treatment program in Louisiana, where he wasn't allowed to have more than $5 on him at any time. "I haven't played a hand of poker in 90 days," he said, with a recovering addict's confessional cheer. He is 20, but his jowly face and all-business baritone make him seem much older. Take away the American Eagle shirt and the Ohio State Buckeyes cap and he'd resemble a young, pale Harry Truman.
Beside us sat Greg Sr. and Karen, still fuming over media accounts that they are "affluent." On the contrary, they have scrimped to put children through college. After paying Greg's treatment costs, legal fees and bank debts, they expect to be out $35,000. Hogan's lawyer has been fielding calls from bookers at "Oprah," "Montel" and "Good Morning America," all drawn in by the irresistible "good kid robs bank" story.
With the spring semester well under way, the shock of Hogan's arrest was already beginning to fade from the memory of Lehigh students. Sigma Phi Epsilon has been using humor to heal the fresh wound, throwing a party where drinks were served from behind a barrier made up to look like a bank counter. The satirical "Lock Up the Poker Thief" Facebook group has 58 members and counting. As for Greg's friends Kip and Matt, prosectors say they do not believe they knew anything about the robbery, and they do not face any charges. Meanwhile, a Lehigh spokeswoman told the Allentown newspaper The Morning Call that the school does not have a gambling problem, its only official response to date. And yet in Lehigh's libraries and dorms, the wsshhp, wsshhp, wsshhp never stops.
Some $60 billion was bet last year in online poker games, two-thirds of which came from the United States. The vast majority of this money moves from player to player. About $3 billion wound up as revenue in the form of rake, a figure that is growing by about 20 percent per year, making poker the fastest-growing segment of the $12 billion online-gambling industry. Unlike their brick-and-mortar counterparts, online casinos don't have to pay for dealers, free drinks or air-conditioning, and they enjoy profit margins as high as 60 percent.
There are more than 400 online card rooms operating today, offering every variety of poker game and every level of stakes. Hold 'em, the most popular game, can be played for anywhere from pennies to tens of thousands of dollars a hand. Like pornography before it, gambling is shedding its stigma, transitioning from the black market to Wall Street, from a back-room vice to ubiquitous "content." PartyGaming, the largest operator, is valued at about $10 billion on the London Stock Exchange. Its shares are held by Goldman Sachs, Merrill Lynch and other top Wall Street firms. Five years from now, if the plans of PartyGaming and other Internet casinos come to pass, consumers will be able to place bets on their cellphones and P.D.A.'s while waiting for a table in a restaurant.
The public visibility of online-poker seems to be growing as fast as its revenues. Calvin Ayre, the globetrotting founder of the online card room and sports-betting site Bodog.com, spends $50 million a year promoting himself and his company as a Hefner-like lifestyle brand. He has run ads in Esquire and Vice magazine and on Gawker Media's sites in which Ayre himself often appears as a dapper, rakish bachelor, personally embodying both the new poker wealth and the rewards his younger customers hope the game might bring. The image has caught on this March he appeared on the cover of Forbes's Billionaires issue.
While the Department of Justice maintains that online poker violates U.S. laws, not a single player or site has been indicted, and online gambling remains as available as pirated music. To shut down Internet gambling, the D.O.J. would either have to start monitoring what we download from the Internet or raid legal, licensed businesses in Antigua, Britain, Costa Rica and other countries where it has no jurisdiction. The D.O.J. has succeeded in persuading some credit-card companies to stop financing online-poker accounts, but this hasn't stopped the flow of rake overseas. U.S. players simply move funds through offshore third-party "e-wallets" like Neteller and Firepay, which charge a small fee and then pass the money on to the sites.
|RICH Earned about $400 in his career as a heavyweight boxer: K.O.D. Declared bankruptcy in 2003, intending to repay $23 million in debts ($13.4 million of it unpaid taxes) with proceeeds from future bouts. Out boxing in 2005. Still more than $20 million in debt.|
"The Department of Justice takes the position that online poker is illegal," says the former U.S. attorney Jim Martin, who led the first phases of the department's campaign against online-gambling advertising. "But I don't think they have much of a motive to go after individual bettors at all."
Analysts say that online gambling's gray legal status allows operators to avoid paying more than $7 billion a year in federal taxes. And $7 billion is a lot of tax money to leave on the table nearly half of NASA's budget for next year. It's probably too much for this ambiguous state of affairs to continue for much longer. Late last month, the House Judiciary Committee approved a bill introduced by Representative Bob Goodlatte that would make it harder but far from impossible for players to move their money offshore, while leaving the question of domestic online gambling to the states. With Congress unlikely to pass any law authorizing federal oversight of our online activities, Internet gambling's near future appears as healthy as illegal downloading's. In the long term, the federal government's response is likely to resemble either its response to tobacco, with high taxes and more rigorous controls over marketing and access to young people, or to marijuana, a costly and mostly fruitless campaign to eradicate a demand-driven business by cutting off the supply.
With plenty of disposable income and spare time, college students constitute one of the gambling industry's most coveted demographics. "We've been surprised by this natural, organic groundswell of demand from the college audience," says Jason Reindorp, marketing director for AbsolutePoker.com, which gave away a semester's tuition to the winner of a college-only online tournament and promoted its Web site at halftime during N.C.A.A. basketball tournament games. Like many sites, AbsolutePoker.com enlists players in multilevel marketing programs. Known as "affiliates," players are rewarded with a $75 bonus or a percentage of the rake each time they find AbsolutePoker a new customer. Reindorp says that AbsolutePoker relies on students to make sure all this jibes with campus policy. "The student audience is very responsible," he says. "They know how to avoid getting into trouble by breaking their school's rules, just like they know how to avoid playing beyond their means."
L osses as high as $7,500 are rare on today's campus poker scene, but they are by no means extraordinary. One evening I stopped in for a snack at Pacific Smoothie, a shop two blocks away from Lehigh's main entrance, where by chance I met Ross Johnson, a junior wearing flip-flops and sunglasses who looked as if he'd stepped off the page of a J. Crew catalog. Like most online-poker players, Ross says he knows a few fish personally but does not consider himself one. "I still play," he said, "but I've cut back. I used to play too much. I mean, I'm definitely ahead in the long run, but I've lost $2,000, easy, on a single hand before, and made like $4,000 or $5,000 in a single night."
I'd heard the same from almost every online player I'd spoken with: I lose big, I win big, but at the end of the day, I come out ahead. Johnson did know one losing player who'd lost several thousand dollars and had to take a $6.25-an-hour job at this very smoothie shop to pay for his books.
Johnson said Hogan never had much of a reputation among Lehigh's hard-core poker players. "The funny thing is, he wasn't even in that deep," he told me. "Five thousand is nothing. I know whole halls full of kids who play the thousand-dollar buy-in No Limit tables. If everyone did the same thing when they lost five large," he added with a chuckle, "well, there'd be a lot more bank robberies."
Mattathias Schwartz founded The Philadelphia Independent, a monthly newspaper. He writes for Philadelphia magazine and other publications.
Copyright 2006 The New York Times Company. Reprinted from The New York Times Magazine of Sunday, June 11, 2006.
|Wehaitians.com, the scholarly journal of democracy and human rights|
|More from wehaitians.com|