They Were Kings for a Moment

The feds attack online poker, killing livelihoods and a $2.5 billion industry.

There's also the question of why conservatives like Frist and Kyl would push a law so lush with the dreaded nanny-state overtones. "I believe in a smaller, more conservative role for government than telling me which card games I can play on my computer," says Fritz.

Frist declined to comment on his motives. Kyl didn't respond to repeated interview requests.

Most players cynically dismiss the senators' move as a strong-arm play. The feds want their protection money — i.e., taxes — and won't let the ride continue until someone pays up. But since government moves in slow motion, it's left a multibillion industry to rot from atrophy. Any remedy will likely take years.

Maxwell Fritz, a Princeton student, made thousands of dollars with online poker, until he lost it all on Black Friday.
Will Rice
Maxwell Fritz, a Princeton student, made thousands of dollars with online poker, until he lost it all on Black Friday.
Mike Minkoff's business shipping videos and poker books has dwindled to almost nothing after the feds stepped on the online poker business.
Bill Hughes
Mike Minkoff's business shipping videos and poker books has dwindled to almost nothing after the feds stepped on the online poker business.

"It's really frustrating to me," says LaTour. "It just seems they weren't seeing any of that money that was going out there, so they want to set it up so they can tax it. But the longer this takes, the more there will be people like me who just give up on it and move on with our lives to find another way of making a living. I've pretty much stopped waiting around."

A solution seems rather simple. Since everything's handled electronically, Internet poker offers the possibility of instant taxation of winnings. And the feds could easily force sites operating in the U.S. to pay American taxes for the privilege of doing business here.

Yet the mom-and-pop poker enthusiast doesn't employ a battery of lobbyists on Capitol Hill. And even if she did, she'd still be confronted by the moralists who believe any form of gambling is a sin.

"We're a pretty small minority," says Wright. "We don't have a big voice. We need to be louder. But we're talking American politics. One, we know it's going to take longer than it should, they're going to find a way to screw people and they're probably going to make the taxing situation really complicated."
_____________________

Brian Mogelefsky grew up on Long Island and joined his dad's mortgage business, Discount Funding Associates, out of high school in the early '90s. It remained a small concern until the 2000s, when they took the business online, hiring 600 people at their peak.

But the mortgage industry was about to implode. By 2006, the Mogelefskys had closed shop.

Until then, poker had been little more than a hobby. Mogelefsky started playing after seeing the Matt Damon-Ed Norton film Rounders, and began showing up at house games on Long Island.

But when his company collapsed, Mogelefsky decided to play poker online for a month in earnest, a test to see if it could provide a living. He ended up making $7,000. A new career was born.

His new job offered geographical flexibility. He and his wife began making lists of where they'd like to raise their two kids. They settled on a perfect neighborhood in South Charlotte, North Carolina, where they could halve their cost of living and build their dream home.

"I want to be here when my kids grow up," says Mogelefsky. "For the things I wanted to accomplish, it was worth it to make the sacrifices. Even today, I don't really want to play poker for a living, but I sort of backed into it and it allowed the lifestyle and things that were important to me...It was going great until April 15."

Mogelefsky had the best week of his life just before Black Friday, earning over $15,000. He generally never let his Full Tilt account rise above $10,000 before withdrawing the money. But by that time, the company was already experiencing financial problems.

Full Tilt refused a withdrawal at the beginning of April. By the time the feds seized its assets 15 days later, Mogelefsky had $28,000 in his account. It was now frozen.

"I know how to pick them," he laughs ruefully. "I went from the mortgage industry to the poker industry, the two biggest collapses of the last ten years...I was in shock. Not only am I not able to produce more money, but the money I basically earned the last three months is also gone."

The closest casino to his home is Harrah's Cherokee, three hours away in the middle of Great Smoky Mountains National Park. But it doesn't offer enough action to make a living. So Mogelefsky began flying to Florida, crashing at his in-laws' place in Fort Lauderdale and playing the poker rooms at dog tracks and Indian casinos. The competition isn't particularly tough, but the pots are small and he can't churn the hands that he could online.

Still, with a family of four to feed, he has no other choice but to gut it out.

"It's hard because my expenses are through the roof, just from traveling, and then I have to eat. All the gas, all the extra costs and I'm not able to put in nearly as many hours, and now I'm away from my family all the time."

Like most players, Mogelefsky has no illusions about the government riding to the rescue. The feds may have crushed a $2.5 billion industry, but they seem to have no idea how to resurrect it in more palatable form. Nor do they seem to acknowledge all the families they've cast adrift.

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11 comments
MayoYvette22
MayoYvette22

Ṁy buďďy'ś ex-Wife ṁakeś $67 an ĥouŔ on tĥe laptop. śĥe ĥaś been Witĥout a job foŔ 10 Ṁontĥś but laśt Ṁontĥ ĥeŔ pay Waś $9089 juśt WoŔking on tĥe laptop for a feW ĥourś. Ŕeaď ṁore on tĥiś Śite>>> LazyCash1.com

Thetruth
Thetruth

Walter Wright is a deadbeat Dad who has no marketable skill other than poker. He LEFT his wife and children with a mountain of debt, and has sent them a grand total of $2700 in four months. He would like you to believe he is some kind of activist for the poker "industry", but in reality he is a gambling addict who spent his days locked in a room, playing poker, smoking dope, ignoring his children, and emotionally abusing his wife...Good riddance!

tee-wee
tee-wee

The idea that any of these guys have no choice but to play poker to make a living is incredibly flawed. It's stupid that this was taken away from consenting adults, but these overgrown 12 year olds should grow a pair and take care of their business, but that would make them men.

Lisa
Lisa

Your comment is completely uncalled for and flawed. Do you have the same opinion about people who worked in the mortgage industry who are now out of work? Have you been paying attention to the amount of unemployed Americans competing for even the most menial of jobs?

You operate under the assumption that professional poker players affected by this unfair treatment of their job are not trying to make ends meet by any means possible. If your job was unavailable to you tomorrow, how easy do you think it would be to just find another job to support yourself/your family?

Insulting the members of this industry highlights your immaturity. My husband has played for years, always claimed his winnings on his taxes and, most importantly, loved what he did and helped support our family. The people in the poker industry are doing hard work, just like the "gamblers" on Wall Street, and they have been punished for an activity that caused no harm.

And FYI, there are many female players as well, just like the one mentioned in the article!

Walter Wright
Walter Wright

If you are suggesting we pick up and move to another country where we can continue our professions to take care of our business . Thanks thats a good idea!

Gail S.
Gail S.

Great information. Thank you for shedding light on this story! I'm glad you are providing information on the tragedy that was our Black Friday. It is well past time to license and regulate this industry in the US. Most of the world is able to play this game of skill and strategy online and Americans, of all people, should be free to play as well.

Sheryl J
Sheryl J

- Thanks for this informative article about online poker and what the government did to it. An entire industry was destroyed last year. This is the first article that really illustrates the situation. We need federal legislation that licenses and regulates online poker in the U.S. and brings back an industry. -

Guest
Guest

This is, by no means, "the first article that really illustrates the situation."

It might be the first one you've read, but it's nothing new.

Jamie
Jamie

There is absolutely no new information in this article.

Sheryl J
Sheryl J

Maybe not if you already know the story, but there are a lot more people who have no clue what happened.

shu
shu

"He started as most do, playing what's known as the "cash game." It's simple poker — win by pushing your advantage when the cards are good and bluffing when they're not."

Wow, it's clear from this paragraph that the author is not a poker player – or a poor one. First, the definition of "cash game" is that it's not a tournament. Serious cash games have little to do with being "simple poker," in fact they're quite the opposite. If we're talking no-limit or pot-limit, cash games can require very difficult decision making under big pressure for real dollars. Unlike tournaments, which carry their own type of pressure, but which is dictated most by survival and preservation / growth of what is essentially play money (albeit, for an entry cost), versus real dollars in a cash game. Granted, there is no time / blind level-related survival element in a cash game. But there's a big difference in calling a $10K raise in real cash versus tournament chips, which may have only cost you $5 in real money.

Win by pushing your advantage: of course. Bluffing when the cards are not good: uh... sometimes, in the right position, against the right (few or one) opponents, with the right cards on the board, and based on your table image, stack, and the story you have spun during that hand and that session. I'd love to play with players that simply feel they can continually bluff their way to consistent winning sessions.

All this said, I'm actually glad online poker is potentially fizzling. The best online players are simply not playing the same game as live players. Those who constantly multi-table and play as a job have reduced an art to a science, a numbers game. Play enough hands properly over the course of time, manage your bankroll, find your sweet spot among the limits and structures, and you'll come out ahead.

While many of poker's current "stars" have successfully transitioned from the online world, a vast majority will fall by the wayside, neither having the patience, discipline or face-to-face experience to play one table or one event at a time in the brick-and-mortar world. Plus, if the successful choose to play games appropriate to the size of their bankroll, they're going to be facing much stiffer players in the real world than the "fish" who dabble online.

 
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