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Poker Back In the USA

Ultimate Poker Leading The Way

by Card Player News Team |  Published: Apr 03, 2013


There is an image people have of Antonio Esfandiari. It’s a wonderful image. People stop him in casinos to ask about it all the time. It’s the sight of Antonio celebrating with his dad after he won $18 million in the Big One for One Drop last July.

The image is more than simply about winning the largest professional poker tournament purse ever — the kind of money that LeBron James receives from the Miami Heat over a single season or what Floyd Mayweather might bring home after a mega-fight. It’s one of those magic moments in which the emotions that are usually invisible between a father and a son become clear for the world to see.

A man from Iran comes to the United States with his two boys and the hope of a better life. One of the boys sees a magic trick, becomes fascinated with a deck of cards, falls in love with poker at first sight, persists at it even after his father punishes him for playing, and after years of honing his game goes on to win the game’s biggest professional tournament ever. America’s favorite Pastime meets The American Dream.

A national television audience sees Antonio’s moist eyes behind black-rimmed glasses, the hug he gives his father and the kiss on top of his dad’s bald head. It sees his father offering his proud approval — yes, yes, Antonio, it’s okay for you to play poker — while the son promises his father the $350,000 winning bracelet.

Those who saw the moment will always remember it. But very shortly, they’ll have an additional image of Antonio Esfandiari. That’s because Antonio Esfandiari will soon become the face of Internet poker in the U.S.A. — legalized Internet poker in the U.S.A.

Legalized Internet poker is coming sooner than most people realize. At the end of February, Nevada Governor Brian Sandoval signed into law Assembly Bill 114, allowing his state to move forward with online poker. In the beginning of March, New Jersey Governor Chris Christie signed a bill authorizing not only online poker in his state, but also a full-suite of Internet casino games. It’s clear that Delaware, Iowa, Pennsylvania, California and more than 15 other states are poised to follow with some form of Internet gaming in the near future.

The time for conjecture and speculation is over. Regulation and sanctioning of online poker is now unfolding state-by-state, and legal online gaming will quickly be upon us. Once it is, there is bound to be a resurgence of the energy and interest in poker that we saw before offshore Internet sites like PokerStars, Full Tilt and Absolute Poker were shut down a couple of years ago by the U.S. federal government on Black Friday.

Anybody who reads this magazine probably remembers where they were when they heard news of the indictments on Friday, April 15, 2011, the way others remember where they were when President Kennedy was shot or Neil Armstrong took his first step on the moon.

Many Internet poker players who couldn’t cash out once the sites were shuttered were left cursing at the moon as hundreds of millions of dollars seemed to disappear into cyberspace. Others lost jobs that were built off the television shows generated by the money running through the sites. Still others simply lost their preferred way of playing the game that they loved.

Black Friday caught Esfandiari as unexpectedly as anyone else. But the full effects of Black Friday became apparent to him only over the last couple of years, as he saw the damage done to the industry play out like a row of falling dominoes.

“I was approached to invest in Full Tilt Poker before the site even went live,” says Esfandiari. I wasn’t going to be the guy out on the front lines. I would have been one of 16 or 20 guys representing Full Tilt.

“But I didn’t go ahead with it. As you can imagine, I regretted that decision big time for many years. I was so hurt every time I saw Full Tilt or heard somebody even mention it. Full Tilt seemed to be printing money, and I’d think: Oh, man, I could’ve had a piece of that company. I really wasn’t even thinking so much about the legality at the time. It was so out in the public and open that it kind of felt like it was legal. Nothing was being done about it. So it just felt normal to everyone.

“When Black Friday came along, I thought: Shit. This is not good for poker. I hope everybody gets their money back. Then I thought: Of course, everybody’s going to get paid back their money! No question about it . . .

“Turns out the people in charge of Full Tilt didn’t know how to run a company and didn’t have the money to pay everyone back. Then there was the whole Phil Ivy lawsuit against Full Tilt. I didn’t even know what was going on with that situation. But I was glad I’d kept my distance and had nothing to do with Full Tilt.

“Even though I would’ve made money, I wouldn’t be comfortable knowing that all those people got burned and had to suffer through all that drama and nonsense. There’s no amount of money that makes dealing with that worthwhile.”

Eight months after Black Friday, the Department of Justice opened the door to change by shifting its stance on the Wire Act of 1961. The agency ruled that the law, which prohibits betting through telecommunications that traverse state lines or foreign borders, pertains only to sports betting.

This adjustment set the stage for individual states to legalize gaming online. Many states, burdened with debt after the recession, began to look at the tax revenues that could be generated through online poker, and it wasn’t long before land-based casinos, Indian reservations and even state lotteries began to gear up.

The question, for Antonio and everybody else, was: How was it going to be done right this time?

It was in this space that Esfandiari came together with Tom Breitling — one of the founders of Ultimate Gaming.

Breitling had his own American Dream story.

He’d driven into Las Vegas to partner up with a friend shortly after college in a broken down Honda with $100 in his wallet. A little more than a decade later, he and his partner, Tim Poster, had made a hundred million dollars twice, and he’d written a book about it called Double or Nothing.

There were many keys to the duo’s success. One of them was timing. Poster had started a hotel reservation company in Las Vegas in an office with a desk, a chair, a pillow and a telephone shortly after Steve Wynn opened up The Mirage with its erupting volcano in Las Vegas in the late Eighties. The Mirage was the first major property built on The Strip in more than a decade and a construction boom of themed hotels followed.

It was the perfect time to sell discounted hotel rooms. But the company Poster started grew exponentially after Breitling helped install one of the travel industry’s first websites. In 2000, the company that was started with a desk, a chair, a pillow and a telephone was sold to Expedia for $105 million.

Breitling and Poster took that money and put it down on Poster’s dream — he’d always wanted to own a casino. They bought the storied Golden Nugget in downtown Las Vegas while every new hotel being built seemed to be configured around the Statue of Liberty, the Eiffel Tower, a circus or other corporate concepts. It wasn’t buildings that made people happy, the duo figured, it was people who make people happy. “Tom and Tim” tried to take Vegas back to a day when the owners could be seen laughing and dealing cards to their players.

They brought in Tony Bennett, televised poker tournaments and signed on with Mark Burnett to do a reality television show. They nearly got taken down by a whale on a $25 million winning streak, then were making expansion plans when they were offered $100 million more for The Nugget than they’d paid for it a year earlier.

Breitling identified online gaming as his third big play.

“Gambling is nearly a $350 billion market worldwide,” he said. “Less than 10 percent of that business is online right now. I believe that over the next two decades there is going to be a major shift. And my company is going to be at the forefront of that shift.
“All you have to do is look at the numbers.

There are more than 90 million smart phones in the US,” he continued. “Aside from email and browsing the Internet, playing games is the top activity. Two thirds of all users play games, and poker has long been one of America’s favorites. There is no doubt that the popularity of online poker is going to go through the clouds now that it’s legal.

“The key is to have it regulated properly, to put out the best product and to run the company with full transparency.

“It all comes down to trust. That’s one of the reasons why we reached out to Antonio. You can see how seriously he takes poker, even by the grueling physical workouts he puts himself through to prepare for tournaments. He lives and breathes the game, but he also brings fun to the party — which is exactly who we are as a company.”

If it’s one thing Breitling understands, it’s partnerships. The “Ultimate” in Ultimate Poker and Ultimate Gaming is related to the “Ultimate” in the Ultimate Fighting Championships, better known as the UFC.

Breitling’s partners at Ultimate Gaming are Frank and Lorenzo Fertitta, who run the UFC and the 17 properties of Station Casinos.

“The Fertitta brothers obviously know what they’re doing when it comes to anything business oriented,” said Esfandiari. But their background in land-based casinos and the UFC seems uniquely suited to the needs and obstacles of online gaming.

“One thing that cannot be lost as we look forward is the underlying connection casinos have with their customers,” says Mark Lipparelli, former Chairman of the Nevada State Gaming Control Board. “It comes down to one word: trust. People may feel a little jilted when they lose at the table. But there’s a great sensibility among casino customers that when they enter a casino they’re getting a fair shake. They know that the odds are stacked against them, but they understand that they’re not being cheated. It’s a gamble, but it’s a fair gamble. This trust has been built up over a half century, and part of this trust is rooted in strict regulation. This trust cannot be compromised under any circumstances as we go online.”

Regulation of online gaming will be a key issue — especially if Congress doesn’t step up and mandate the highest standards across the board for all 50 states.

If a state-by-state regulatory and licensing approach prevails, though, the Fertittas are going to be very familiar with its inner workings because that is how they were forced to grow the UFC.

When they bought the company at the suggestion of Dana White back in 2001 for $2 million, the relatively unregulated sport — there was even some biting and head-butting back then — was banned in nearly every state.

“When I say we came from humble beginnings I’m talking humble beginnings,” Dana White has explained. “This sport wasn’t allowed on pay-per-view when we bought it. Porn was on pay-per-view! The UFC was not allowed! That was the uphill battle we faced. Venues wouldn’t even let us hold UFC events at their sites. When I would try to set up meetings with pay-per-view execs, they wouldn’t even take them.”

The Fertittas regulated their sport with rules and safety approaches that now produce healthier statistics than boxing and the NFL. Over time, this approach has gotten the endorsement of athletic commissions in 45 states. Self-regulation and savvy marketing has turned the UFC into a multi-billion-dollar business that now has a television contract with Fox and is only just beginning to make inroads around the world.

If Congress does not vote in across-the-board regulation for all 50 states soon, Ultimate Gaming will have to gain recognition state-by-state as these governments open up to online gaming. It’ll be poised to do so with the same expertise that the UFC used.

A fan-based approach that worked so well with the UFC will also be cross-marketed to Ultimate Poker. Land-based tournaments will be linked to the game on the web. Bringing in Esfandiari is the equivalent of having a champion like Georges St-Pierre or Anderson Silva at the top of the marquee.

There is no way to minimize the importance of regulation for Breitling, the Fertitta brothers and Esfandiari.

The Fertittas, as well as many other land-based casino companies, invested in the online gaming industry back at the early part of the century. Twenty million dollars was put into a company being run by Tobin Prior — now CEO of Ultimate Gaming — when a letter from the Department of Justice sent to Nevada gaming authorities pointed out that licensed casino companies would be putting themselves at risk by moving forward into the online space.

All told, about $100 million had been invested in online gaming by licensed casinos. All these companies pulled back after this letter was received due to the potential legal consequences, opening the door for offshore companies to jump in and control the American market without any regulation, licenses or payment of taxes. It was a fabulous and uninterrupted ride until Black Friday.

One of those companies, PokerStars, recently paid fines to the government of roughly $730 million, purchased Full Tilt and now is trying to get back into the game as it’s legalized state-by-state.

This will be impossible in Nevada, which passed a “bad actor” clause, to keep out people and offshore companies that offered online poker in the United States before they were shut down by the federal government. New Jersey’s bill did not include a “bad actor” clause, opening the door for former offshore companies to try to buy existing casinos and maneuver their way back in.

The politics is, and is going to be, intense. Indian Reservations, state lotteries and traditional casinos are all vying for position and trying to keep out the companies that were indicted and now wish to be able to use their databases and years of experience to continue business legally.

Said Esfandiari: “I can gladly come out and say: Play at because I know it’ll be good. You’re going to get a great game, and nobody’s going to get screwed. I can personally vouch for that because I trust the guys running Ultimate Poker one hundred percent.

“To be with a completely legitimate, trustworthy, reputable company such as Ultimate Poker makes me sleep good at night. Believe me, you don’t want to do it any other way.” ♠