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Gordon Vayo, the 2016 World Series of Poker Main Event runner-up has filed a lawsuit against PokerStars. The lawsuit alleges PokerStars is unjustly withholding the near $700,000 Vayo won in a May 2017 online tournament.
The story, first reported by Forbes, quickly went viral within the poker community.
The gist of the case is PokerStars claims Vayo was playing on the dot-com site from within the United States (a prohibited jurisdiction) through the use of a VPN. (You can of course play on PokerStars NJ, a ring-fenced site, but nowhere else in the US.)
The lawsuit states Vayo, “provided evidence showing that he was in Canada during the entirety of his play in the SCOOP tournament.” That said, the lawsuit doesn’t focus on whether or not Vayo was or wasn’t in the United States, rather it focuses on PokerStars efficacy in preventing US players from accessing its site and that the burden of proof should fall on PokerStars and not Vayo.
The lawsuit also states that PokerStars:
“[H]as engaged in a practice of approving U.S. citizens and residents for play on the PokerStars.com site, allowing and encouraging them to play on the site, happily taking their money – in many cases for years. Then, after a U.S. citizen or resident wins a significant amount of money on the PokerStars.com site, Defendant conducts a sham investigation into the user’s activities and the location of the user’s access of the site, placing the onus on the player to retroactively prove that it is “inconceivable” that his or her play could have originated from within the United States, in order to gin up a pretext to deny payment.”
PokerStars issued the following statement to Online Poker Report on the matter:
“We cannot comment on pending litigation matters and our investigation into this particular matter is ongoing. However, as operator of the most regulated poker site in the world we believe that we have a duty to protect the integrity of the game and ensure we provide a safe and fair poker platform by enforcing our terms of service. We have paid out over half a billion dollars in tournaments winnings this year alone and will continue to implement rigorous security procedures to protect our players.”
Considering how rare an occurrence this is (as PokerStars stated, it’s paid out a half-billion dollars in tournament winnings this year), it seems unlikely PokerStars would choose to seize Vayo’s $700,000 without strong evidence.
In 2015, a near identical situation played out with Jake Schindler.
In the Schindler case, circumstantial evidence eventually came out that cast serious doubt on Schindler’s assertion that he wasn’t in the US.
The Schindler situation isn’t an indictment of Vayo, but it does poke some holes in the belief that PokerStars (and other online poker operators) don’t have the capability to catch people breaking the rules.
In fact, I would posit that most online poker players would be surprised at just how effective the technology is, particularly at PokerStars, widely believed to be the best-in-class when it comes to security and compliance.
The answer to that question is: A lot better than most people think.
It’s by no means impenetrable, but we’re no longer in the regulated-in-name-only era of online poker when you were registering an account on the honor system. The technology in place in regulated markets to catch colluders, multi-accounters, and identity/location maskers is pretty robust.
A good example is GeoComply, the company that provides the geolocation technology in place in Nevada and New Jersey.
“GeoComply is able to deliver such precision due to its patented technology solution, which analyzes and encrypts multiple data sources from a user’s device. GeoComply collects IP, Wifi, GSM, GPS and Carrier location data. No other location solution exists on the market that provides this level of cross referencing to best determine user location to satisfy compliance needs and anti-fraud systems.”
In a 2015 op-ed refuting claims by detractors, GeoComply CEO Anna Sainsbury wrote:
“As a licensed geolocation provider in these three states, I can assure you that, in fact, these regulators literally ran thousands and thousands of tests outside of their own states’ boundaries, attempting to use all the spoofing techniques alluded to by Beckwith (and many more) in order to ensure the location results we provide are the correct ones and that their neighbors’ sovereignty over gaming was respected.
Indeed, the regulators sent letters to their colleagues in neighboring states setting out the measures to ensure proper geo-location and inviting them to audit for themselves the sufficiency of the safeguards.”
There is little reason to think PokerStars would rely on such a robust system in New Jersey, while it uses outdated or vastly inferior technology for its rest-of-world product. That sort of lax approach would put the company’s current and future licenses in jeopardy.
First, let’s put the idea that PokerStars is somehow profiting from this to bed. PokerStars either redistributes the money or donates to a responsible gaming charity. In cases where the amount of money seized is less than the original amount, PokerStars has historically made up the difference.
With that out of the way, there’s been some discussion on Twitter about how PokerStars handles seized funds.
The Twitter-verse is under the impression that the type of violation determines if the seized money is redistributed amongst players or donated to charity.
In a 2014 post on twoplustwo.com, Michael Josem, a former PokerStars employee, explained the company’s policy on confiscated funds thusly:
We generally confiscate funds from accounts for two broad scenarios:
- a) The player breaks our rules and cause harm to other players (eg, collusion, account sharing and so on). In this situation, the funds are entirely redistributed to players who have been harmed by ilicit activity, and in many cases, becaus the funds on hand are less than the harm caused, PokerStars adds additional funds to the compensation provided.
- b) The player breaks our rules and cause no harm to other players (eg, underage play, playing from a prohibited region). In this situation, the funds are entirely donated to appropriate charities. In addition, entirely separate and independent of fund confiscations, we contribute additional funds to various other charitable causes.
In neither case does PokerStars profit from such confiscations. It’s not our money, and we do not keep it.
However, it’s my understanding that that’s a general policy, and it’s unclear how PokerStars would handle the Vayo situation.
And if you’re wondering why a decision hasn’t been reached on what to do with the funds seized from Vayo, look no further than the lawsuit filed by Vayo and the phrase “ongoing investigation,” in the PokerStars statement. Vayo’s prize-money won’t trickle down to the other players in the tournament or get donated to a charity until the matter is resolved.
Considering the amount of money involved and its overall percentage of the prize-pool, I would be surprised if PokerStars didn’t redistribute the money to players from the tournament.