Tension Grows Between Mehaffey and WSOP Nevada
One person has decided to take on the sole online poker provider in Nevada. This person is not just a random player, however, as John Mehaffey is a longtime poker player, journalist, and enthusiast. And the provider is not just any company but WSOP.com, the online arm of the World Series of Poker.
When online poker was first legalized in Nevada not long after Black Friday in 2011, several companies lined up to obtain licenses and offer online poker services. WSOP.com was one of them, though it was second to launch after Ultimate Poker, which since closed. Real Gaming also signed up to launch poker online, though it never gained much traction. The only surviving company is the one associated with the WSOP, and the limited scope of the state’s market has discouraged other companies from providing any competition. For all intents and purposes, WSOP.com is a monopoly.
Mehaffey’s experiences with the WSOP.com are now public because of his frustration and his willingness to put all of his cards on the table, so to speak. And David Huber has amplified the story on Part Time Poker. It’s an important and ongoing story.
WSOP Nevada and Seth Palansky blasted by poker player for purportedly buttonholing vulnerable consumers and using "dubious" tactics to get customers to gamble more.https://t.co/iruVxigW9m
— David Huber (@dhubermex) September 29, 2018
According to Mehaffey’s account, the situation began in the summer of 2017 when he wanted to reload his WSOP.com account via a promoted bonus. He wanted to do it in person at the Rio in Las Vegas but wanted to first confirm with online customer support that it would be credited properly. He was unable to obtain answers via the online live chat but finally received an answer via a WSOP-affiliated person, Kevin Mathers, on Twitter.
After playing on the site for the summer despite what he deemed excessive rake, Mehaffey found little action and wanted to withdraw the $411 in his account, which included an $11 profit over his initial deposit. His withdrawal requests were denied multiple times, first due to a disprovable accusation that he “didn’t give enough action,” then because he was unable to provide hard-to-obtain bank statements for undisputed transactions. Upon Mehaffey’s eventual threat to file a complaint with the Nevada gaming regulator, the withdrawal was processed.
When Mehaffey published this account, he was informed by WSOP.com that his account would be permanently closed. He then proceeded to file a complaint with the Nevada Gaming Control Board, but when the October 1 mass shooting happened in Las Vegas, he decided against it. “That was not the time for this,” he wrote.
In Mehaffey’s words, his hope was to instigate a change in policy that would ensure players in the regulated environment could be paid without hassle or complication. He felt there should be clearer rules regarding bonus and withdrawal requirements.
In light of his goal, he contacted Seth Palansky, Vice President of Corporate Communications for Caesars Interactive Entertainment, which owns and operates WSOP.com. The two spoke via email and telephone from April 2018 through the end of the WSOP in July before finally deciding to go directly to the regulator. “I’m notifying Nevada gaming regulators,” Mehaffey wrote to Palansky. “It will not be a formal complaint but will be a policy recommendation. I’m going to make it clear that this is not an attempt to have your company punished and the real issue is with 888, not Caesars. I think this is a fair compromise.”
Palansky responded by reinforcing Mehaffey’s ban from playing on WSOP.com and threatening a very harsh retaliation. “We will take actions from this point forward to prevent you from spreading misinformation about our company and will do what we feel is necessary, including refusing your service at all our land-based properties as well, in addition to pursuing legal action against you,” Palansky wrote.
Mehaffey continued to communicate in the hopes of clarifying what Palansky felt was “misinformation,” even offering to clarify and apologize if he did make a false statement in the process of their emails. Six weeks after no response from Palansky, Mehaffey followed up again and received no response.
“I predict nothing comes from the threats,” wrote Mehaffey in a public post. “I am still an invited guest at all Caesars properties. I have been a customer in good standing since 2002. I think the optics of following through on these threats would be embarrassing, and the actual malice defamation standard is impossible to demonstrate here.”
In conclusion, Mehaffey wrote that he felt WSOP.com did not act in good faith and that Palansky likely did not consult with his company’s legal department before issuing threats. In reporting the incident to the Nevada Gaming Control Board, Mehaffey also submitted a list of suggestions to improve the state’s online poker laws and plans to lobby the 2019 Nevada legislature for the same purpose.
I have a policy of publishing all baseless legal threats. I feel strongly that @wsopcom sent me one so here it is. This is my opinion as to why I feel that way and what I am doing about it: https://t.co/9p5eV3sZRT
— John Mehaffey (@John_Mehaffey) September 27, 2018
Footing in a New Industry
Regulated online poker is the direction of the industry. The United States, France, Italy, Spain, and numerous other countries have decided that a tightly regulated gaming industry is the preferred method by which to oversee the companies and services they provide.
Of course, as the newly-constructed industry is in its relative infancy and the framework is still being adjusted for growth, offshore companies continue to thrive. They provide choices in an otherwise strict and limited market, especially for professional and semi-pro poker players who are left with few options other than to patronize poker sites that are not included in the regulated industry. The only state with even a sliver of viability for regular players in 2018 is New Jersey, and Pennsylvania is likely to follow in those footsteps when its sites launch in 2019. Both states will then offer numerous online poker options as well as potential liquidity that will make a significant improvement in table traffic.
Meanwhile, Delaware and Nevada are comprised of monopolies. Only one online poker operator exists in those states. Delaware doesn’t have much traffic of note, but Nevada – home of Las Vegas and the World Series of Poker – has a solid following and even greater potential.
The reason that there are not more online poker operators in Nevada is simple. The rake from online poker is not significant enough to warrant companies obtaining expensive licenses, establishing servers, marketing and advertising, and trying to compete with a brand like the World Series of Poker. It is much more beneficial for companies to set up and operate in a state like New Jersey or Pennsylvania, wherein they may also offer online casino games like slots, which is where the majority of the profit lies.
Opinion: Competition is Vital
There are several assumptions that can be made at this point in the history of the game.
–Nevada is unlikely to legalize online casino games in addition to online poker.
–No online poker company is likely to try to compete with WSOP.com at this time.
–Most major online poker news outlets are not likely to report this story.
A simply look into the history of the world shows that monopolies tend to do more harm than good. At this time, WSOP.com is a monopoly in Nevada. Not only does it have control over the entire online poker population of the state, the company also keeps its revenue a secret, as the laws don’t require public reporting of online poker revenue unless there is more than one viable company in the market.
For media outlets dedicated to not accepting advertising money from offshore sites that cater to US customers without state-by-state licensing, they must rely on advertising income from a few select companies. Not only is WSOP.com the only Nevada online poker provider, it is also closely allied with 888poker and a part of the Caesars family of land-based casino properties. To disparage – or even report a story that may reflect negatively on – a company with as much power would be to jeopardize more than just advertising income; it could affect the media outlet’s press access in general, not to mention specifically at the World Series of Poker events in Las Vegas and around the world.
This is not a healthy environment for online poker.
Players have only one choice, and WSOP.com can treat them as they see fit without much worry about the regulator stepping in. Most players with concerns will not take them to the state regulator as Mehaffey has done and pursue them with the same vigor, dedication, and integrity.
Media outlets that rely on the World Series of Poker and Caesars for income and access are not likely to give the story any publicity.
For the most part, WSOP.com has appeared to act responsibly and appropriately per the law under which they operate in Nevada. However, if Mehaffey is to be believed, there are attempts to skirt responsible gaming standards and manipulate players. Even if only in this case, it is one case too many.
The online poker business must grow, as monopolies in this market present too many dangers to the industry as a whole.