Policing Online Gambling — Why It is a Losing Bet

It was revealed today that a former money launderer for online casinos, Daniel Tzvetkoff, turned states evidence to avoid jail time and rat out 3 of the largest online poker sites.  Five domains were seized including Full Tilt Poker, Poker Stars and Absolute Poker.  75 bank accounts were frozen as part of the arrests that include money laundering, bank fraud and online gambling.

The arrests and seizures are all thanks to a law passed in October of 2006 on the safety of our Ports, but was based off of a bill from July 2006:

To prevent the use of certain payment instruments, credit cards, and fund transfers for unlawful Internet gambling, and for other purposes.

The Obama administration as well as many states have recently talked about repealing the law or enacting laws to work around this Federal Law.  I, in now way, condone what these companies or folks did.  Laundering money and committing bank fraud is definitely illegal, but the environment created in 2006 with this controversial law created a situation where they had no little choice.

Putting aside the law for second and whether it is right or wrong, having the FBI or other government offices policing the internet is always going to be a losing bet if the law they are enforcing is legal in other countries.  Almost every other country allows online gambling, so the US is left to threaten US credit card companies and banks for prosecution for depositing customer money into these accounts.  Offshore gambling sites have gotten smart in how to deal with this and everyone has stayed one step ahead of the Federal Investigators.

I heard one person compare this to illegal file sharing and the policing of sites that post copyright material.  This is not like that at all.

First, the world has judged for the most part that illegally posting copyrighted material is wrong, so jurisdictions are enforcing that law equally across the world.  Second, online gambling is something a user opts into fully understanding the risks, while uploading, hosting or downloading files illegally you are trading someone else’s work.  Its comparing missiles to apples.

So back to the law, why was it enacted and passed?  The actual law was an amendment that was attached to a bill related to the safety of our Ports the day before Congress adjourned before the 2006 elections.  There was no way the SAFE Ports Act was going to fail to pass, as what Congressmen or Senator would not pass a law protecting our country right before voters decide their fates.

Ugh…what a mess.  The best thing we can do as a country is repeal the law.  As a country we have legalized so many other forms of gambling, starting with lotteries, then slots, river boats and now card/table games all in the name of supplementing state coffers.  The next logical step in these times of government fiscal irresponsibility is to repeal the law and stop policing what can’t be policed.

The Real Season Starts Tonight

82 near meaningless games later, the moment all Caps fans have been waiting for is hear.  The playoffs start tonight, and taking revenge on the rest of league for our lackluster appearances in the past 3 years is going to be sweet.  To kick off the start of the post season, here are a few of my favorite moments from the Ovechkin era.  If this does not pump you up for tonight, you are definitely not rocking the red.

Where it all began, April 5th 2008, the Caps clinch the division and last playoff spot on the final day of the regular season

And who can forget NY Rangers head coach, John Tortorella, getting suspended for Game 6, in the 2009 playoffs.

So tonight when the Caps take the ice against the Rangers, the lasting memories of Game 7 in 2009 should be fresh in all our minds.

Let’s Go Caps!!!

[iPhone vs. Android] Sometimes Better Does Not Beat Popular

We have two distinct camps in the Clearspring offices.  Our CEO, Hooman Radfar, and a few others believes that Android will dominate and clean up the mobile phone market, while a large contingent believes that iPhone might not lead in market share but they will continue to be the phone that leads innovation and is the bright shiny object in the sky for many.

Last Monday a study came out that showed one third of teens wanted to buy an iPhone “soon.” That number is on top of the 17% of teens that already have iPhones.

The technorati has been quick to point out how Apple may be making the exact same mistakes as it did back in the 1980s as it pertains to their iOS platform strategy.  Experts will tell you by creating a walled garden for application developers and having a singular hardware and software platform, Apple is opening the door for Android to be the operating system for every other carrier and phone.  The one problem with that theory is demand.

Back in the late 1980s and early 1990s the purchase of personal computer purchases was price driven.  Back then Macs routinely cost over $2000, so when  competitors started building inferior machines for half the cost, Macs lost market share and the rest is history.

The mobile space is different.  First, the phone itself is cheaper as hardware in 2011 is a commodity.  Second, consumers have more purchasing power than they did back in the 1990s, and that despite a major recession in 2008-09, consumers seem to still be buying electronics and cutting back in other areas.  Third, consumers, and especially teens and young adults, want the cool and hip product, device or technology.  Even if Android is a better platform built on a better device, people think the iPhone is a status symbol.  Much like the BWM 3 series, there are better built cars for the price in the market place, but that does not stop people from buying the car because it is a status symbol.

So where does that leave us.  Sometimes a better technology is not preordained to be the most popular or the coolest.  If the teens of America have any say, Apple is going to have a hard time replicating the failures of the late 1980s, simply because the brand is considered hip by youth.

Baseball lets Manny Ramirez Down

Manny Ramirez retired on Friday after he tested positive for performance enhancing drugs.  He would have faced a 100 game suspension, but at 38 years of age, sitting out the entire season was not in the cards for him.  This is not the first positive test for Manny, he was suspended 50 games in 2009 when he was with the Los Angeles Dodgers.

Everyone by now knows the baseball history of performance enhancing drugs.  When I was in the clubhouse of the Baltimore Orioles in 1999, steroids were openly discussed and on display in lockers.  The blind eye that baseball turned to the players taking these illegal substances has apparently not kept players from stopping this behavior now that baseball is paying attention.  For veteran ballplayers it pays to take the risk that Manny did.  Manny Ramirez signs a one year agreement, takes PEDs, hopes he does not get caught and he earns one more year’s worth of paychecks.

I am confident Manny is not the only one doing this either.  I also am confident baseball is not the only sport where this happens.  Whether it’s an athlete returning from injury, or an aging athlete wanting to stay competitive they are going to look for an edge.

The odd thing about this situation is that for the professional leagues, continuing to turn a blind eye still prevails for certain players.  These former superstars hanging on are great for leagues, for the television networks and endorsements.  See Brett Farve, Barry Bonds, Ray Lewis, and many others (not to say these players used PEDs, but these are veteran athletes who have hung on for an extraordinary long time).

I think Manny will be a foot note in history in baseball.  I am skeptical that he will be voted into the hall of fame.  Baseball let down Manny Ramirez, they did not take seriously the issues of PEDs years ago, and the way they reward players and the amount of money they reward players creates a culture in which players want to take a chance at cheating.

A Failure to Fail

On Sunday I was on the closing keynote panel at the Social Learning Summit with 5 others, that included professors, consultants and social media experts.  During the discussion we touched upon tolerance for failure.  Historically, failure was looked upon very negatively in academia as well as corporate America.

I shared that in my experience when your company could not tolerate experimentations that may result in failure, its time to get new management.  I think it is the same in school, and while I am not suggesting every student go out and get ‘Fs’ on their report cards, what I do think we need to alter is that teachers recognize students for experimenting and failing.

Part of the mistake I see in teaching people that it is OK to fail is that they need to learn to “fail fast.”  In business, most of the time we do not have time or money to waste on a project whose outcome is likely to be unknown for years or decades.  This is even more true when it comes to the internet and computer technology.  The key is to know when you are failing, to pivot, change hypothesis, and keep experimenting.

Recognizing when you hit that wall and need to change directions can be challenging, but just getting started is even harder.  In my experiences at AOL we had the opportunity to do a lot of skunk works projects, heck even AIM was a skunk works project when it got started.  The challenge was that our management was not tolerant of failure, and over time discouraged employees from taking chances, experimenting and potentially failing.

The next great idea may be sitting in your head right now, but you have to ask yourself are capable of failing?  Are your professors or your company tolerant of taking chances knowing it may lead to zilch?  If not, perhaps someone failed you or your university/company that encouraging exploration is where the next great product may come from.

New Open Source Stream Summarizing Java Library

AddThis Blog » Blog Archive » New Open Source Stream Summarizing Java Library.

Last week we open sourced a library designed to help you with summarizing streams of data.  The library is available up on github, and we would love to get any feedback you have.  Kuddos goes out to the data team here at Clearspring and all the great work they are doing in helping folks process billions of pieces of data efficiently.

Social Learning Summit Wrap Up

This weekend I had the chance to participate on 2 panels at the Social Learning Summit at American University.  It was great to interact with social media professionals in the DC Area and of course the staff and students at AU.  I was really impressed with the AU Social Media Club (@AU_SMCEDU), specifically Alex, Megan and Miranda for putting together the event.

I really enjoyed interacting with everyone at the conference.  One of the nice things about being in an academic setting is that people there are truly invested in learning.  Typically when I speak at an industry event, half the people in the room are doing work, the other half are bashing you on IRC or Twitter because they think they know it all.

So thank you again to everyone who participated, asked questions and stopped to chat before and after the panels, I learned a bunch of new stuff.  As I mentioned to Professor Talan, I would love to come in during the summer and do this all over again!