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Gambling craps

Craps gambling (previously known as crabs[1]) is a casino dice game. Craps is a simplification of the Old English game hazard. Its origins are complex and may date to the Crusades, later being influenced by French gamblers. What was to become the modern American version of the game was brought to New Orleans by Bernard Xavier Philippe de Marigny de Mandeville, scion of wealthy Louisiana landowners and a gambler and politician.[1] The game, first known as crapaud reportedly owes its modern popularity from its being spread through the African-American community [2]. In craps, players wager money against the casino on the outcome of one roll, or of a series of rolls of two dice. Craps can also be played in less formal settings and is said to be popular among soldiers. In such situations side bets are more frequent, with one or several participants covering or "fading" bets against the dice. Rules of play Craps is a game played by 1 or more players. Players take turns rolling two dice. The player rolling the dice is called the "shooter". The game is played in rounds, with the first roll of a new round called the "come-out roll." On the come-out roll if the total of the two dice is 7, 11, 2, 3 or 12, the round ends immediately and the shooter must roll another come-out roll. A result of 2, 3 or 12 is called 'craps' while a result of 7 or 11 is called a 'win' or a 'natural'. When any other number (4, 5, 6, 8, 9, or 10) is rolled on the come-out roll, this number becomes what is called the point. If a point is established then the shooter will re-roll the dice continuously until either a 7 is rolled, or the point is rolled again. If the shooter rolls the point again, the round ends and the game starts over with the same shooter rolling another come-out roll. If the shooter rolls a 7 instead of the point, this is called a 'seven-out', the round ends and the dice pass to the next player to the left, who becomes the new shooter. Players can make any of a large number of bets. Most of these are betting on the way the round will end (point comes or a seven out). Other betting can include betting on a specific total being rolled, or a specific total being rolled before a 7. In a casino players will make bets with chips on a specially made craps table. A casino craps table is run by four casino employees: a boxman who guards the chips, supervises the dealers and handles coloring out players; two base dealers who stand to either side of the boxman and collect and pay bets; and a stickman who stands directly across the table from the boxman and announces the results of each roll and then collects the dice with an elongated wooden stick. He is also in charge of managing the bets made on the center of the table (hardways, yo, horn, etc). A new shooter, who must bet the table minimum on either the pass line or the don't pass line to play, is presented five dice by the stickman and picks two. The dealers will usually insist that the shooter roll with one hand and that the dice bounce off the wall surrounding the table. These requirements are meant to prevent cheating attempts by players switching the dice or making a "controlled shot." If a die leaves the table, the shooter will usually be asked to select another die from the remaining three but can request using the same die if it passes the boxman's inspection. This requirement is used in an effort to reduce cheating the game by players substituting loaded dice for the regulation dice. Names of Rolls in Craps 1 2 3 4 5 6 1 Snake Eyes Loose Deuce Easy Four Fever Five Easy Six Natural or Seven Out 2 Loose Deuce Hard Four Fever Five Easy Six Natural or Seven Out Easy Eight 3 Easy Four Fever Five Hard Six Natural or Seven Out Easy Eight Nina 4 Fever Five Easy Six Natural or Seven Out Hard Eight Nina Easy Ten 5 Easy Six Natural or Seven Out Easy Eight Nina Hard Ten Yo 6 Natural or Seven Out Easy Eight Nina Easy Ten Yo Boxcars Nine is often called a "Centerfield Nine" because 9 is the center of the Field bet. Five is often called "No Field Five" to remind the players that 5 is not paid in the Field bets. In Atlantic City, a 4-5 is called a "Railroad Nine". Types of bets Player bets Fire Bet: Before the shooter begins, some casinos will allow a bet known as a fire bet to be placed. A fire bet is a bet for between 1-5 dollars in the hopes that the next shooter will have a hot streak of setting and getting many points of different values. As different individual points are made by the shooter, they will be marked on the craps layout with a fire symbol. The first three points will not pay out on the fire bet, but the fourth, fifth and sixth will pay out at increasing odds. The fourth point pays at 25-1 (a maximum of $125), the fifth point pays at 250-1 (a maximum of $1250) and the 6th point pays at 1000-1 (a maximum of $5000). Note that the points must all be different numbers for them to count towards the fire bet. A shooter who successfully hits a point of 10 twice will only garner credit for the first one on the fire bet. Line bets The shooter is required to make either a Pass Line bet or a Don't Pass bet if he wants to shoot. Line bets are based around points. Pass line: The fundamental bet in craps is the pass line bet, also called the win line in some countries. A pass line bet is won if the come-out roll is a 7 or 11. If the come-out roll is 2, 3 or 12, the bet loses. If instead the come-out roll establishes a point, and that point is rolled again, the bet wins. If a point is established and a 7 is rolled before the point is re-rolled, the bet loses. Don't pass: The opposite of the pass line bet is the don't pass bet. The don't pass bet is opposite in that it loses if the come-out roll is 7 or 11 and wins if the come-out roll is 2 or 3. 12 will draw, (this depends on the casino), either way a player cannot lose if 12 is rolled. A draw (the word "BAR", printed on the Craps layout, means "Standoff"), on 12 is done to ensure the casino maintains a house edge regardless of whether players are betting pass or don't pass. If a point is established and that point is rolled again, the don't pass bet loses. If a 7 is rolled instead of the point being re-rolled, the don't pass bet wins. It is common to consider don't pass bets to be in poor taste, or even taboo, because they are betting opposite to how the game is conventionally considered to play. Pass odds: If a 4, 5, 6, 8, 9, or 10 is thrown on the come-out roll (i.e., if a point is set), most casinos allow pass line bettors to take odds by placing from one to five times (and at some casinos, up to 100 times) the pass line bet behind the pass line. This additional bet wins if the point is rolled again before a 7 is rolled (the point is made) and pays at the true odds of 2-to-1 if 4 or 10 is the point, 3-to-2 if 5 or 9 is the point, and 6-to-5 if 6 or 8 is the point. Don't pass odds: If a player is playing don't pass instead of pass, they may also take odds by placing chips behind the don't pass line. If a 7 comes instead of the point coming, the odds pay at true odds of 1-to-2 if 4 or 10 is the point, 2-to-3 if 5 or 9 is the point, 5-to-6 if 6 or 8 is the point. For most players the perceived disadvantage of putting up the long side of the bet makes the don't pass odds less desirable, however putting up the long side reduces variance. Come bet: The rules for the come wagers are the same as for the pass line except that they can only be made after the come-out roll. If the roll the come bet is made on is a 7 or 11 it wins, if it is a 2, 3 or 12 it loses, just like a pass bet. If instead the roll is 4, 5, 6, 8, 9, 10 then the come bet will be moved by the base dealer onto a box representing that number. If the number is rolled again before a seven, the bet wins. If the seven comes before the number (the come-bet), the bet loses. Odds can also be placed on a come-bet just like a normal pass point; in this case the dealer (not the player) places the odds bet on top of the bet in the box, because of limited space, slightly offset to signify that it is an odds bet and not part of the original come bet. Because of the come bet, if the shooter makes their point, a player can find themselves in the situation where they have a come bet (possibly with odds on it) and the next roll is a come-out roll. In this situation odds bets on the come wagers are presumed to be not working for the come-out roll. That means that if the shooter rolls a 7 on the come-out roll, any players with active come bets waiting for a come-point lose their initial wager but will have their odds money returned to them, if the come-point is rolled the odds do not win but the come bet does and the odds are returned. The player can tell the dealer that they want their odds working, such that if the shooter rolls a number that matches the come point, the odds bet will win along with the come bet, and if a seven is rolled both lose. Don't come: There is also a don't come box which is the opposite of a come bet in that the player is betting that craps will come on the next roll instead of 7 or 11, or that if a come point is made, that value won't be rolled again before a 7. It pays just as don't pass and also has odds in the same way. Single roll bets Single Roll bets have a result in a single shooter roll. They include: Yo: Wins if the shooter rolls 11. 3 (ace-deuce): Wins if the shooter rolls a 3. 2 (craps aces): Wins if shooter rolls a 2. 12 (craps): Wins if shooter rolls a 12. 2 or 12 (hi-lo): Wins if shooter rolls a 2 or 12. The stickman places this bet on the line dividing the 2 and 12 bets. Craps: Wins if the shooter rolls 2, 3 or 12. C & E: A combined bet, a player is betting half their bet on craps and the other half on yo (11). One of the two bets will always lose, the other may win. Any seven: Wins if the shooter rolls a 7. This bet is also nicknamed Big Red, since the 7 on its betting space on the layout is usually large and red. Field: This bet is a wager that one of the numbers 2, 3, 4, 9, 10, 11, or 12 will appear on the next roll of the dice. This bet typically pays more 2:1 or 3:1 if 2 or 12 is rolled, and 1:1 if 3, 4, 9, 10 or 11 is rolled. Unlike the other proposition bets which are handled by the dealers or stickman, the field bet is placed directly by the player. The Horn: This is a bet that involves betting on 1 unit each for 2, 3, 11 and 12 at the same time for the next roll. The bet is actually four separate bets, and pays off depending on which number is actually rolled, minus three units for the other three losing bets. Most players[Please name specific person or group] do a "Horn High" bet which involves betting an additional $1 on one of the 4 choices, with the most frequent being a $5 "horn high yo" bet (which means $2 on the 11, $1 each on 2, 3 & 12). Whirl or World: bet is a five-unit bet that is a combination of a horn and any-seven bet, with the idea that if a seven is rolled the bet is a push, because the money won on the seven is lost on the horn portions of the bet. Multi roll bets These are bets that may not be settled on the first roll and may need any number of subsequent rolls before an outcome is determined. Hard way: You may bet that the shooter will throw a specific hard way (either 4, 6, 8 or 10), before he throws a seven or the corresponding easy way. A hard way is when both dice show identical values, also known as "doubles", so 2 2 is hard way 4. Easy way: Opposite of hard way is a bet that the shooter will throw a specific easy way (either 4, 6, 8 or 10), before he throws a seven. An easy way is a value that does not have two dice identical, so 3 1 is easy way 4. Big 6 and Big 8: These wagers are considered by craps players as sucker bets because they pay even money while a player can bet on the same proposition (that the number will be rolled before a 7) by making place/buy bets on the 6 or the 8, which pay more money. Veteran craps players avoid these bets, and some casinos do not even offer them. The bets are located in the corners behind the pass line, and bets are placed directly by players. Place and buy: Players can buy or place certain individual numbers (4, 5, 6, 8, 9, 10) by placing their wager in the come area and telling the dealer, "place the 6" or "buy the 8". Both place and buy bets are bets that the number bet on will be rolled before a 7 is rolled. Place bets are paid at odds worse than the true odds, while buy bets are paid at true odds, but a 5% commission is charged. Traditionally, the buy bet commission is paid no matter what, but in recent years a number of casinos have changed their policy to charge the commission only when the buy bet wins. Most casinos usually charge only $1 for a $25 green-chip bet (4% commission), or $2 for $50 (two green chips), reducing the house advantage a bit more. Where commission is charged only on wins, the commission is sometimes deducted from the winning payoff — a winning $25 buy bet on the 10 would pay $49, for instance. Lay: A lay bet is the opposite of a buy/place bet, where a player bets on a 7 to roll before the number that is laid. The lay bets pay true odds, but a 5% commission is charged. In some casinos the commission is only charged if the bet wins. Like the buy bet the commission is adjusted to suit the betting unit such that fraction of a dollar payouts are not needed. Bet odds Note: Individual casinos may pay some of these bets at different odds than those listed below. The payoff odds listed are the most common throughout North American casinos. Note: Actual odds do not vary. Bet Actual Odds Odds Paid House Edge Pass / Come 251:244 1:1 1.41% Don’t Pass / Don’t Come (Bar 12) 244:251 1:1 1.36% Pass Odds / Come Odds Same as paid 2:1 on 4 or 10 3:2 on 5 or 9 6:5 on 6 or 8 0% Don’t Pass Odds / Don’t Come Odds Same as paid 1:2 against 4 or 10 2:3 against 5 or 9 5:6 against 6 or 8 0% Yo (11) 17:1 15:1 11.11% 3 17:1 15:1 11.11% 2 35:1 30:1 13.89% 12 35:1 30:1 13.89% Hi-Lo 17:1 15:1 11.11% Craps 8:1 7:1 11.11% C & E 5:1 3:1 on craps 7:1 on 11 11.11% Any 7 5:1 4:1 16.67% Field 5:4 1:1 on 3,4,9,10 or 11 2:1 on 2 and 12 5.56% Field 5:4 1:1 on 3,4,9,10 or 11 2:1 on 2, 3:1 on 12 2.78% The Horn 5:1 27:4 on 2 or 12 3:1 on 3 or 11 12.5% Whirl/World 2:1 26:5 on 2 or 12 11:5 on 3 or 11 0:1 (push) on 7 13.33% Hard way 4 / Hard way 10 8:1 7:1 11.11% Hard way 6 / Hard way 8 10:1 9:1 9.09% Big 6 6:5 1:1 9.09% Big 8 6:5 1:1 9.09% Place 4 / Place 10 2:1 9:5 6.67% Place 5 / Place 9 3:2 7:5 4% Place 6 / Place 8 6:5 7:6 1.52% Buy 4 / Buy 10 2:1 2:1 + 5% commission 5% Buy 5 / Buy 9 3:2 3:2 + 5% commission 5% Buy 6 / Buy 8 6:5 6:5 + 5% commission 5% Lay 4 / Lay 10 1:2 1:2 + 5% commission 5% Lay 5 / Lay 9 2:3 2:3 + 5% commission 5% Lay 6 / Lay 8 5:6 5:6 + 5% commission 5% The expected value of all bets is negative, such that the average player will always lose money. This is because the house always sets the paid odds to below the actual odds. All bets have a negative expectation except for the "odds" bet that the player is allowed to make after a point is established on a pass/come don't pass/don't come bet (the odds portion of the bet has a long-term expected value of 0). However, the "free odds" bet cannot be made independently, so the expected value of the entire bet, including odds, is still negative. Since there is no correlation between die rolls, there is no possible long-term winning strategy in craps. Maximizing the size of your odds bet in relation to your line bet will reduce, but never eliminate the house edge, and will increase variance. Many casinos have a limit on how large the odds bet can be in relation to the flat bet, with single, double, and five times odds common. Some casinos offer 3-4-5 odds, referring to the maximum multiple of the line bet a player can place in odds for the points of 4 and 10, 5 and 9, and 6 and 8, respectively. During promotional periods, a casino may even offer 100x odds bets, which reduces the house edge to almost nothing, but dramatically increases variance, as the player will be betting in large betting units. Optimal betting Since all bets have a house advantage, and a negative expected value, the optimal strategy is not to play. Failing that, one can reduce one's average hourly losses by only placing bets with the smallest house advantage. The pass/don't line, come/don't line, place 6, place 8, buy 4 and buy 10 (only under the casino rules where commission is charged only on wins) are the bets with the lowest house edge, and all other bets will on average lose money between three and twelve times faster because of the difference in house edges. An important alternative metric is house advantage per roll (rather than per bet), which may be expressed in loss per hour see reference. The typical pace of rolls varies depending on the number of players, but 102 rolls per hour is a cited rate for a nearly full table see reference. This number then permits calculation of rate of loss per hour, and per the 4 day/5 hour per day gambling trip: $10 Pass line bets .42% per roll, $4.28 per hour, $86 per trip $10 Place 6,8 bets 1.46% per roll, $14.89 per hour, $298 per trip $10 Place 5,9 bets 1.32% per roll, $13.46 per hour, $269 per trip $10 Place 4,10 bets 1.19% per roll, $12.14 per hour, $243 per trip $1 Single Hardways 2.78% per roll, $2.84 per hour, $56.71 per trip $1 All hardways 2.78% per roll, $11.34 per hour, $227 per trip $5 All hardways 2.78% per roll, $56.71 per hour, $1134 per trip $1 Craps only on come out 3.29% per roll, $3.35 per hour, $67.09 per trip $1 Eleven only on come out 3.29% per roll, $3.35 per hour, $67.09 per trip This runs counter to the notion that hardways and C/E on come-out roll are necessarily bad bets, since, although their house percentages are poor, they have lower minimum bets and happen less frequently. Therefore, they do not lose money as quickly as the pass line bet. Also, by this metric, other betting patterns are shown to be costly, for example placing $10 on all point numbers, which has a much higher loss of $40.49 per hour or $810 per trip. [citation needed] Etiquette Besides the rules of the actual game, certain unwritten rules of etiquette exist while playing craps and are expected to be followed. Many consider these guidelines as important as the actual rules themselves. New players should familiarize themselves with them before approaching a craps table. Rules related to casino security * Players are not supposed to handle the dice with more than one hand (such as passing them from hand to hand before rolling) nor take the dice past the edge of the table. The only way to change hands when throwing dice, if permitted at all, is to set the dice on the table, let go, then take them with the other hand. * When throwing the dice, the player is expected to hit the farthest wall at the opposite end of the table. Some casinos refer to throws that do not hit the opposite wall as "Mellenberg Rolls."[citation needed] The dice may not be slid across the table and must be tossed. Typically, players are asked not to throw the dice higher than the eye level of the dealers. * The dice cannot land in the boxman's bank or on any of the dealers' working stacks of money. Dice that land in the chip tray also constitutes a "no roll". If the die or dice leave the table, the boxperson will examine the dice before letting it come back into the game. However, the player may request the same die or dice. * When either of the dice land on chips or markers not in the boxman's bank or the dealers' working stacks, the number that would be on top if the object the die is leaning on were removed, is the number that is used to make the call. * If one or both dice hits a player or dealer and rolls back onto the table, the roll counts as long as the person being hit did not interfere with either of the dice, though some casinos will rule "no roll" for this situation. * In most cases the shooter may "set" the dice to a particular configuration, but if they do, they are often asked to be quick about it so as not to delay the game. Some casinos have "no setting" rules. * Do not try to place money in the dealer's hand or expect the dealers to hand you chips. Dealers are not allowed to touch the players. A player is expected to lay the cash down on the layout, which the dealer will take and then place chips in front of the player. * Many craps table layouts state "NO CALL BETS". This means a player is not allowed to call out a bet without having at least the right amount of chips on the table. If the chips exceed the bet, for example a $100 chip is placed and bets called out of "$25 on five and nine", the dealer will say "it's a bet" and return $50 change to the player. The dealer doesn't have to actually place the bet in the proper place on the table to constitute a valid bet. This method is consistent with the fast action of the game, allowing a player to make a last-second bet while the dice are about to be thrown. The NO CALL BET rule may exist to prevent confusion on the amount bet, possibly going back to the days of 25 cent tables. For example "three fifty" could mean $3.50 or $350. If the dealer is not clear about the intention of the player he may state "no bet" and push the chips back to the player. Commonly observed etiquette * When offered the dice to shoot, a player may pass the dice to the next player without fear of offending anyone; however, keep in mind that at least one player must always be a "shooter" betting on either the pass line or don't pass line for the game to continue. * When tipping, the most common way is simply to toss chips onto the table and say "For the house," "For the dealers," or "For the boys" (the latter is considered acceptable even though dealers often are women). Another method is to place a bet next to your bet and call out "dealers." A "two-way" bet is one that is part for the player and part for the dealers. Usually, the dealers' bet is smaller than the player's bet, but it is appreciated. The part of the bet for the dealer is called a "toke" bet; this is from the $1 slot machine coins or tokens that are sometimes used to place bets for the dealers in a casino. Most casinos require the dealers to pick up their winning bets, including the original tip, rather than "let it ride" as the player may choose to do. * After the come-out roll, it is considered bad luck to say the word "seven". A common "nickname" for this number is "Big Red". * It is considered bad luck to change dice in the middle of a roll. * Center bets are made by tossing chips to the center of the table and calling out the intended bet; the stickman will then place the chips correctly for the player. * It is considered rude to "late bet," or make wagers while the dice are no longer in the middle of the table. While entirely permissible, excessive late betting will generally garner a warning. * Food, drinks, and other items should remain off the chip rail. * Players feel it is bad luck for the shooter to leave the table after a successful come-out roll. * While it is mathematically a slightly better bet, "wrong bettors" (people who bet "don't pass") are considered to bring bad luck to the table. * When the shooter is ready to roll, players should remove their hands from the table area in order to avoid interfering with the dice. The stickman will often say "hands high, let 'em fly" or "dice are out, hands high". * When making bets in the field or on the Big 6 or Big 8, it is the player's responsibility to track his or her bet. Place bets and Come Line bets will be tracked by the dealer, who will pay you directly. Hardway and other proposition bets are tracked by the stickman and will be paid by the dealer to you directly based on instructions from the stickman. Systems Martingale system No betting system can consistently beat casino games of pure chance such as craps, but that does not stop hopeful gamblers believing in them. One of the best known systems is the Martingale in which the player starts by betting $1 and doubles his bet whenever he loses. Upon winning, he starts over at $1. The idea is to realize a net win of $1 after every eventual win. This system fails because the player will either run out of money after having to double his bet several times in a row after a streak of losing bets, or he will be unable to bet the amount dictated by the system because it would exceed the maximum bet allowed by the casino. Gambler's fallacy Other systems depend on the gambler's fallacy, which in craps terms is the belief that past dice rolls influence the probabilities of future dice rolls. For example, the gambler's fallacy indicates that a craps player should bet on eleven if an eleven has not appeared or has appeared too often in the last 20 rolls. In reality, each roll of the dice is an independent event, so the probability of rolling an eleven is exactly 1/18 on every roll, even if eleven has not come up in the last 100 rolls, or if eleven has come up 5 times in the last 5 rolls. The common term to describe this is "dice have no memory". Parity hedge system The parity hedge system is a hoax promulgated by Quatloos. Despite the fact that no such system exists (indeed, it is a mathematical impossibility), several gambling-related web sites have retold the 'parity hedge' story without attribution. Dice setting or dice control Main article: Dice control Another approach is to "set" the dice in a particular orientation, and then throw them in such a manner that they do not tumble randomly. The theory is that the dice will be more likely to show certain numbers. Unlike other systems, this one is mathematically plausible, because if it were possible to alter the probabilities of each outcome, then winning systems could be devised. Casinos do take steps to prevent this. The dice are required to hit the back wall of the table, which makes controlled spins more difficult. Whether it is possible for human beings to consistently exercise the precise physical control necessitated by the theory is a source of controversy. A small but dedicated community of controlled shooters maintain records and claim proof of dice influencing in casino conditions. Frank Scoblete, Stanford Wong and Jerry L. Patterson, authors of books that feature dice control techniques, believe that it is possible to alter the odds in the player's favor by dice control. Chris Pawlicki, a mechanical engineer who (under the pseudonym "Sharpshooter") wrote a book on dice setting called Get The Edge At Craps: How to Control the Dice as a part of the Frank Scoblete "Get the Edge Guides," defined the math and science behind dice control.[3] In addition, some people offer to teach dice-setting skills for a substantial fee. Currently there has been no independent conclusive evidence that such methods can be successfully applied in a real casino.

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Online venues, by contrast, are dramatically cheaper because they have much smaller overhead costs. For example, adding another table does not take up valuable space like it would for a brick and mortar casino. Online poker rooms also allow the players to play for low stakes (as low as 1¢) and often offer poker freerolls (where there is no entry fee), attracting beginners.

Online venues may be more vulnerable to certain types of fraud, especially collusion between players. However, they have collusion detection abilities that do not exist in brick and mortar casinos. For example, online poker room security employees can look at the hand history of the cards previously played by any player on the site, making patterns of behavior easier to detect than in a casino where colluding players can simply fold their hands without anyone ever knowing the strength of their holding. Online poker rooms also check players' IP addresses in order to prevent players at the same household or at known open proxy servers from playing on the same tables.

Free poker online was played as early as the late 1990s in the form of IRC poker. Shortly thereafter Planet Poker was the first online cardroom to offer real money games. Author Mike Caro was one of the founders and the "face" of Planet Poker.

The major online poker sites offer varying features to entice new players. One common feature is to offer tournaments called satellites by which the winners gain entry to real-life poker tournaments. It was through one such tournament on Poker Stars that Chris Moneymaker won his entry to the 2003 World Series of Poker. He went on to win the main event causing shock in the poker world. The 2004 World Series featured three times as many players than in 2003. At least four players in the WSOP final table won their entry through an online cardroom. Like Moneymaker, 2004 winner Greg "Fossilman" Raymer also won his entry at the PokerStars online cardroom.

In October 2004, Sportingbet Plc, at the time the world's largest publicly traded online gaming company (SBT.L), announced the acquisition of ParadisePoker.com, one of the online poker industry's first and largest cardrooms. The $340 million dollar acquisition marked the first time an online cardroom was owned by a public company. Since then, several other cardroom parent companies have gone public.

In June 2005, PartyGaming, the parent company of the then largest online cardroom, PartyPoker, went public on the London Stock Exchange, achieving an initial public offering market value in excess of $8 billion dollars. At the time of the IPO, ninety-two percent of Party Gaming's income came from poker operations.

The market appears to be currently in a consolidation phase. In early 2006, PartyGaming moved to acquire EmpirePoker.com from Empire Online. Later in the year, bwin, an Austrian based online gambling company, acquired PokerRoom.com. Other poker rooms such as PokerStars and Poker.com that were rumored to be exploring initial public offerings[2] have postponed them.

Legality of Online Games Playing

From a legal perspective, online poker may differ in some ways from online casino gambling. However, many of the same issues do apply. For a discussion of the legality of online gambling in general, see online gambling.

Online poker is legal and regulated in many countries including several nations in and around the Caribbean Sea, and most notably the United Kingdom.

In the United States, the North Dakota House of Representatives passed a bill in February 2005 to legalize and regulate online poker and online poker cardroom operators in the state. The legislation required that online poker operations would have to physically locate their entire operations in the state. Testifying before the state Senate Judiciary committee, Nigel Payne, CEO of Sportingbet and owner of Paradise Poker, pledged to relocate to the state if the bill became law.[3]

The measure, however, was defeated by the State Senate in March 2005 after the U. S. Department of Justice sent a letter to North Dakota attorney general Wayne Stenehjem stating that online gaming "may" be illegal, and that the pending legislation "might" violate the federal Wire Act. However, many legal experts dispute the DOJ's claim.

North Dakota Rep. Jim Kasper (R-Fargo), the author of the legalization bill, has vowed to continue his efforts. He states that he is "not putting away the idea of getting into Internet gaming licenses in North Dakota" and that the "revenue we missed is too great to pass up." Kasper has also stated that he will introduce the legislation in the 2007 session of the North Dakota legislature.

In response to this and other claims by the DOJ regarding the legality of online poker, many of the major online poker sites stopped advertising their "dot-com" sites in American media. Instead, they created "dot-net" sites that are virtually identical but offer no real money wagering. The sites advertise as poker schools or ways to learn the game for free, and feature words to the effect of "this is not a gambling website." Televised ads still feature the dot-net conceit but print ads have been trending back toward advertising the dot-coms directly.

In July 2006, United States federal agents, citing the Wire Act, arrested BetOnSports CEO David Carruthers in Dallas, Texas while he was changing planes. He was traveling between Costa Rica and the United Kingdom; in both jurisdictions online gaming and poker are legal and regulated.[4]

Later in the year a similar event happened in France, where Norbert Teufelberger and Manfred Bodner, the CEO's of bwin, [5] were giving a press conference. The arrest was made due to offenses against the French gambling laws.

Since many banks and credit card companies will not allow direct money transfers to online poker sites, electronic money transfer businesses provide online “e-wallets” that players can load from a bank account, then transfer the funds directly to the poker site. The advantage of these services is that it makes it easy for people to transfer money between different poker sites without the money going back to their bank accounts.

On October 13, 2006, President Bush officially signed into law the Safe Port Act, a bill aimed at enhancing security at U.S. ports.[6] Attached to the Safe Port Act was a provision known as the Unlawful Internet Gambling Enforcement Act (UIGEA). According to the UIGEA, "unlawful internet gambling" means to place, receive, or otherwise knowingly transmit a bet or wager by means of the internet where such bet is unlawful under any law in the State in which the bet is initiated, received, or otherwise made. Thus, the UIGEA prohibits online gambling sites from performing transactions with American financial institutions. As a result of the bill, several large publicly traded poker gaming sites such as PartyPoker.com, PacificPoker.com and bwin closed down their US facing operations. Some operations have not closed and it is still possible for some American players to play online for real money and even sign up for new accounts. The UIGEA has had a devastating effect on the stock value of these companies.[7]

Following passage of UIGEA, former U.S. Senator Al D'Amato joined the Poker Players Alliance (PPA). Part of the PPA's mission is to protect and to advocate for the right of poker players to play online. Sen. D'Amato's responsibilities include Congressional lobbying. The PPA has over 650,000 members as of August 2007.[8]

On April 26, 2007, Rep. Barney Frank (D-MA) introduced HR 2046, the Internet Gambling Regulation and Enforcement Act (IGREA). IGREA would modify the UIGEA by providing a provision for licensing of Internet gambling facilities by the Director of the Financial Crimes Enforcement Network. On June 8, 2007, the House Financial Services Committee, chaired by Rep. Frank, held a hearing entitled, "Can Internet Gambling Be Effectively Regulated to Protect Consumers and the Payments System?". Details of the meeting, including the archived webcast, are available on the House Financial Services Committee website [9]. Expert witnesses at the hearing testified that Internet gambling can be effectively regulated for age verification, money laundering issues, facilitation of state and federal tax collection, and for issues relating to compulsive gambling. As of August 2007, IGREA has 35 cosponsors. [10]

On May 3, 2007 Rep. Shelley Berkley (D-NV) introduced HR 2140, the Internet Gambling Study Act. This bill "provide(s) for a study by the National Academy of Sciences to identify the proper response of the United States to the growth of Internet gambling."[11] As of August 26, 2007, IGSA has 64 cosponsors.

On June 7, 2007, Rep. Robert Wexler (D-FL) introduced HR 2610, the Skill Game Protection Act. This act would legalize Internet poker, bridge, chess, and other games of skill. Also on June 7, 2007, Rep. Jim McDermott (D-WA) introduced H.R. 2607, the Internet Gambling Tax Act. The IGTA would legislate Internet gambling tax collection requirements.

How online poker rooms profit

Typically, online poker rooms generate the bulk of their revenue via three methods. First, there is the rake. Rake is collected from most real money ring game pots. The rake is normally calculated as a percentage of the pot based on a sliding scale and capped at some maximum fee. Each online poker room determines its own rake structure.

Second, pre-scheduled multi-table and impromptu sit-and-go tournaments are not raked, but rather an entry fee around ten percent of the tournament entry fee is added to the cost of the tournament.

Third, some online poker sites also offer games like black jack or side bets on poker hands where the player plays against "the house" for real money. The odds are in the house's favor in these games, thus producing a profit for the house.

These are also the three primary methods brick and mortar casinos derive profits from operating poker tables.

Integrity and fairness

As with other forms of online gambling, many critics question whether the operators of such games—especially those located in jurisdictions separate from most of their players—might be engaging in fraud themselves.

Internet discussion forums are rife with allegations of non-random card dealing, possibly to favour house-employed players or "bots" (poker-playing software disguised as a human opponent), or to give multiple players good hands thus increasing the bets and the rake, or simply to prevent new players from losing so quickly that they become discouraged. However, there is little more than anecdotal evidence to support such claims, and others argue that the rake is sufficiently large that such abuses would be unnecessary and foolish. Many claim to see lots of "bad beats" with large hands pitted against others all too often at a rate that seems to be a lot more common than in live games. This might actually be caused by the fact that online cardrooms deal more hands per hour. Since online players get to see more hands, their likelihood of seeing more improbable bad beats or randomly large pots is also increased.

Many online poker sites are certified by bodies such as the Kahnawake Gaming Commission and other major auditing firms like PricewaterhouseCoopers to review the fairness of the random number generator[12], shuffle[13], and payouts for some sites.

Differences compared to conventional poker

There are substantial differences between online poker gaming and conventional, in-person gaming.

One obvious difference is that players do not sit right across from each other, removing any ability to observe others' reactions and body language. Instead, online poker players learn to focus more keenly on betting patterns, reaction time, speed of play, use of check boxes/auto plays, opponents' fold/flop percentages, chat box, waiting for the big blind, beginners' tells, and other behavior tells that are not physical in nature. Since poker is a game that requires adaptability, successful online players learn to master the new frontiers of their surroundings.

Another less obvious difference is the rate of play. In brick and mortar casinos the dealer has to collect the cards, shuffle, and deal them after every hand. Due to this and other delays common in offline casinos, the average rate of play is around thirty hands per hour. However, online casinos do not have these delays. The dealing and shuffling are instant, there are no delays relating to counting chips (for a split pot), and on average the play is faster due to "auto-action" buttons (where the player selects his action before his turn). It is not uncommon for an online poker table to average ninety to hundred hands per hour.

This large difference in rate of play has created another effect among online poker players. In the brick and mortar casino, the only real way to increase your earnings is to increase your limit. In the online world players have another option, play more tables. Unlike a physical casino where it would be nearly impossible to play multiple tables at once, most online poker rooms allow this. Depending on the site, a player might play from 4 to 10 tables at the same time, viewing them each in a separate window on the computer display. For example, a winning player may make around $10 per 100 hands at a low-limit game. In a casino, this would earn them under $4 an hour. After dealer tips, the winning player would probably barely break even. In an online poker room, the same player with the same win rate could play four tables at once, which at 60 hands per hour each would result in an earning of $24/hour. Some online players even play eight or more tables at once, in an effort to increase their winnings.

Another important difference results from the fact that some online poker rooms offer online poker schools that teach the basics and significantly speed up the learning curve for novices. Many online poker rooms also provide free money play so that players may practice these skills in various poker games and limits without the risk of losing real money. People who previously had no way to learn and improve because they had no one to play with now have the ability to learn the game much quicker and gain experience from free-money play.

Finally, the limits associated with online poker are much less than the table limits at a traditional casino. On gambling sites, players can find limits as low as $.01/$.02. However, at most brick and mortar establishments the lowest limits are often $1/$2.

Bonuses

While the practice of comping players with free meals, hotel rooms, and merchandise is quite common in B&M casinos, online poker rooms have needed to develop new ways to reward faithful customers. The most common way of doing this is through deposit bonuses, where the player is given a bonus code to enter when placing money into an account. The bonus code adds either a percentage or a set amount of chips to the value of the deposit. One should be aware that these are not up-front payments. The bonus is released in a piecemeal manner in accordance with the number of raked hands played. In addition, several online cardrooms employ VIP Managers to develop VIP programs to reward regular players and additional bonuses exist for players who wish to top-up their accounts. These are known as reload bonuses.

Compatibility

Online poker rooms typically operate through a separate piece of software. This may be cross-platform, for example using a Java Applet, allowing the programme to run equally well on various computer systems such as Windows, Linux and Mac OS. However, many online poker rooms offer downloadable programmes designed only for Microsoft Windows which require a compatibility layer such as Wine to run on Macintosh or Linux computers. Some sites do make available clients that run natively on Mac or Linux.

Some mobile content providers have started offering poker on portable devices (mobile phones, PDAs). The functionality of mobile online poker software is much the same as computer-based clients, albeit adapted to the interface of mobile devices. The player must be able to receive a cell phone signal in order to play.

Online poker portals and forums

Online poker portals are websites offering poker-related content. Examples of such content could be news, tournament results, strategy articles or reviews of online poker cardrooms. Some portals have a considerable amount of content, while others attempt to act as mere conduits to other sites, where actual gambling games are offered. Poker forums exist that discuss poker strategy, cardroom information, gambling news, and other topics.