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Commencing: The Lock Poker Blame Game

(Author’s note: The opinions expressed herein are those of the author alone, and do not necessarily represent the opinions or beliefs of FlushDraw or its owners.)

Last weekend’s apparent demise of Lock Poker, a site which had failed to honor players’ withdrawal requests for periods of up to two years, has unleashed an expected uproar of opinion on the matter of Lock and its thievery in particular and the reality of grey-market online poker sites in general.

lock-poker-logoOpinions are cheap, of course, and this one can be added to the list.  There’s no shortage of blame to spread around. However, much of the noise emerging in the wake of Lock’s apparent cessation of services is instead a selective blaming of certain victims to support one’s personal and business agendas, and that’s as good a starting point as any.

The misdirected blaming ought to stop, not that it will.  Lock’s true primary culprit was Jennifer Larson, the former Bodog worker from Vancouver who set out on her own with a skin and a plan to steal her way to the top.  Thanks to a power void in the US-facing market, caused by the United States’ “Black Friday” clampdown, Larson and Lock were able to capture market share that such an operation should never had the chance to grab in the first place.

Lock Poker in its earlier days was never anything but bad-faith deals and broken promises with other sites and networks.  When those industry doors were finally shut, it’s no surprise that player balances were the next thing to be swiped.

There is a ton of blame to go around, and the magnitude of the Lock theft was certainly enhanced by several classes of “aiders and abetters,” to borrow a phrase.  However, losing sight of the core theft and crooked operation that Lock always was does the poker world itself no favors.  I’ll get to some of those secondary people who acted greedily and venally, yep, naming some names as well, but with the understanding that all that guilt is secondary, and it spreads across all parts of the poker world.

Seth Palansky, the vice president of corporate communications and editor-in-chief for Caesars Interactive, issued an overly harsh comment which itself drew plenty of heated criticism in reply.  Palansky responded to a Tweet from poker writer Steve Ruddock, who was looking for comments from some of Lock Poker’s victims.  Responded Palansky, “@SteveRuddock I’m not sure screwed is accurate. Play with fire, get burned. The risks are quite known. No victims here. Greed wins.”

I get where Seth is coming from, as one of Caesars’ corporate execs, and he was on the ground at the Rio to witness the WSOP itself being virtually overrun by online sites offering unofficial satellites to the WSOP.  That practice still continues, though Caesars rightly views the WSOP as its property. It means there’s no love lost between Caesars and all the grey-market sites that have continued running those non-authorized satties, up to this very day.

Still, when Palansky writes, “No victims here,” he’s painting with a too-broad brush.  The implication: All players who played on Lock deserve to lose their money for playing on, to paraphrase, a shady grey-market site.  There’s certainly some caveat emptor (“let the buyer beware”) truth to the point he’s making, but players fall across a spectrum, from very knowledgeable people about the industry to those who just wanted to play a little bit of poker.

Some of Lock Poker’s victims are exactly that — victims.  They were led astray by a thieving site operator, Jen Larson, and a secondary echelon of affiliates and sponsored pros who decided that taking the money was easier then doing the ethically right thing for their visitors, readers and fans.

Some Lock players were greedy, too.  They jumped at under-the-table rakeback deals offered by Larson and Lock, the offering of which helped to gut other, more financially responsible online rooms.  It’s also true that such veteran online players, as noted today by US player advocate Curtis Woodard, may represent a hugely disproportionate percentage of Lock’s largest (in dollar amount) victims.

For those players, who themselves were manipulating a system for short-term gain, I don’t have tons of sympathy myself.  I find them similar to the players who returned immediately to UltimateBet and Absolute Poker after the insider cheating scandals at those two sites, justifying it on the grounds that “the games were soft.”

That didn’t work out so well, either.

Not all of Lock’s players fell into that category, however.  The true victims are those online novices who were deluded into depositing on the site, in particular in the past couple of years, when the site’s problems were glaringly obvious to those with more industry experience.  New players are less likely to understand why Lock was always a site to avoid, and that has to be acknowledged as well.

Then there’s the political side of the Lock debate.  In the US, many poker-industry people have spent significant hours decrying the Lock collapse as the inevitable risk of an “illegal” site offering services to US players.

Except, the offering of online poker by Lock and many other US-facing sites wasn’t illegal.  It wasn’t illegal as long as they didn’t offer services to players in individual states where online poker is barred by law.

Traditionally, US-facing sites blocked players from between 11 and 14 US states, based on state-level regulations that banned online gambling, if not all forms of gambling itself (such as Utah).  The state of Washington is a prime example; others included Maryland, Louisiana, New York, Wisconsin and even Illinois.  Nevada, New Jersey and Delaware were all blocked by the majority of grey-market operators as soon as they officially regulated online poker, because the laws that created those markets specifically banned unlicensed operators.

But some people, even some -smart- people, can’t get it through their heads: In the United States, an activity is generally legal unless it is specifically legislated to be illegal.

The United States has no law at the federal level banning the playing of online poker.  Even more, the United States has -never- had a federal law banning the playing of online poker.  To complement that, most US states -also- do not have laws barring players from playing poker online.

Thus, it has never been illegal for most American poker players to play on online sites, and it has never been illegal in an international sense for offshore sites, outside the US, to offer its services to one and all.  And if Americans chose to play there, so be it; those sites and jurisdictions were outside of US jurisdiction and simply not subject, in many cases, to the long arm of US law.

That cuts both ways.  Since the sites and companies were outside US jurisdiction, players of Lock and many other failed online-gambling sites have had little recourse to pursue their lost funds, after the fact.

Confusing the two is wrong.  “Caveat emptor” does not and never will equal “illegal”.  The players aren’t breaking the law by playing.  Since they aren’t, the offshore companies aren’t breaking typical host-jurisdiction laws which state that a company can’t willingly break the law in other countries.  That’s exactly why several US-facing online sites departed Nevada, New Jersey and Delaware after those states introduced formal regulated online-poker frameworks.

And speaking of “illegal,” that’s a term bandied about way, way too often in terms to all poker sites which have serviced US players.  To digress briefly from Lock itself, OnlinePokerReport’s Chris Grove is a consistent and seemingly intentional example, which is somewhat of a shame, because the smart and hard-working Grove does a lot of other great work.

But a Tweet such as this from Grove today does its author a disservice: In an unrelated, non-Lock conversation today, about poker content sharing and attributions, Grove wrote, “… I won’t share content from sites that promote illegal us-facing [rooms].”

Back in 2011, Grove opined repeatedly and loudly that it was illegal for Americans to play on offshore sites.  Except it never was, even if the FBI and DOJ liked to pretend otherwise to make their pseudo-enforcement roles easier, until US Attorney General Eric Holder was finally forced to acknowledge in an important late-2011 legal opinion that the playing of poker by Americans on offshore sites was legal, not illegal.

Grove and his OPR site don’t talk about that Holder ruling too much.  Matter of fact, there isn’t even a story on the site about the current Lock Poker situation.  Grove appears to be trying to steer OPR to a major-affiliate berth in a yet-to-develop US regulated market, and that’s fine, but misconstruing past realities and continuing to bandy about “illegal” regarding offshore (relative to the US) online poker is yet another disservice to readers and poker players, including Lock’s victims.

How does that apply to the Lock situation, other than the tweet’s timing?  In my opinion, Lock Poker and Jen Larson have broken lots and lots of laws.  But offering online poker to residents of US states where no specific ban exists isn’t among them.

Let’s move on.  People will use situations such as the Lock Poker fiasco for their own personal and business gain, and this week has provided way too many examples.  Let’s look more directly at Lock Poker, its executives, affiliates and sponsored players, and evaluate each.

Primary Owners / Core Executives

Jen Larson, the company’s CEO, is the primary villain.  Most of Larson’s immediate subordinates and business associates were completely shielded from public view, even as Larson herself largely prevented even so much as a picture of herself from emerging for public consumption.  Non-lawbreakers rarely take such precautions, though exceptions exist both ways.

Recent revelations from one of Lock’s former co-affiliate managers, Shane Bridges, offered up the names of several other Lock executives, now confirmed to have ongoing roles with the site.  Those included lead programmer Brendan Young, Lock Poker “Team Manager” James Erwood, and Olga Racekova, Larson’s reputed significant other who was also an undefined executive of the site.  Bridges himself often served in a lead PR role, and several of his statements in the 2013-14 period were proven out as lies.  Bridges himself eventually left Lock — according to him, over nonpayment of salary — and still waited months to release information about the company’s misdeeds.  One other Lock exec, Gerard Poltorok, is mentioned in the affiliates section, next.

Culpable Affiliates

This is the most difficult section to write, because of the interdependent nature of poker media and affiliate operations.  While Lock’s history and business practices were always shady, the red flag that should have caused all affiliates to take a cold, serious look at the company was when it fell months behind in processing withdrawal requests of its customers.

There was, simply and finally, no excuse for the failure to pay cashouts except for the money being gone.  And when Jen Larson spent what must have been a couple of million dollars to host a lavish retreat for Lock execs and sponsored players in Portugal, the writing was clearly on the wall.  That retreat was in May, 2013, and after another month or two, with no improvement in withdrawals, it was quite evident that the company’s operating capital was being embezzled from the top.

Former affiliates who carried Lock advertising didn’t leave all at once.  It was an ongoing process, and each and every Lock affiliate had to make the cold decision to sever the relationship.  Most did, particularly when the unpaid cashout request queue stretched well past a year in length, and Lock’s customer-service reps were repeatedly shown to be lying about the company’s state of affairs.  A few affiliates, however, scorned their fiduciary responsibilities to their readers.

It’s hard to draw a line and say that Affiliate A has probably contributed to an ongoing fraud and Affiliate B hasn’t, but a couple of qualifying considerations exist.  One of those is the length of time that Lock Poker existed while clearly being in a fraudulent state, and the great pains that a few affiliates took to not acknowledge this while hiding the reality of Lock from their readers.

The other consideration is far more subjective: In my opinion, a large, established affiliate or poker-news site has far more fiduciary responsibility toward its readers than some fly-by-night link farm that no one visits.  This is simply because the damage that the large site can cause to its readers and to the poker world as a whole is far, far greater.

There are lots of affiliates that can be accused of yanking their Lock Poker ads and links way too late.  But in my opinion, there are three that acted in an especially egregious manner:

Gambling911 (and its owner, Chris Costigan): Amid the furor of the Portugal retreat, G911, the poker world’s National Enquirer, ran an exclusive two-part softball interview with Lock’s Jen Larson that neatly sidestepped all the hard issues and lies being spewed by the company.  Costigan was himself rumored to be an invitee to the Portugal retreat, and ran Lock ads for well over another year;

CardPlayer (and the Shulmans, the company’s guiding hands): Continued to run significant Lock advertising well after the site’s cashout problems became feature stories in most other poker-news outlets.  CP never mentioned any of that, even as tracked and non-honored withdrawal requests by players had already been proven to languish for a year or more.  CardPlayer simply did not care enough about its readers to cancel its ad contract with Lock in a timely, responsible manner.  Given CP’s prominence and long history, that was, in this writer’s opinion, clearly unethical;

Gerry Poltorok, owner of sites such as PokerNewsBoy and PokerForums.org.  Poltorok, who industry insiders have told me was generally well-respected and liked in the biz, also served as Lock Poker’s affiliate manager (or co-manager, alongside Bridges), while also maintaining his own affiliate sites.  Nowhere on those sites, to the best of my knowledge and research, did Poltorok ever acknowledge his role in promoting to his readers and customers the site which he also worked for.  That’s a blatant conflict of interest and an abuse of readers and customers.  Perhaps not illegal, but certainly unethical.

Poltorok also promoted Lock until late in 2014, but no longer appears to have current links to the site.  That Poltorok’s links are gone and that his own sites now seem to be gathering webdust is another indication that Lock is really gone for good.

There are several other affiliates that fall not too far short of these three.  Still, I think that’s the worst of it.

Sponsored Players:

Lock Poker signed a high number of sponsored players, relative to its market size.  One of those, José “Girah” Macedo, was involved in his own scandals, and needs little further mention.  Macedo was gone by the time Lock’s worst problems emerged, and the tale of sponsored pros really should focus on those who kept wearing Lock gear and promoting the brand when no realistic evidence of company solvency or viability was forthcoming.

Lock sponsored roughly 30 players, and about two dozen of them went on the Portugal retreat, where Larson lavished them with the surroundings and promised the company would get better soon.  The purpose of the kool-aid, of course, was to keep the sponsored players busy doing their guerrilla marketing, since more traditional affiliate channels were already drying up.

The Lock-sponsored player who’s gotten the most bad press from the site’s nonpayments and apparent shuttering was probably Bryan “PrimordialAA” Pellegrino, with Melanie Weisner running a strong second.  Both made a series of bad decisions regarding Lock, with Pellegrino catching a ton of heat on poker discussion forums for his apologetic postings and regurgitating of Larson’s lies that the company’s fortunes were improving.

Speaking of Pellegrino, this week he’s issued yet another long-winded, rationalized apology on the topic of Lock, over at 2+2.  I started chuckling at Paragraph Three: “I get approached by Lock Poker about a pro deal, they had actually offered me a deal a few years before this that I had turned down because it seemed kind of sketchy the owner just hopped onto Skype and started talking to me…”

Really?  All that’s happened and Pellegrino still can’t say “Jen Larson” by name?

Gullibility and greed is a bad combination. To paraphrase a famous quote, it’s hard to see the truth when one is being paid not to look.  But Pellegrino?  And Weisner?  These are B-listers as sponsored pros.  People should really be pissed at the A-listers whose names offered far greater brand recognition and implied reputability, and likely lured far more new players and deposits to the site.

People like Michael “The Grinder” Mizrachi, who appears as though he’ll put his name on anything in exchange for a few bucks.  Mizrachi may be poker’s all-time leader for serving as the paid frontman for bad poker sites and services.  They fail, he dumps his patches and goes on to the next one without saying a word or even admitting problems occurred.  Easy life.

Or Eric “Rizen” Lynch, who has utterly gone to ground in the wake of the Lock affair.  Poker newbies don’t realize how prominent Rizen was in the online poker scene a few years back.  Rizen was, if I recall correctly, Lock’s first significant player signing and he was soon named the room’s poker manager as well, putting him in a corporate role that bears some form of examination.

Eric Lynch has said not one word about his role at Lock or the company’s demise, perhaps upon the advice of legal counsel.  I was never a Lock player, so I have no legal cause against the company or its owners or agents.  However, if I was a US-based player looking for some form of legal recovery, the Kansas-based Lynch is certainly an inviting starting point.  I wouldn’t believe that Lynch, known as a quiet family man, was involved in any way with Larson’s Ponzi-style fraud.  But I do believe it is far past time for Lynch to share all he knows about Larson and Lock’s operation.

As I mentioned earlier, there’s a ton of people who share secondary blame in Lock Poker’s sad tumble into history.  This lengthy piece could easily be twice as long.  Yet the primary culprit always was Jen Larson, the schemer who snuck into a temporary market weak spot and turned out to have nothing to offer at all.  Whatever Lock was, it stole from others, and that’s how it will always be remembered.

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