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Newsweek Follows Online Gambling Slam with Bitcoin Poker Piece

(Author’s note: The opinions expressed herein are the vies of the author only, and do not necessarily represent the viewpoints of FlushDraw.net or its owners.)

Hot on the heels of a highly skewed cover story that portrayed online gambling in a biased, negative light, Newsweek has returned to the topic of online poker with a shorter piece on Bitcoin-based online poker.  In “Introducing…Bitcoin Poker,” Newsweek writer Leah McGrath Goodman returns to the awareness of the poker world with a brief piece on how the virtual online currency is being used by online poker players.

newsweek-logoThe twist?  The latest Newsweek piece includes a special focus on the largest Bitcoin poker site, SealsWithClubs, with much of the piece created as a result of an interview between Goodman and SWC Chairman Bryan Micon, who heads up the fledgling marketing efforts of the Bitcoin-friendly site.

From one perspective, Goodman would seem to be the perfect choice to do a Bitcoin poker story for Newsweek, since her recent credits at the struggling weekly include features on both the advent of Bitcoins themselves and on the political framework in the United States over the eventual regulation of Internet gambling.

From another perspective, Goodman and her Newsweek editors botched those earlier two efforts so dramatically that it’s somewhat amazing they’d risk another dip into the same pool.  If nothing else, the latest story serves as proof that Goodman is a faithful contributor at Newsweek, and that her pieces are truly representative of the magazine’s values.  There’s no other explanation for why Newsweek would publish another online-gambling piece so soon, while the massive inaccuracies in her last effort, “Poker Face,” continue to remain uncorrected by the magazine’s publishers.

By best estimates, McGrath Goodman’s “Poker Face” contains 15 to 20 glaring factual errors or significant lies of omission, a level of journalistic inaccuracy so stunning that Occam’s Razor dictates that propaganda is the only purpose of the piece.  That it wasn’t tagged as an op-ed is all the more stunning.  Add that to McGrath Goodman’s earlier farce, which was supposed to be the public outing of the real founder of Bitcoins, but turned out otherwise, and this latest piece sits at the direct intersection of Newsweek’s biggest embarrassments of the year.

So what should we make of this latest from Newsweek?  Expectations have to be low, and yet, it’s not quite as bad as it could be.  On first read the number of horrid inaccuracies is way, way down, with perhaps the worst being the face-value acceptance as truth a statement made by US-based Bitcoin banking service Coinbase that “[online] gambling is illegal under US law…,” though that statement remains a blanket falsehood, as most forms of online gambling — particularly as it relates to participation by players — are legal in most US jurisdictions.

The story of Coinbase blocking gambling transactions for fear of FinCEN intervention has been reported here as well, and it represents another case of transaction overblocking that is unfortunately typical for banking and pseudo-banking firms doing business in the US.

Yet the meat of the story is McGrath Goodman’s not-as-inaccurate-as-one-might-assume rendition of the rise of several Bitcoin-based online gambling sites, which through Bitcoin’s own intrinsic design offer a level of anonymity to players, US-based or not.

Micon, the SWC frontman, offers plenty of detail on SealsWithClubs’ basic offerings, including its weekly Sunday “Big BTC” tourney, which is — roughly, since exchange rates vary minute by minute — at least a $5K guarantee event.  That’s all wrapped into a story of how BTC-based sites appeal to certain types of online users, and a parallel story of how numerous one-time US online players have migrated to other countries to continue to play on online sites, including the Ireland-housed SWC.

It’s all pitched as a counterculture exposé, of course, which fits into Newsweek’s political stance.  It’s something of a surprise that Micon cooperated with the writing of the piece to the extent that he did, given that he was among dozens of industry folk who went on blast toward McGrath Goodman and Newsweek concerning the horrible biases, omissions and falsehoods of the earlier piece.

What’s less surprising is that others in the industry have condemned Micon for serving as a source of info for the piece, despite the possibilities of what could euphemistically be described as collateral damage.  Poker Players Alliance veep Rich Muny and OnlinePokerReport editor Chris Grove (a faithful PPA adherent) were the two most prominent.  The pair’s attacks on Micon via Twitter were vitriolic, to say the least:

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A heated exchange followed, which was captured by a reader over at PokerFraudAlert.  Grove’s assertion was patently ridiculous, as there was no way in the world that Micon purchased that exposure; the most likely explanation is that McGrath Goodman promised the mention in exchange for being interviewed for the piece.  (For his part, Grove later backed off the implied intent of the statements and stepped away from the pending trainwreck.)

Muny’s statement was similarly troubling, simply because it reflected the same “the PPA’s way or the highway” belief that the organization and its executives espouse.

There’s no denying that anonymous and unregulated sites such as SWC are anathema to what the PPA would like to accomplish.  However, the PPA’s own ham-handed failures — highlighted by the group’s willingness to go to Utah to lobby on behalf of the Black Friday-doomed SunFirst Bank payment processing operation — proved beyond the doubt that the PPA’s claims to be a grass-roots player group were and are only true to the extent that the interests of players align with those of the PPA’s corporate benefactors.

Muny and Grove are right to be suspicious, of course: McGrath Goodman has proved more than willing to write an inaccurate story in order to fir her publisher’s presumed political agenda.  What the pair misses, however, is that the fringe story of SealsWithClubs and the birth of bitcoin-friendly is one of those rare stories that actually works for both sides of the debate.

On the pro-poker, pro-liberty side, SWC and Bitcoin-based e-commerce stand as examples of people standing up against overaggressive government intrusion.  On the conservative, “family values” side, SWC and Micon can be portrayed as anarchists who are out to break the law by whatever means they see fit, with the implied extension that Bitcoins and other virtual currencies and online poker are all threats, to varying degrees, to way of life that Newsweek thinks its target audience prefers.

It’s all cleverly written, too.  One has to credit McGrath Goodman to at least that extent.

If there’s a surprise to all this, it’s that SWC Chairman Micon stuck his head into the guillotine so willingly.  The apparent openness of the interview with McGrath Goodman aside, the piece isn’t meant to be friendly toward online poker.  That’s the greater worry for all of us.

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