James Thackston and the Harrah’s Software Pitch, Part 2
This week’s unraveling of the connections between anti-online poker activist James Thackston and his attempts to sell major software applications to the same industry included the publication of e-mail exchanges showing his desperate attempts, ranging from at least 2007 (if not earlier) to 2010 and beyond, in an effort to coerce gambling companies to purchase his company’s products.
As we reported in Part 1, officials at Harrah’s Entertainment (now Caesars), were targeted repeatedly by Thackston in an effort to sell his so-called eSAFE project, an online ID-security software platform pretty similar to what has been marketed by other online ID-protection companies, before and since.
Whether or not Thackston’s software had anything to add is itself a relevant question, one we’ll return to the future. But what is more important to the topic of the Harrah’s e-mails, as well as the even more blatantly “extortionate” (as described by PPA Vice President Rich Muny), is that the whole eSAFE software project may have been a fallback project of its own.
As Thackston himself has admitted, his interest in online poker dates back to about 2004, and it was in that summer that he ended up the recipient of a funding deal for software development, financed by Florida poker players Bill Byers and Hilbert Shirey. Dewey Tomko, a close friend of Shirey’s may also have been an investor.
What the available financial and domain records show is that Thackston started up several corporate and online entities over the span of several years to promote both concepts: the “eSAFE” identity-protection stuff and another concept, likely more profitable had it worked, of becoming a major online-payment processor.
For those that know anything about the online gambling world, payment processing has always been its darkest, shadiest corner, and Thackston, Byers, Shirey and perhaps Tomko (who, perchance, also co-owned a Costa Rica casino), wanted in on it. That’s how Thackston’s Concierge Holdings came to be. It is that entity that was being closed down when Thackston wrote his shakedown letter to Harrah’s which included this passage:
For the past 3 years, I have sought investment money from the internet poker industry to operate an internet payment processing company and to support the eSAFE legislation from that corporate entity. The most prominent targeted investors were Lyle Berman, Howard Lederer (Full Tilt), and Mitch Garber (Party Gaming).
Because I failed to raise the necessary investment, I have shut down the eSAFE project as well as the company that supported it.
That company, as the link shows, was Concierge Holdings Inc. It was designed to be the corporate entity behind a business called ProConcierge, for which James Thackston once had a website ProConcierge.com.
But then the UIGEA happened. FirePay left the US-facing processing market voluntarily. NETeller had its funds frozen. And in the midst of this, Thackston and his backers presumably decided that the payment-processing development wasn’t worth the risk.
Still, there was the other part of the company, which was all rolled up into Thackston’s Privatas, LLC company, which was to be the fulcrum for the “eSAFE” software. Thackston had a website for that as well, at privatasllc.com, and registered domains for other planned startups as well, with domains such as seagen.com.
Two federal US bills had been proposed in that same timeframe as well, which seemed to be good vehicles for promoting the Thackston’s “eSAFE” concept, even though they were arguably years behind the development curve of other identity-protection firms already serving online commerce. The first of those was Rep. Chip Pickering’s 2006 “Protecting Our Children from Age-Restricted Internet Products and Services Act.” When that bill was killed in committee, Thackston’s company tied its hopes to Rep. Shelley Berkley’s 2007 “Internet Gambling Study Act.”
The 2006 Pickering bill was a lousy piece of work, which was assailed by internet-freedom groups. In the name of protecting children, the bill, if passed, would have demanded nationwide verification steps that would have amounted, collectively, to full US government overview of any online commerce that could possibly be deemed as being “age restricted.” It would even have created a Department of Treasury office called “The Office of Electronic Funding Oversight” — shades of 1984, indeed — to ensure compliance.
Check out the summary of the Pickering bill for a great example of proposed government oversight run amok:
Requires Internet payment processing businesses used by sellers of age-restricted products or services harmful to minors (under age 17) to include: (1) an interactive age verification process; (2) a network of authorized money receiving businesses; (3) a designated Internet payment account for each customer; and (4) procedures for ensuring that the customer’s identity and age are independently verified.
Establishes in the Department of the Treasury the Office of Electronic Funding Oversight to coordinate federal efforts to prevent minors from purchasing age-restricted products or services on the Internet.
Prohibits noncompliant Internet payment processing businesses from processing financial transactions for the purchase of age-restricted products or services harmful to minors.
Authorizes the Attorney General or any state Attorney General to apply for an injunction or temporary restraining order to prevent or restrain a violation of this Act.
Imposes a fine and/or prison term of up to five years for violations of this Act.
Pretty easy to see why the thing died in committee, despite its Bible Belt backing. Yet that doesn’t explain it all, since this is where Thackston and his Florida backers came in, because they just happened to be developing software that they claimed would fit the very processing needs made mandatory by this bill.
Late this week, the PPA’s Rich Muny disclosed that Thackston and his backers spent $30,000 on a lobbyist in the last quarter of 2013, lobbying for legislation at the federal level that would restrict state’s rights, basing their efforts on the wild money-laundering claims by Thackston — which in turn are really just another desperate ruse by Thackston and his backers to sell their identity-protection software.
What Muny didn’t disclose, perhaps not being aware of, is that that $30,000 is a drop in the bucket.
FlushDraw can now confirm that Concierge Holdings, Inc., founded by Thackston and funded by his Florida poker-pro backers, has spent at least$470,000 since 2006 on lobbying efforts, largely through one lobbyist, Carl M. Biersack. Thackston and his backers, via Concierge Holdings, spent $380,000 from 2005 to 2007, when the initial efforts on behalf of Thackston’s eSAFE software seem to have been put on hiatus. It’s only recently, with the prospects of federal legislation regarding online poker, that the group’s efforts have been renewed. Biersack, formally of Balch & Bingham, remains the lobbyist purchased by Thakston and his backers, and has received $90,000 since 2012 into his own lobbying firm.
We’ll have much more on the strange arm’s-length relationship James Thackston has had with online poker over the years, include claims made just tonight by his hired PR mouthpiece, Cheri Jacobus, that current PPA Executive Director John Pappas himself once worked for Thackston’s eSAFE lobbying effort, if only in an unofficial PR role. Despite making the claim, neither Thackston nor Jacobus has yet to provide any proof of the relationship.