60 Minutes on CNBC Tackles Internet Gambling

On Tuesday night, a special episode of “60 Minutes on CNBC” dubbed “Gambling’s Aces” aired. The hour-long installment consisted of three past features that “60 Minutes” has shown about internet gambling, including the 2008 story about the Ultimate Bet and Absolute Poker scandals.

Steve Kroft’s exposé on the world of unregulated online poker kicked off night. The story originally aired on Thanksgiving weekend in 2008 and started off with online poker player Todd “Dan Druff” Witteles questioning, “You don’t know if the whole thing is legitimate. Even if all of the people sitting with you are legitimate, maybe the whole game isn’t.”

Run-ins with “Graycat,” “NioNio,” and “POTRIPPER” were chronicled as the story of the Absolute Poker and Ultimate Bet scandals unfolded.  The latter won at a rate of 15 standard deviations above the mean in online poker games, which was the equivalent of winning a one-in-a-million jackpot six straight times. The revelation came after site officials accidentally gave the “poker sleuths,” as Kroft referred to them, a spreadsheet with 65,000 lines of data that had all of the cards in thousands of games.

Kroft and a reporter from the Washington Post then traveled to Canada to visit the headquarters of the Kahnawake Gaming Commission, whose server hub houses 60% of all online gaming activity. Finally, in a rather showy segment, Kroft called Russ Hamilton’s home at TPC Las Vegas, only to leave a message. The Kahnawake Gaming Commission fingered Hamilton as the main person responsible for the cheating on Ultimate Bet and, three years after the story originally aired, no charges have been filed.

The second feature on CNBC last night focused on gambling mogul Steve Wynn. The story also originally aired in 2008 and began with the opening of the Encore in Las Vegas. Wynn casually told “60 Minutes,” “I wouldn’t [have opened the Encore] if I had a choice, but this project was started four years ago. These things have a huge lead time.”

Wynn collects art, but has a degenerative eye condition that is causing the loss of his peripheral vision. His father owned bingo parlors and the younger Wynn first visited Sin City at age 10. Wynn opened the Golden Nugget in Downtown Las Vegas and added rooms to the property before becoming its President at age 31. Then, he built the Mirage and the Bellagio on the Las Vegas Strip before selling them in 2000 for $600 million.

Interestingly enough, since “60 Minutes” first aired the story three years ago, Wynn’s personal wealth has plummeted from $3.9 billion to $1.9 billion.

The final segment shown as part of “60 Minutes on CNBC” last night centered on the rapid growth of internet gambling and online poker sites. Leslie Stahl produced the segment back in 2005 and then-MGM Mirage chief Terry Lanni trumpeted that if the company could offer internet gambling, it could instantly double its revenues.

Interviews with Senator Jon Kyl (R-AZ) that were taped about a year before the Unlawful Internet Gambling Enforcement Act (UIGEA) became law aired. Kyl told Stahl that internet gambling is “so easy to do. It’s so easy for kids to do. It’s so addictive.” Kyle then added, “Our kids have access to the internet. They’re frequently not supervised and you can run up a huge debt on your folks’ credit card.”

The highlight of the segment was Stahl’s 16 year old son using a MasterCard to deposit online. His purchase was declined at the first two sites he tried, but the underage gambler was ultimately successful on Golden Palace. He promptly dropped $100 in 10 minutes.

Lanni revealed what it would take for internet gambling to become expressly legalized and regulated in the United States: “When an enlightened President with an enlightened Attorney General says, ‘It’s legal in all these states, we tax it, and we regulate it. Let’s do it for the internet.’”

Disappointingly, “60 Minutes” claimed that online poker was illegal in the United States three times in the first minute. Check out CNBC’s official website for more details.