Longtime casino watchdog John Mehaffey claims the WSOP is making baseless legal threats against him

[Dan Druff]

Very interesting read: https://vegasadvantage.com/wsop-poke...-legal-threat/

John Mehaffey was known as "Pokeraddict" on 2+2 before changing his name there to simply "John Mehaffey".

He writes blogs and articles about casinos and Las Vegas, and tends to be fair and thorough when he does so. Occasionally his articles have sparked some controversy, but for the most part, he is well respected and not known as any kind of provocateur.

He has posted a few times over on this site, and I've always respected the guy.

The problems all began in July 2017, when Mehaffey wrote an article bashing the support on WSOP.com.

The article complained about an experience John had there at the time, where he had deposited $400 cash at the Rio cage, played a fair amount on there for a few weeks, and attempted to cash out $411 ($11 profit plus his original $400). WSOP.com refused to let him cash out, stating that he hadn't played enough to cash out so soon -- which they're not allowed to do. Eventually WSOP.com dropped that angle and started making him jump through ridiculous hoops to "prove" the $400 deposit and a previous $25 deposit were legit. This was especially ridiculous because a cash deposit at the Rio cage clearly couldn't be fraudulent in any way!

He wrote the above-mentioned article about his experience, and shortly after that, received an e-mail telling him that his self-ban request was honored. When he replied that he never asked for a self ban, he was then told that he was actually banned for breaking their terms of service.

He attempted to report this to Nevada Gaming regulators in September 2017, but didn't follow up because of the October 1 Mandalay Bay massacre, and felt that he didn't want to cause a further distraction at the time.

In April 2018, John claims to have contacted Seth Palansky, VP of Corporate Communications at Caesars. Palansky has deep involvement in both the WSOP and WSOP.com. He appears to be on the same level as Jack Effel (WSOP tournament director), though his role tends to be more involving marketing and media. John claims that, while Seth was professional and polite in their April conversations, they also went nowhere. He claims that Seth justified the ban, and also stated that WSOP.com was very unhappy about his unflattering 2017 article.

I should stop and point out that I also had some customer service issues with WSOP.com (back when it first opened), and like John, I also published unflattering posts about my experiences. Seth Palansky e-mailed me at the time and stated he wanted to have a phone call with me about it, which we did. The call lasted about 45 minutes, and while Seth and I didn't see eye-to-eye about everything, the call was cordial, and Seth also gave me permission to discuss the call publicly (which I did). Admittedly, my issues were not as serious as the ones John faced, and they had mostly been resolved by the time I talked to Seth. But I stood by my criticism, even on the phone with Seth. I haven't played a lot on WSOP.com since then (it's fairly dead), so my interaction with them has been minimal.

Anyway, back to John's situation.

He e-mailed Seth that he would be taking the situation to gaming regulators. He claimed that it wouldn't be a formal complaint, but that he would be notifying them to basically force change going forward.

Palansky allegedly didn't take kindly to that, and according to John, Seth wrote this in response on August 6:

Of course, you can take any course of action that you feel you must. We aren’t threatened by any of it. We will take actions from this point forward to prevent you from spreading misinformation about our company and will do what we feel is necessary, including refusing your service at all our land-based properties as well, in addition to pursuing legal action against you.

John reports that he has not been sued and not been banned, as of the date of his article (September 27).

John is also not backing down, and cites current "anti-SLAPP" laws which he claims are on his side.

Nevada does have anti-SLAPP laws in place, which punish plaintiffs for filing frivolous lawsuits meant to chill free speech. Anti-SLAPP legislation first came into existence in California, meant to provide ordinary defendants an easier way to defend themselves against well-heeled individuals or companies attempting to use the legal system to silence people. When an anti-SLAPP motion for dismissal is filed, the court determines (through various mechanisms) if the lawsuit appears to have been filed simply to intimidate someone from exercising their right to free speech. If it is determined that's the case, the lawsuit is dismissed, the plaintiff has to pay the defendant's legal fees, and sometimes other penalties are assessed. Mehaffey already has some recent history in activism in support of anti-SLAPP laws in Nevada.


How do I feel about this whole thing?

Looks to me that John Mehaffey is in the right. It appears that he reported the true and accurate circumstances of his illegally delayed cashout, and then was banned from WSOP.com for no apparent reason, after writing an article about that experience.

WSOP.com has been around for years now, and it's time for them to clean up their customer service issues.

Rather than get angry at John for sharing his substandard customer service experience with the public, they should have reached out to him, made the issue right, and issued an apology.


I will concede that I am only reading John's side of the story. It is possible that certain details were left out, or perhaps John's claims are exaggerated. However, I don't find this to be likely. John has a great reputation in the poker and gambling world, and he has never been known to be dishonest or grossly inaccurate.

I hope that WSOP.com sees the error in their ways, and issues an apology to John about this entire mess.

[GambleBotsChafedPenis]

and caesars is a piece of shit company run by a bunch of fucking morons so that pretty much gives john a big feather in his cap...

keep going at 'em john!!

[Sanlmar]

and caesars is a piece of shit company run by a bunch of fucking morons so that pretty much gives john a big feather in his cap...

keep going at 'em john!!

This idiot is willing to expose himself to a 25-30% premium (Taxes) for the privelagr of playing on a legal site.

At that juice it is a better gamble to risk fraud.

The assumption that a legal site will treat you more fairly is debunked by examples like this.

The public ain’t buying legal gambling as a value proposition

Fuck Caesars and legalized gambling.

[sah_24]

So funny that people used to think legalized sites would be anywhere near what we had with Stars and Tilt. So far they have hired Iovation doing 0 research, and pulled multiple shady things like this on customers. Gaming is in their pocket so they will never get punished for retarded actions like this

P.S. Palanksy is a huge scumbag

[duped_samaritan]

So funny that people used to think legalized sites would be anywhere near what we had with Stars and Tilt. So far they have hired Iovation doing 0 research, and pulled multiple shady things like this on customers. Gaming is in their pocket so they will never get punished for retarded actions like this

P.S. Palanksy is a huge scumbag

Tilt stole everyones money though.

[Dan Druff]

So funny that people used to think legalized sites would be anywhere near what we had with Stars and Tilt. So far they have hired Iovation doing 0 research, and pulled multiple shady things like this on customers. Gaming is in their pocket so they will never get punished for retarded actions like this

P.S. Palanksy is a huge scumbag

Legalized poker has been a disappointment for various reasons, including the ones you mentioned.

Yes, it surprises me how many shady things have happened on the legalized sites thus far.

However, these sites are still far safer than unregulated sites, because ultimately there is regulation, and these sites are also backed by large US corporations. So there's just about zero chance of a Full Tilt "we can't pay you" situation.

BTW, while Palansky gets a lot of criticism, and while he can definitely be gruff/aggressive, the frustrating customer service and policy issues of WSOP.com are not his fault. He doesn't work on the operational side.

Let's just say that I'm not very impressed with the operational management of WSOP.com, and I think they need major changes on that front.

[Dan Druff]

and caesars is a piece of shit company run by a bunch of fucking morons so that pretty much gives john a big feather in his cap...

keep going at 'em john!!

This idiot is willing to expose himself to a 25-30% premium (Taxes) for the privelagr of playing on a legal site.

At that juice it is a better gamble to risk fraud.

The assumption that a legal site will treat you more fairly is debunked by examples like this.

The public ain’t buying legal gambling as a value proposition

Fuck Caesars and legalized gambling.

Not necessarily true regarding the taxes.

These sites do not withhold taxes from your cashouts. If you win enough, it will be reported to the IRS, but truthfully, any wins from an offshore site will also be obvious to the IRS if they want to look for it.

The days of getting your winnings on a Neteller ATM card and withdrawing cash anonymously are long over. (I never did this, but certain friends of mine at the time swore by it.)

You only owe taxes on net gambling winnings in the calendar year. So if you win $40,000 playing online, but lose $40,000 gambling elsewhere, you owe zero in taxes.

Of course, there's the matter of proof. There's not always a record of when you win and lose money in live gambling. Think of live poker, for example. So this is a self-reported affair.

The IRS has generally taken the position (not officially, but in practice) that they don't chase down relatively small claims of gambling losses offsetting gambling wins. So if you won $500k in a tournament and then claim, "I lost it all back that year" and don't pay any taxes, they may very well audit you and demand more information. If you do $10k worth of online gambling cashouts and report having lost $10k or more playing live, the IRS is very unlikely to demand such proof.

I am not advocating any kind of tax fraud here, but I have never known a single poker player to be audited for writing off claimed losses against relatively small-medium gambling wins.

John was playing very low limits ($20 sit and goes), so the tax implications here were pretty much nil for someone who does a good deal of gambling throughout the year.

BTW, John told me he might post here later about the situation.

[sah_24]

This idiot is willing to expose himself to a 25-30% premium (Taxes) for the privelagr of playing on a legal site.

At that juice it is a better gamble to risk fraud.

The assumption that a legal site will treat you more fairly is debunked by examples like this.

The public ain’t buying legal gambling as a value proposition

Fuck Caesars and legalized gambling.

Not necessarily true regarding the taxes.

These sites do not withhold taxes from your cashouts. If you win enough, it will be reported to the IRS, but truthfully, any wins from an offshore site will also be obvious to the IRS if they want to look for it.

The days of getting your winnings on a Neteller ATM card and withdrawing cash anonymously are long over. (I never did this, but certain friends of mine at the time swore by it.)

You only owe taxes on net gambling winnings in the calendar year. So if you win $40,000 playing online, but lose $40,000 gambling elsewhere, you owe zero in taxes.

Of course, there's the matter of proof. There's not always a record of when you win and lose money in live gambling. Think of live poker, for example. So this is a self-reported affair.

The IRS has generally taken the position (not officially, but in practice) that they don't chase down relatively small claims of gambling losses offsetting gambling wins. So if you won $500k in a tournament and then claim, "I lost it all back that year" and don't pay any taxes, they may very well audit you and demand more information. If you do $10k worth of online gambling cashouts and report having lost $10k or more playing live, the IRS is very unlikely to demand such proof.

I am not advocating any kind of tax fraud here, but I have never known a single poker player to be audited for writing off claimed losses against relatively small-medium gambling wins.

John was playing very low limits ($20 sit and goes), so the tax implications here were pretty much nil for someone who does a good deal of gambling throughout the year.

BTW, John told me he might post here later about the situation.

Reporting it to the IRS and it being obvious in case you are audited (which is a tiny tiny % esp with the agencies more concerned about politics) is not even comparable ... jesus christ Druff

[sebokcockshot]

This idiot is willing to expose himself to a 25-30% premium (Taxes) for the privelagr of playing on a legal site.

At that juice it is a better gamble to risk fraud.

The assumption that a legal site will treat you more fairly is debunked by examples like this.

The public ain’t buying legal gambling as a value proposition

Fuck Caesars and legalized gambling.

Not necessarily true regarding the taxes.

These sites do not withhold taxes from your cashouts. If you win enough, it will be reported to the IRS, but truthfully, any wins from an offshore site will also be obvious to the IRS if they want to look for it.

The days of getting your winnings on a Neteller ATM card and withdrawing cash anonymously are long over. (I never did this, but certain friends of mine at the time swore by it.)

You only owe taxes on net gambling winnings in the calendar year. So if you win $40,000 playing online, but lose $40,000 gambling elsewhere, you owe zero in taxes.

Of course, there's the matter of proof. There's not always a record of when you win and lose money in live gambling. Think of live poker, for example. So this is a self-reported affair.

The IRS has generally taken the position (not officially, but in practice) that they don't chase down relatively small claims of gambling losses offsetting gambling wins. So if you won $500k in a tournament and then claim, "I lost it all back that year" and don't pay any taxes, they may very well audit you and demand more information. If you do $10k worth of online gambling cashouts and report having lost $10k or more playing live, the IRS is very unlikely to demand such proof.

I am not advocating any kind of tax fraud here, but I have never known a single poker player to be audited for writing off claimed losses against relatively small-medium gambling wins.

John was playing very low limits ($20 sit and goes), so the tax implications here were pretty much nil for someone who does a good deal of gambling throughout the year.

BTW, John told me he might post here later about the situation.

U have to itemize in order to write off losses correct. If u use standard deduction which had just went much higher, u are screwed on tax part unless u have enough wins and losses to make it worthwhile to itemize.

[John Mehaffey]

Hi everyone. I figured I would post a few thoughts here.

First is that the article never gets written without the legal threat. I feel I gave them enough time and opportunities to walk it back or demonstrate that my reporting was inaccurate. At some point I must defend myself. I think threatening legal action after I said I was going to submit policy recommendations to Gaming to protect players is vile and compromises the regulation process.

I accept that we can all have different opinions and was going to let Gaming figure it out if the email was simply that we disagreed. However, in hindsight, it is good that all these issues are out in the open for discussion.

I have all the emails in question from WSOP.com and Seth. I am going to turn them into Gaming. I hope to have a face-to-face meeting with them in the near future. I am waiting to hear back.

The article was long enough without going into the overall operational deficiencies I see in WSOP.com's operations. I covered it in my policy recommendation letter to regulators though. I included the items already in that article, in addition to the ones below.

Nevada-based support

Suggestions I made included the requirement that support be based in Nevada. Ultimate Poker did this and its support was excellent. It is a requirement in New Jersey and jobs are one of the talking points for poker lobbyists. When I would ask CS its location, they would tell me they were in Antigua iirc. I have never heard of that changing. Basing those jobs in Nevada would improve our economy and I feel likely improve CS in the process.

Players eating losses due to geolocation failures

I suggested that Nevada poker sites be held responsible for its geolocation failures. If a player gets dropped due to it, the player needs a refund or at least a demonstration that the hand could not be won or that it was the player's fault. Set rules for how this is approached for it to not turn into angle shooting. I'm sure a site knows when it has issues and it is not the player's fault.

Appeals process for bans

I also suggested that for as long as Nevada has a monopoly site, there should be an appeals process for bannings. Players do not have protections if they get banned the way I feel I did.

Let's just say that I'm not very impressed with the operational management of WSOP.com, and I think they need major changes on that front.

I definitely agree with this. I cannot believe this has been allowed to go on for five years. A respected, well-managed, engaged site would be doing triple the business with an interstate monopoly, in my opinion. WSOP.com bounced around 190 average cash game players for a month before a recent uptick to about 225, according to PokerScout. I think that's pitiful.

Searching "wsopcom" on Twitter reveals a reason I feel is why. There are many complaints in there, nearly all of which go unanswered. I can see why a player would think the site does not care and just gives up and moves on.

I wish Ultimate Poker could have figured out the software issues. They would be dominating right now, in my opinion. They had everything else right.

[Dan Druff]

Not necessarily true regarding the taxes.

These sites do not withhold taxes from your cashouts. If you win enough, it will be reported to the IRS, but truthfully, any wins from an offshore site will also be obvious to the IRS if they want to look for it.

The days of getting your winnings on a Neteller ATM card and withdrawing cash anonymously are long over. (I never did this, but certain friends of mine at the time swore by it.)

You only owe taxes on net gambling winnings in the calendar year. So if you win $40,000 playing online, but lose $40,000 gambling elsewhere, you owe zero in taxes.

Of course, there's the matter of proof. There's not always a record of when you win and lose money in live gambling. Think of live poker, for example. So this is a self-reported affair.

The IRS has generally taken the position (not officially, but in practice) that they don't chase down relatively small claims of gambling losses offsetting gambling wins. So if you won $500k in a tournament and then claim, "I lost it all back that year" and don't pay any taxes, they may very well audit you and demand more information. If you do $10k worth of online gambling cashouts and report having lost $10k or more playing live, the IRS is very unlikely to demand such proof.

I am not advocating any kind of tax fraud here, but I have never known a single poker player to be audited for writing off claimed losses against relatively small-medium gambling wins.

John was playing very low limits ($20 sit and goes), so the tax implications here were pretty much nil for someone who does a good deal of gambling throughout the year.

BTW, John told me he might post here later about the situation.

U have to itemize in order to write off losses correct. If u use standard deduction which had just went much higher, u are screwed on tax part unless u have enough wins and losses to make it worthwhile to itemize.

Yes, but again, the only problem really comes when you get a W2-G. The IRS isn't likely to bother you about gambling winnings if you lost for the year, or if you won very little.

Most people who have won enough to get a W2-G are probably itemizing anyway.