Jenny Woo Interviews Poker Source Online's Jay Lakin

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As a lot of you know, sweet, outgoing Jenny usually does the Entertainment side of things. However, I had the opportunity to interview Jay Lakin, who gave Jenny a crash course on what¹s been going on in the gaming industry. I hope this interview will help many of you as it has Jenny.

Jenny: You starting, was that something you had in the works for a while or was it something that just fell in your lap?

Jay: Actually, was a spin off of an Ebay auction that my partner (his distant cousin) and I did. Basically what happened was, he and I were power sellers on Ebay. We were both into poker but the weekly basement tournament poker, so we really weren¹t very much for online poker.  He was looking around for someone to sell on Ebay, as he wanted to do cause he like to get into all these different kinds of things. He saw somebody giving away a poker book with a Party Poker sign up. And he thought that¹s weird, how can a guy be giving away a book just for someone signing up for Party Poker. He did a little research and he found out that PartyPoker had an affiliate program that paid you $50 for every depositing player you brought them.

He sat and did the math and he said, ³well let me see, the book with shipping is probably $25, the guy is getting $50 from Party, that¹s a 100% profit. He decided that he didn¹t want to copy somebody else¹s auction, so he decided to give away a set of poker chips. He put this auction up and he had this software that re listed every time something got sold. So his first day out he sold thirty to forty chip sets. He called me up that night and said, ³listen I need have dinner with you tomorrow night and I need to talk to you.² We got together for dinner and he told me what he had done and he said, ³I think I got something here².  And I said, ³I think you do too². We went out and bought as many poker chips as we could and we started doing this thing on Ebay.

While all this was going on, my partner thought that we should probably try to get around the Ebay thing, rather than pay the listing fees and commission fees and create a website to do this on. And so that¹s how came to be. Within a month, Ebay had kicked us off because they didn¹t want to have anything to do with online gambling. And because we had already started the website and we already had this database of hundreds of email addresses, we just emailed all these people and said, ³we now have this website and please tell your friends². Talk about viral. Within a couple of months there were places talking about us on the internet and it just took off.

Now we have just launched our newest site  a couple of weeksago.

Jenny: And how is that going?

Jay: That¹s going pretty well. The difference between the two is is more for the beginning player, somebody who¹s looking for information about online poker and the different sites out there. Basically, someone who wants to get a gift for listing their money.  So for example, someone comes to PokerSourceOnline and when they sign up for
PokerStars or FullTilt, we give them a set of poker chips or $50 Amazon gift card. There¹s about a dozen gifts they can choose from. is more for the established player and the knowledgeable player who is looking for the best poker bonuses on the internet. Because of our relationship with all the different rooms, we¹re able to negotiate the best bonuses from all the sites. So the players can come to and they can sign up for a poker room and get a great sign up bonus.

Jenny: You started a promising career on local and nationally syndicated radio shows that started in 1980 and lasted to 2004.

Jay: My last day on the air was December 31st 2004.

Jenny: Have any of your experiences or connections from radio reflected onto your world of online gaming?

Jay: No. The only thing that I¹ll credit my radio career in doing is giving me ability to talk with people, to communicate well and to be knowledgeable on a diverse area of topics. So that when I¹m at an affiliate convention, be it Amsterdam or London or Barcelona or recently Moscow, I can meet with people from various backgrounds, various ages, various interests, various cultures, and I can talk with them and develop a very good report very quickly. Which is a very good thing for PokerSourceOnline because I'm able to get the best deals from the rooms and in turn offer the best gifts to our members.

Jenny: Give a brief summary of The Unlawful Internet Gambling Enforcement Act (UIGEA) for those people that are just tuning in to what¹s going on or want to find out more with the legal aspects of the industry.

Jay: The UGIEA was enacted back in September of 2006 literally in the last moments of Congress. It was attached to the Safe Ports Bill, so most people didn¹t even know they were voting on it. It basically prohibited the transfer of funds from banks, credit card companies to online gaming establishments, but it carved out online lotteries, sport fantasy leagues,
and horse racing. So basically what Congress was saying to the American public was if you want to put $1000 on Seabiscuit in the fifth at Aqueduct, go right ahead. But if want to play one cent, two cent Texas Hold¹em on your laptop, then we don¹t want that. This obviously drove a lot of the major publicly traded sites out of the states almost instantly. PartyPoker left the day that Bush signed it into law and overnight I think lost 80% of their traffic. The only rooms that stayed were the rooms that were privately held and didn¹t have stockholders or a board of directors to answer to. Which is why PokerStars is still in the U.S and is now the largest online poker room in the world because they still take U.S. traffic.

And recently, just a couple of weeks ago the banks went in front of Congress and said, ³we can¹t enforce this law that you¹ve burdened us with. We have mortgage foreclosures and all this stuff that is going on. You¹re making us the police of the internet with the online gambling and we don¹t have the time the man power, or the money to do it and by the way, how are we suppose to tell the difference between somebody betting on a horse and somebody betting on a dog.² It¹s like going into a liquor store and you can buy Gin but you can¹t buy Vodka. My main thing about the UGIEA just so that everybody understands, I¹m not pro gambling on the internet or anti gambling on the internet. I¹m for letting people do whatever they want to do in the privacy of their home and whatever they want to spend their money on. The problem I have with the UIGEA is the hypocrisy of it. It¹s staggering.
Don¹t tell me that this type of gambling is good and this kind of gambling is bad. Either ban all gambling on the internet or allow all gambling on the internet.

Jenny: The (UIGEA) was a huge blow to the online gambling industry. How damaging has the reality been to not just you but all involved with this industry?

Jay: Well I can¹t speak for the industry as a whole other then what I had mentioned earlier about PartyPoker and a lot of the other sites losing a pretty big chunk of their traffic. But I can tell you what it did to PokerSourceOnline and that is that it gave us a kick in the butt. We realized that if we were to survive, which a lot affiliate sites in the U.S.  have not since the UIGEA for one reason or another, we have to go after the rest of the world. We were about 95% U.S. traffic when the UIGEA took place and we realized that there are millions of people in other countries that also play poker on the computer and why aren¹t we plugging those people, why aren¹t we marketing to those people. We do everything in house, we do all of our programming in house, all of our design, all of our customer service.  So we hired about a dozen or so people that spoke German, Portuguese, Russian, Swedish, and Spanish.

Jenny: Any Asian in there?

Jay: Hahaha, no. We didn¹t do Japanese or Chinese, because the poker rooms weren¹t asking for them. The poker room didn¹t come to us and say, ³ We want Chinese players and want Japanese players.² They said, ³ we want players from Brazil, we want players from Eastern Europe, we want players from the Scandinavian counties, etc.² So we hired these people and we translate our site now in seven languages and we started running advertising in Bluff Australia and Bluff EU and PokerPro UK and all the other places.  And here we are a year and a half after the UIGEA and were bigger and stronger than we were before the UIGEA. More than half of our business is now outside the U.S. and Canada.

Jenny: Well that leads to my next question. has been labeled as the largest poker affiliate in the world. As the percentage of U.S. players had dropped, what did you do to keep your head above water?

Jay: Yes it is. That¹s exactly what we did. We decided that we would just take on the rest of the world. We were basically turning lemons into lemonade.

Jenny: Speaking of lemons, How was the UIGEA passed? What went wrong and could it have been prevented?

Jay: Yes. The same way that the horse racing fat cats got their little niche carved out and the online lotteries and the sports fantasy guys got their little niche carved out. The online poker sites could of done the same thing, but they were too busy looking out for themselves. If they had banded together as they have now back then and hired the K Street lobbyists and learned the politician¹s pockets like all the other guys did, the UIGEA may not of happened in the first place. And if it did happen, poker may have gotten carved out as well. The good thing is that the online poker sites have learned from that mistake and they now do see that there¹s strength in numbers. They support organizations like IMEGA and they support the Poker Player¹s Alliance and people like that that are trying to overturn the UIGEA and have declared unconstitutional.

Jenny: What have you kept and changed in as a result of the legislation?

Jay: I think the only thing we have changed is that we now have a little flag symbol on the rooms that still take U.S. players. Hahaha. I think that¹s the only thing that we¹ve changed, other then as I mentioned the translation part. And we obviously redesign the site every couple of months just to keep it fresh and up to date. We¹re not doing anything differently,
we still give out the best prizes and offer the best service and 24/7 customer support. If anything we¹ve just gotten better.

Jenny: Give us a summary on the three major internet gambling bills, H.R. 2046, H.R. 2610 and H.R. 5767 that are currently in Congress.

Jay: Ok, 2046 is the Barney Frank bill and that basically license online poker rooms to internet protection against underage gambling, compulsive gambling and money laundering. 2610 is Bob Wexler¹s Bill, which would carve out games of skill, which most people consider poker to be, all you have to do is look at the final table of just about any WSOP event and you see the same faces time after time after time. 5767 is the brand new one. Barney Frank and Ron Paul have written and co sponsored and that basically prohibits the treasury and the Federal Reserve from implementing and enforcing the UIGEA. In fact either today (6-20-08) or Monday (6-23-08) it¹s going to be sent for mark up. Which basically means their going to set a date to discuss it.

Jenny: The Interactive Media Entertainment and Gaming Association (IMEGA) is a non-profit corporation founded in 2007. What has been their role in the industry? And give us an update on what they are doing today to help?

Jay: IMEGA originally went in front of Judge Cooper out of New Jersey to challenge the constitutionality of the UIGEA. Unfortunately, the judge found against them, but she also said that they could continue to pursue it in higher courts. Which is what IMEGA has been doing. It¹s a shame that IMEGA wasn¹t around pre UIGEA because with powerful K Street lobbyists that are part of it, they probably could of, if not stopped the UIGEA, they could of at least gotten poker carved out of it.

Jenny: In 2007 you were quoted in saying, ³The really sad part of this is that it¹s not the Phil Hellmuth¹s or my choice for Sexiest Pro Poker Player of 2008, Doyle Brunson¹s, that this is affecting². Explain to our readers what you meant when you said that.

Jay: What I meant by that was that people in their position have the ability to fund an online poker account, people that have access to foreign bank accounts. It¹s the invalid sitting in the wheelchair somewhere in the middle of North Dakota who doesn¹t have access to a brick and mortar casino that¹s being punished by the UIGEA. The average college student probably has a friend who is from a foreign country, who can create an account or transfer money from his account into their account. It¹s the professional poker player that has the way either through the industry or through a foreign bank account which most of them probably have to fund their online bank accounts. It¹s the little guy that doesn¹t have access to a foreign bank account, that doesn¹t have access to people in foreign countries, that doesn¹t have access to a brick and mortar casino that just wants to sit at home, take out their laptop or sit at their desk top computer and play Texas Hold¹em with strangers around the world.

Jenny: What advice would you give a politician on how to manage the online gaming market?

Jay: The same way that the U.S. based our constitution and our early founding fathers by looking at other countries, such as the Magna Carta. I mean the same way that Thomas Jefferson and Ben Franklin and those guys looked at other countries to write our constitution. That¹s what the politicians of today should do, than formulating how to license and regulate online gambling. They should look to Spain and they should look to South Africa and they should look to all the other countries that have successfully done this and use that as a guide.

Jenny: If you were in charge, is that how you would regulate it?

Jay: I would obviously have to look at how other countries are doing and see who¹s done it successfully and who hasn¹t. I just think that makes the most sense. Why not find somebody who¹s already done it, who¹s already got it figured out and then use that as the blueprint for the U.S. It¹s not brain surgery. We license gambling in Vegas, we license gambling in Atlantic City. You know, there are 48, I think, out of 50 states that have brick and mortar casinos. Just about every state has a lottery. It¹s not like gambling is something new in America. It¹s not like we haven¹t licensed or regulated gambling already. We know how to do this.

Jenny: I had asked Murray Sabrin, a supporter of online gaming who is running for the New Jersey Senate, what type of operators, companies would he be looking to participate in New Jersey¹s future online gaming industry if a license were passed and how he would keep those who were trying to take advantage of the situation out. Part of his answer included, ³if things are done by operators that have a good track record, they start slow cause they are new and they build their reputation on honesty and integrity. That's how small companies become eventually big companies.² Do you agree with that? And if not, how would you structure it?

Jay: 100%. You have to crawl before you walk. It¹s like these kids that get out of college and they think their first job is going to be a CEO. Obviously, if the state of New Jersey is going to start allowing online gambling or at least license online gambling sites in the state then they need to look at the big ones first, the ones that have the track record and
they need to start small.

Jenny: While we¹re on politics, whom do you plan on voting for?

Jay: I really don¹t know. I¹m a registered Independent. I vote for the person, not the party. My decision probably won¹t be made until I step in the booth and close the curtain. As far as gambling is concerned, my vote for President will have nothing to do with internet gambling. There are too many more pressing, important issues in America then for me to be basing my vote on that.

Jenny: What other information do you feel that needs to be out there for the public to know?

Jay: People can check out