Straight Flush: The True Story of Six College Friends Who Dealt Their Way to a Billion-Dollar Online Poker Empire--and How It All Came Crashing Down . . .

by Ben Mezrich

  Scott grinned, rising halfway out of his seat.

  “Pay the man!” he shouted.

  With a sudden swipe of the back of his hand, he toppled the metropolis of chips, then scooped them across the felt, toward his own growing pile.

  It was a feeling better than sex.

  And still, he wondered.

  What if you could somehow tap into that on a worldwide scale?

  CHAPTER 6

  Look at this, I’m killing this guy.”

  “I think he’s going to cry. Talk about his girlfriend again.”

  Pete had just made it to the top step of the three-story walk-up, still a good ten feet down the institutional-style hallway from Scott and Brent’s new apartment, a few blocks from the frat house, but he could already hear voices, laughter, and the clink of glass bottles. Moving closer, he saw that the apartment door was hanging wide open, allowing the noise to travel unimpeded through the dilapidated building. No doubt the neighbors had grown used to this sort of thing, even though the brothers had moved in only a few weeks earlier. Still, whatever was going on inside the apartment at the moment seemed particularly raucous. He wondered if his friends had gotten into his Ritalin prescription again.

  Once he was inside the apartment, he shut the door behind him. There wasn’t much to the place—a cubicle of a living room, with a pair of couches that made the ones at SAE look positively regal, a glass coffee table cluttered with beer bottles, various remote controls, and a pair of potted plants that hadn’t been watered, leaves fraying and brown, stems dry enough to be smoked. All three of his friends—Scott, Brent, and another fraternity brother named Cal Teller, who often joined Scott at Stockman’s on his now regular visits—were gathered around Scott’s desktop computer, which had been set up on the plastic bar that served as the dining room table. Scott was at the keyboard, Brent and Cal at either of his shoulders. All three of them were drinking, and from the number of bottles on the coffee table, Pete could guess that they had been at it for a while.

  “What the hell are you guys doing?” Pete asked when none of them even acknowledged that he’d entered the room.

  “Tell him he’s got a small dick,” Cal said, still facing the computer screen.

  “Yeah,” Brent added. “Tell him you’re sitting outside his window with binoculars, and that you can see his dick, and that it is very small.”

  Pete removed his coat, looked for a hook or a hanger, then dropped it onto the floor.

  “Really, guys, if that is some sort of interactive porn site, you’re all truly pathetic.”

  Scott glanced back over his shoulder, saw Pete for the first time, and waved him forward.

  “No, man, you gotta check this out. This is so cool.”

  Pete walked across the room and pushed in next to Cal.

  The computer screen in front of them was filled with something that was definitely not porn. Whatever the site was, it was extremely rudimentary; everything on it was a dull sandy color, and all the writing was fairly blotchy. In the main area of the screen there was an oval object surrounded by little cartoon-character faces seated in suede chairs, with names beneath each one. And in front of each face, on the oval, a pair of cards, facedown. In the middle of the oval, three cards were laid out faceup.

  It took Pete a full minute to realize what he was looking at. It was a Texas Hold’em game in middeal.

  Scott was furiously typing—something about somebody’s dick and how small it was—and the words were appearing on the bottom of the screen, beneath a squiggly green border. When he stopped typing, another line of text appeared—the response, a lot of angry words, obviously from someone who didn’t like being told that his penis was small.

  “Is this some sort of a chat room?” Pete asked. “And is that a poker game you’re all watching?”

  Scott’s reflection was grinning in the glass of the computer screen.

  “It’s a poker game, all right. Real people, playing poker for real money.”

  Pete laughed. “You’ve got to be kidding me. You’re playing poker over the Internet?”

  “Well, no,” Scott said. “You have to have a credit card to put real money in. We’re just chatting with the douche bags who are playing. There’s no one editing the chat feature. It’s pretty funny how mad people get.”

  Pete headed toward the refrigerator to look for beer.

  “You guys must be pretty drunk.”

  “Yeah, maybe, but this is freaking awesome. We’ve got to do this.”

  Pete found a Budweiser, went to work on the cap.

  “You are doing it. You got a total stranger worried about his manhood. Mission accomplished.”

  A beer bottle sailed over the top of the computer screen and narrowly missed Pete’s head, crashing into the wall of the kitchenette. Scott was out of his seat now.

  “No, you idiot. This poker website. It’s awesome. I mean, the software really sucks and the graphics are horrible. These are supposed to be palm trees, and the faces all look the same. But this website—it’s genius. Even though it’s crap, there are like fifty people playing. And they’re taking a rake from every table, all night long. They’re minting money.”

  Pete came over to stand behind Scott again. He looked at the computer screen, a little more carefully this time. The graphics really were awful. But now he could make out the palm trees, and he saw what looked to be sand, and beachy waves in a corner.

  “What is this site? How did you find it?”

  “I made friends with one of the dealers at Stockman’s, and the guy told me he’d been making like three hundred dollars a week playing online at this site. It’s called Paradise Poker.”

  “I guess that explains the palm trees.”

  Scott went back to the keyboard, waxing philosophic once more about one of the players’ anatomy.

  “I mean,” he said, his fingers rattling against the keys. “We would do a hell of a lot better. Come up with something much more sophisticated and clean.”

  Pete pointed at the cards on the oval table. “You really think people are going to play poker on the computer? More than a handful of dorks with nothing better to do? Poker is a social game. It’s about reading the other players, it’s about the face-to-face competition. You know that way better than me. You’re at Stockman’s every week.”

  “But if I didn’t have to leave the house, I could play all the time.”

  “If you had a credit card,” Brent added.

  “Well, yeah, obviously. But most college kids have credit cards. And not just college kids play poker. If it were a sport, it would be the most popular in the country. More people play cards than baseball. And worldwide—God only knows how many people play poker around the world.”

  Pete shook his head; he just wasn’t buying it. Most intelligent people he knew would be terrified at the idea of putting their credit card on the Internet. It was 2000; the Internet had a long way to go before most would feel comfortable shopping over the computer, let alone playing poker. And then, of course, there was one even more important question.

  “Is this even legal?”

  “Sure, why not?” Scott said. “Everyone pretty much agrees that poker is a game of skill. And this isn’t like owning a casino—nobody is playing cards in your house. I mean, we have to do some research, make sure everything is by the book. I think this website is run out of South America somewhere. But I don’t see why anyone would have a problem with a poker website.”

  Scott went quiet, and Pete could see that he was deep in thought. Maybe he was a little drunk, but he wasn’t just kidding around.

  Still, Pete was far from convinced. Even if it was completely legal, and you found a way to convince people it was safe to use their credit cards over the Internet, Pete couldn’t help repeating what he thought was an insurmountable flaw.

  “I just don’t see it. Nobody is going to want to play poker over the Internet. No matter how many palm trees you fit on the damn screen.”

  In his min
d, the issue was settled. But Scott’s face was still giving off a glow. Pete couldn’t tell if it was the result of something internal that had sparked to life, or just the reflection from the screen.

  CHAPTER 7

  Ladies and gentlemen, we’ve begun our initial descent into Seattle-Tacoma International Airport. Please begin powering down any electronics as the flight attendants move through the cabin to prepare for landing.”

  Scott jerked awake as the cabin lights came on with the last few syllables of the pilot’s announcement—nearly upending his tray table with one knee while hastily reaching for the small leather attaché case that had slipped off his lap somewhere over the coast of California. The case felt so damn foreign against his fingers as he lifted it back up; he’d never owned anything that nice before. The material seemed too elegant and sophisticated. On its own, it would’ve been a great graduation gift, and Scott had been completely shocked when he’d learned that the case was really just an appetizer.

  The attaché once again resting securely on his lap, Scott stretched out against the full leather of his business-class seat, careful not to let his boat shoes flip over too far into the aisle to his right. The flight attendants were scurrying about, collecting the last remaining plastic cups from the passengers around him. For the hundredth time since they’d taken off, he couldn’t help registering how hot the attendants were—tall, tan, veritable amazons, probably wearing nothing besides bikinis beneath their pale blue uniforms. Scott grinned at the closest of the crew—a staggering blonde who was leaning over the passenger across the aisle to help with a difficult window shade. As she bent, her long skirt rode halfway up the back of her calves, revealing stockings and the heels of a surprisingly sexy pair of red shoes.

  A fitting end to an incredible trip. Scott turned away from the aisle, toward the window seat to his left. He was surprised to see that his dad was still fast asleep, and even then, Phil had a wide smile on his face. Though they had reconnected as father and son four years earlier now, it was still kind of amazing to look over and see those features, so similar to his own. Phil was a head taller than him, graying a bit at the temples, but nobody would’ve had any trouble picking him out as Scott’s dad. And probably because they had reconnected as adults, they behaved more like best friends than like father and son.

  Which was a big part of why the trip had been so incredible. Under normal circumstances, who the hell would want to go to Rio with his dad? But Phil—that was another story. The attaché case was a nice appetizer, but with Phil along, the trip had been one of the best graduation presents in history. No-holds-barred Brazil. Two weeks of pristine beaches, late-night parties, fancy restaurants, and uncountable bottles of fine wine. They took turns playing wingman whenever a string bikini was in sight. And even with twenty years on him, Phil was almost as good at chatting up girls as Scott. The flight back to Seattle was the longest that either of them had slept uninterrupted in two weeks.

  Scott almost felt bad letting his elbow fly over the armrest between them, gently poking at the soft area below his dad’s rib cage. There was probably still another fifteen minutes before the plane touched down, but now that the trip was over and they were on their way back to the real world, Scott couldn’t wait any longer.

  For months now, he had been getting his thoughts in order. He had spent hundreds of hours in the university library. And he was finally ready to take the next step.

  “Please tell me the plane had some sort of mechanical problem and had to return to Rio,” Phil said, yawning as he rubbed his eyes. “I can’t possibly wait until Brent graduates to make that trip again.”

  Scott laughed, though he knew his dad was serious. Even though Brent wasn’t actually related to Phil, the man was generous to a fault. And he had the money to make good on that generosity; he was one of the top investment bankers in the Seattle area. More important to Scott, Phil had built himself up from nothing. He was a true believer in bootstrap ideology—a staunch fiscal conservative who really and truly believed in the American way. Which was why there was no question in Scott’s mind about where he had to turn first. With the two of them trapped together in an airplane, even if only for another fifteen minutes, it seemed like the perfect opportunity to make his case.

  He carefully unzipped the attaché case and retrieved a stack of computer papers. Then he turned in his seat to face his dad.

  “I want to show you something I’ve been working on,” he said, his feet alive against the airplane floor. He could hear the gears in the wings churning; he knew he didn’t have much time. But the truth was, if he couldn’t make his case in a few minutes, it wasn’t going to be something that was worth doing anyway.

  “Please don’t tell me you want to try and save the world,” Phil said.

  “We can leave that to Brent and his soup kitchens,” Scott responded. “No, this is something a bit more practical. Take a look at this.”

  He handed his dad the first page from the stack on his lap. It was a screenshot of the Paradise Poker website. Beneath the shot there was a row of numbers, detailing everything that Scott had learned about the site.

  As his dad digested what he was seeing, Scott gave him the rundown. His senior year at Montana—just like at colleges everywhere in the country—everyone was talking about Internet ideas. The entrepreneurial spirit had captivated almost every dorm room, and Scott was no different; but he was pretty sure he’d come up with an innovative way to build a company that no one else had yet done right.

  “Poker?” Phil said, looking up from the paper. “Scott, I love playing poker as much as the next guy—but as a business?”

  “Not just a business,” Scott responded. “Big business. International business. Look at Paradise Poker. They’ve got about a hundred and fifty tables, maybe fifteen hundred regular players. They take a rake out of every game—nearly every minute of every day. Figure just a five percent rake, an average of sixty dollars per pot—that’s three dollars per game. If one table deals around one hundred hands per hour, that’s three hundred bucks an hour. Multiply that by a hundred and fifty tables, that’s like forty-five thousand dollars a day.”

  Phil looked at him, then back at the paper. Scott started handing over the rest of his research—calculations based on different gaming parameters, analyses of the handful of casinos that had poker rooms, which were really a tiny minority, because poker as a game of skill wasn’t considered a big money earner in Vegas. Even a short history of the game itself: how it had evolved from an eighteenth-century card game played by French royalty, then traveled to the Mississippi steamboats in the 1800s. And he finished with more research into how many people enjoyed the game today: college kids, high school kids, adults, distributed across all incomes and cultures.

  Phil took it all in, waited until Scott got quiet before asking the question.

  “And you’re confident that this is legal?”

  Scott nodded. He had spoken to lawyers at the University of Montana and even had a couple of meetings in Seattle. There was a consensus that if there wasn’t a law that said you couldn’t do it, it was presumed to be perfectly legal. The law that was usually applied to gambling, whether it be online or over the phone, was the infamous Interstate Wire Act of 1961. But every lawyer Scott had talked to was convinced that the Wire Act did not apply to poker. Scott pointed to a page halfway into the stack; on it was printed the entire federal statute. He encouraged his dad to read at least the first few lines:

  Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned . . .

  “It’s pretty clear that the Wire A
ct was designed to inhibit games of chance, specifically sports betting. When you look deeper into it—how it was passed and why—this seems even more obvious. Robert Kennedy was trying to take on organized crime, so he convinced his brother to make it illegal to bet on sports. That’s what the lawyers say, at least.”

  Phil leaned back in his seat, clearly impressed. He could see the passion in Scott’s eyes, and that was winning him over even more than the research. Phil was a businessman, and he knew that passion was more important than any numbers. You could sell an idea on passion.

  “This is some impressive work.”

  The seat belt light had just gone on over their heads, indicating that they were on the last leg of their approach into Seattle.

  “Okay, Scott, you make sure this is legal. And then you do it. I’ll write you a check for twenty-five thousand dollars to get you started.”

  Scott did his best to take the number in stride. To him it was an enormous sum of money. But he knew his dad wasn’t just being generous. The twenty-five thousand dollars wasn’t a gift; it was an investment. This was Scott’s one chance—and he intended to take advantage of it. And to do this right, he wasn’t going to be able to go it on his own.

  As the plane touched down onto the runway with the screech of tires against pavement, Scott’s thoughts were swirling forward. By the time they reached the gate, he knew exactly who he needed to call.

  CHAPTER 8

  I guess this is what you would call a real upstairs/downstairs kind of operation.”

  Scott gave Shane a friendly shove through the open elevator doors and followed two steps behind him. Even with the basement’s high, vaulted ceilings, the thick carpeting, and the well-constructed cement walls, the sounds of the party upstairs could still be heard, probably drifting down through the elevator shaft. Upstairs, Scott knew, it was all caviar and champagne. A cocktail party in full swing, even though it was barely seven in the evening and his dad had just gotten back from a business trip overseas. But down in the basement, it was a different scene altogether.