Lee Davy talks to Daniel Negreanu about the recent PokerStars players meeting, his run in with the team at Operation Chokepoint, his views on charitable giving and more.
In this interview I speak to Daniel Negreanu about his recent involvement in the PokerStars players meeting in Montreal, his run in with Operation Chokepoint and the closure of his Bank of America account, how on earth people manage the flow of millions of dollars, his views of charitable giving and prop bets.
The interview lasted 70-minutes.
Below is a shortened version of that transcript. The audio is a little difficult in parts, but I strongly suggest you listen to the interview in its entirety if you get the opportunity.
What can you tell us about the PokerStars players meeting attended by Dani Stern, Daniel Dvoress, Isaac Haxton and yourself?
“It was a long meeting. It started around noon. I had a 7 pm flight, and they were still going when I left. We covered a broad range of topics. All things online poker, and the current and future state of the ecosystem. Overall, I think it was very productive. The players raised some interesting points of view and the presentation from PokerStars was very informative.
“The players signed an NDA, so they can’t talk about the specifics on the numbers of how the company is doing, or specifics about the ecosystem. So from that perspective, there isn’t a lot to share. What is important is the players left the meeting after seeing with their own eyes that changes were necessary. It’s debatable whether Stars made the right changes, but I don’t think there is any question that anyone who saw the numbers would have disagreed that changes were necessary.”
Did they go away happy?
“I wasn’t there until the end, but it seemed like everyone was happy. There was no resentment or anger. It was a very positive meeting from both side’s perspectives. Points were contested from both sides. Let’s call them healthy debates.
“I am not the representative of online poker. I am an ambassador type guy, but these guys are part of the online poker fabric. It’s important they got an opportunity to speak directly to the people making these decisions.”
Was David Baazov in the meeting?
“On and off; he’s a very busy man. But frankly a lot of the nitty-gritty details regarding the poker issues at a micro level, that’s handled by people who work with those numbers on a daily basis, not David.”
Is anything going to change?
“To be clear, the meeting was not a negotiation. Both sides knew that. Both sides knew the changes were going ahead. We did discuss the broken promise and the breach of trust from PokerStars. For most people the approach that angered them the most was us saying players were warned. I don’t think that’s fair. We are sorry because we screwed up.
“The goal of the meeting was to show the players in attendance what position we are in as a company. It was to show that the changes had to happen now rather than a year from now because the dangers of them happening a year from now outweighed the fact that a two-year promotional promise was going to be reneged upon to some degree.
“The Supernova Elite program is now a one-year program because it’s difficult to understand how the landscape looks year to year. What they saw on Jan 1, 2015, regarding the ecosystem, seemed very different by the time October came around as an example.”
Will the meetings continue?
“I know they will. David {Baazov} loved the idea of me facilitating meetings with the players. It won’t necessarily be the same guys. One of the people they specifically wanted to speak to was MeleaB. He posted a lot of information on his perception of the numbers and the truth. If he had been there, he would have seen how far off the numbers were regarding how he thought the pie was divvied up between players and the company.”
What side did you sit on?
“I think if you asked both parties they would say I wasn’t on their side. That’s where I am politically as well. I try to balance my views from a perspective of understanding both sides. My position in poker has evolved over the years. I look back at the way I handled the Howard Lederer thing and doing a video blog saying to take a baseball bat to the nuts. That’s not something I would do today.
“I understand that neither side will get everything they want, but are there common goals that we can focus on and move forward? The fact is a promise was broken, however, PokerStars will continue to operate. So how do we move forward together? There is no more benefit looking back at the way it was handled. We need to look forward to making sure the mistakes aren’t repeated.
“We need to understand that people’s perception of the company has been damaged by these issues. We need to talk about ways in which we can improve the ecosystem for players; increase the number of depositors and recharge and reinvigorate new depositing players. Without them, pros don’t make a living. If you don’t bring in recreational players, there isn’t a bonus system developed that can keep break even players from losing.”
Some people wanted you to leave when Alex Millar and Isaac Haxton left, what’s your view on that?
“Let me be clear on one thing. Both Isaac and Alex’s contracts were up, and they chose not to renew those contracts. There is a slight difference between that and breaching the contract and quitting early. My contract was not up at the end of the year. I have a multi-year contract, and I won’t go into the details of that here.
“That’s a sidebar to the bottom line issue of how I maintain my integrity despite the fact that the company I represent has done something I disagree with and hasn’t done a good job for the players. The truth is this isn’t the first time this has happened. You are not going to agree with every line your company takes.
“This one was a big one for me, and without a doubt, all of the options available to me were on the table. Ultimately I had probably more access than any other player regarding internal conversations with the CEO. About not only the necessity for the changes, but going forward what the company’s plans are. I genuinely believe that beyond this hiccup, based on the knowledge I have, not only will the company, and ecosystem do better in 2016, but poker in general will. Any trends that players will see regarding game toughness, they will change.
‘I would have made these changes seven years ago. I was screaming that we had major problems. It wasn’t evident to people when deposits in 2004 were coming in. It didn’t seem like an issue. But over time, it was clear to me that this system wasn’t making any sense.
“Imagine you have a house game and have nine friends coming over. Two are really bad, and seven are pros. Would you pay the pros to play in your home game or send a limo to the two weakest players who are creating the game? Why would you target anyone but those two most valuable players?
“I have never once in my life complained about rake structure. I have always looked at it this way: the market sets the price; you don’t like the game you can either find another one or don’t play. If I thought the rake was too high, I wouldn’t play.
“From my perspective, you should focus on the millions of people playing in the $0.50/$1 game. That’s what brings in the pros. If you are concentrating on the 24-tabling grinders, who are making the games less fun, that will lead to recreational players having less fun, meaning they are less likely to redeposit, games dry up, and pros can’t survive.”
Are Team Pros contractually obliged to keep quiet during these times?
“I can’t speak for other people and their contracts, but typically when you sign a contract when you have an endorsement type deal, there is usually a clause in there that refers to disparaging comments about the company and how that can bring you into a breach of contract.
“PokerStars as a company respect that I am not always going to agree with the company line, and I will flirt with that line. You could argue there are times when I may have crossed that line. I am always trying to be understanding of other sides. If you look at the other team pros and the fact that they haven’t spoke up it will be because they don’t want to take the chance I suppose.”
Talk to me about your recent issues with the Bank of America
“To be honest, in the end, it wasn’t a big problem. I have a business and personal account with Bank Of America. I was moving large sums between accounts, and this raised some red flags. I believe there are about 40 industries where these flags come up, and online gambling is one of them. It was frustrating, but in the end, no money was stolen or anything like that.
“It wasn’t the banks fault. I received a letter with what they needed to do with the account. The bank manager wanted to keep my business. He said it wasn’t in his hands. It was a government decision and not a bank decision.”
How do you manage millions of dollars?
“To tell you the truth, in 2003, when I was playing $4/8k limits I would keep 2-3 million Bellagio chips in a box, and that’s where it would sit gathering dust.
“Over the last 3-4 years, I have become more responsible. I had no understanding of how money worked. Someone would say, ‘If you put $5m in an account, voila you get $300,000 a year or something’, and I would think, ‘that’s a good idea, why don’t I do that?’
“I have put a big chunk of money into a Morgan Stanley Account with someone I trust. I gamble for a living, but I don’t gamble with my investments. I do very safe investments in municipal bonds, very little risk and nontaxable. The rest I have in different places here and there.
“I think it’s important to have a number put away, and the interest is far than enough to have my living expenses covered for the rest of my life.”
Throughout this incident did you consider switching to cryptocurrency?
“I haven’t learned enough about it. It seems very volatile to me. The prices are jumping and dropping, and that’s scary. I don’t know enough about it. It’s not a major concern of mine. I have financial advisors, and if they ever recommend it I may dabble, but not at the moment.”
Do you believe it will become an important part of online poker?
“I am not sure. Planet Poker was the first online poker room, and then others saw it as an opportunity, and we know what happened there. There is an opportunity to grow on the good start made by Bitcoin in the next 4-5 years.”
You recently tweeted in annoyance about people being critical of how other people gave to charity, can you expand on that?
“It was Andrew Barber. He is a very liberal leftist progressive type of guy. We have had debates and discussions in the past, and I have enjoyed them for the most part. Anytime someone critiques the way in which people give; I think they come from entirely the wrong place. I think REG is a very good idea, and people who believe in it should continue to spread the value of effective charities. They do a great job.
“What I don’t like is when someone says they are giving money to sick kids in a hospital in Toronto, and then they are jumped upon by people saying there are better ways to give their money.
“If you are passionate about something, if for example your wife feels emotionally touched by a man sitting on a bench freezing, and you can make a difference to him on a very small level, by buying him a hot drink and it warms your heart. I think emotions and feelings of the heart should matter at that moment. We are emotional beings, not robots.
“Animals rights for example. I understand that there are plenty of charities where people could say it’s a more effective way to stretch my dollar, but it matters to me. I love animals. I don’t think there is anything wrong with giving money to charities that belong to your heart and also REG type charities.
“I find an elitist view of how to live rightly is a dangerous path to walk down regarding judging people on how they are and how they choose to give. When someone gives from their heart, and then judging them for that, and suggesting they do something different, I find that appalling.”
There needs to be a balance. I also believe it’s important to research how effective your donation is regarding how it’s spent.
“I totally agree. Researching where your money is going is crucial. I do a charity event for St Judes each year, and they have been rated by various groups as one of the top charities regarding the percentage of funds that specifically go towards helping children.
“When I run an event we don’t pay anyone. Everyone is a volunteer. The work that St Jude’s does is fantastic, and I have done my research. It’s worthwhile checking out where the money is going and why. But if you ask the ultimate question: why do you give to charity? Most people will say that it makes them feel good. It warms their heart; It makes them happier. Where does anyone get off judging how people bring happiness into their life by giving?”
I get a little angry when I see people like Bill Perkins giving $500,000 to Jeff Gross, and $50,000 to Antonio Esfandiari for prop bets. What’s your view?
“If you are a pro gambler then part of your role is looking for situations that are positive EV. It’s less about how you choose to make your money as a pro gambler whether its prop bets for big numbers that you think you have an advantage in. You give 4% of your yearly income to charity, Who’s to say for these people that prop betting isn’t a part of that?
“You can still have fun with money, and people shouldn’t be judged because they could have given the money to charity. Its a slippery slope when we are trying to judge how someone puts their money into play. You can have a view, but regarding people making prop bets for big amounts, I look at that differently from them being responsible or using their money effectively.
“I am a pro gambler. I make bets because I think I have an advantage in the bet. It’s part of your job. It’s what you do for a living. People don’t make prop bets because they think they will lose. They make the silly bet because they believe they have the best of it.”
I think Antonio Esfandiari’s prop bet harms poker’s chances of being taken seriously as a professional eSport. What’s your view?
“I am going to disagree completely with you on this one. When I do interviews with mainstream media, they are always interested in these prop bets. What Antonio did, there is no condoning that, but when you see how he handled it; the way he apologized, the dedication of giving money to charity and the acknowledgment that he’s not a perfect person. That’s a story. That’s fascinating to people.
“These stories are what made poker attractive in the beginning. If you make poker professional, and nobody said anything outlandish during interviews, and anyone was similar vanilla I don’t see how on its own the game attracts mainstream interest. It attracts people because they love poker, but there are also people who want to see Phil Hellmuth lose or Mike Matusow shouting at someone.
“I believe if you want mainstream attention for poker, you don’t make it cleaner and more professional. I think stories like Antonio’s are more interesting and are more likely to cross over than four nice guys playing poker and doing nothing wrong.”
What he did is perfect to attract prospective players, but what about image and potential sponsors. Did he our chances of attracting the right sponsors into our game?
“I wonder? Whether he pissed in a cup or not, is that going to affect sponsors who were so close to making a deal? I don’t think so. Companies that sponsor athletes are always taking the risk that their player might end up drunk in a strip joint doing cocaine and shooting someone. Poker for years has not been conducive to mainstream companies because they have been skeptical of a gambling aspect.
“Moving forward into a sports version, into a league style system this could open up the interest to nongambling companies. Ultimately I don’t think these events or unprofessional instances has an effect. I don’t believe it has much of an impact. I don’t think people say, ‘I was willing to invest in poker, but someone went and pissed in a cup.’ I think it has more to do with the fact that people look like slobs most of the time: shorts, sandals, scruffy beards, stains on their t-shirts. If I am Lexus, then that’s not something that I want to associate my brand with.”
When interviewed, what is the one question you always want to be asked but never are?
“One that I like to talk about and enjoy sharing is the question: why do I share my views on how to be a better person, how to set goals, and how to live a better life? The answer to that is it warms my heart.
“I had a moment a few years ago. A woman came up to me. She wanted my autograph and a picture. She had a coke in one hand and a pack of cigarettes in another. And I said flippantly, ‘what are you doing with that? When are you going to quit.’ I bet her $10 she couldn’t quit smoking for a year. She giggled and laughed, told her kids about it, and they told her to go for it.
“I saw her a year later, 20 pounds lighter with a glow on her face. She said she stopped smoking and didn’t drink soda anymore. I gave her $10 a hug. I realized that one small conversation with that women sparked the trajectory in her life. It made a difference for her and her kids. She is a better role model now. If I get 1 out of a 100 to change I am happy with that. That’s why I will share my personal views on things because the result for those people warms my heart.”
And when she went home and told her husband that she had won that $10 bet, he said, “Darling, next time you make a prop bet with a poker player make sure it’s with Bill Perkins.”
