World Sports Exchange (WSEX) Blacklisted
A friend once told me if WSEX ever stiffed players, weâ€™d know the days of honest online gambling had come to an end. Strong player advocates for years, a leader in Antiguaâ€™s case again the United States, great customer support and the fastest payouts in the industry, I canâ€™t say I disagreed with his statement. However, times have changed.
The below story is an interesting read that Pokeraddict has written exclusively for publication here at onlinepokersites.co.uk. First, please understand the following:
- WSEX.com is gross default; as of June 2011, they are more than 16 months late playing Â£295,000 in requested player account withdrawals. This figure includes only whatâ€™s been reported to SportsbookReview.com.
- On December 16, 2010 the Antigua and Barbuda Financial Services Regulatory Services Commission posted notice WSEX.com is no longer licensed to operate out of Antigua.
- Online Poker Sites had added WSEX.com to our Blacklist and is recommending players avoid WSEX at all costs.
The Rise and Fall of World Sports Exchange
06 June, 2011 by John Mehaffey (Pokeraddict)
World Sports Exchange, commonly referred to as WSEX, was founded in 1996 in the Caribbean island nation of Antigua and accepted their first online sports bet on January 5, 1997. In its prime WSEX was one of if not the most respected betting sites. Players were offered very convenient deposit options and fast payouts. A majority of the players that used WSEX were from the United States. When the Unlawful Internet Gambling Enforcement Act became law in the U.S. the fall of the WSEX Empire and reputation soon followed.
Jay Cohen U.S. Trial
Jay Cohen was a co-founder and CEO from 1996 until July 24, 2000 which was the day he became the first person convicted of violating the Federal Wire Act of 1961 from a country where their business was legal. WSEX was licensed in Antigua which was one of the first countries in the world to license internet gambling businesses. Cohen was among 21 people indicted for illegal internet gambling under the Wire Act of 1961. He was found guilty and was sentenced to 21 months in prison and paid a $5000 fine. His maximum sentence could have been 19 years and a $250,000 fine. Cohen served nearly 18 months of his sentence and was on probation for two years.
Cohen firmly believes that he never violated federal law since his legal experts contend that the Federal Wire Act of 1961 does not pertain to bets that are made in a jurisdiction where those bets are legal. After being released from prison and satisfying his probation Cohen returned to Antigua. As a condition of his release Cohen was forbidden from participating in any way with any online gambling site. Cohen denied any involvement in WSEX until he finally confessed to MSNBC that he did in fact return to the sports gambling industry.
Business as Usual at WSEX
Whilst Cohen fought U.S. authorities WSEX continued their U.S. facing sports gambling business. Sports bets were still taken over the phone and through their website WSEX.com. U.S. players were still able to deposit and withdrawal through many convenient methods. The sports gambling industry was full of nothing but praise for WSEX.
Antigua vs the United States
Whilst Cohen sat in a Las Vegas prison Antigua took the U.S. to the World Trade Organization. Antigua alleged that the U.S. had violated international trade agreements by not allowing licensed Antiguan online gambling companies access to U.S. players. The claim was that since gambling is allowed in the U.S. that it is illegal for the U.S. to prevent outside countries from accepting U.S. playerâ€™s bets. On 24 March 2004 the WTO ruled that the U.S. had violated its trade agreement with Antigua. The U.S. appealed but in the end Antigua prevailed. This was great news for companies based offshore that were accepting bets from U.S. players. Unfortunately the U.S. still has not abided by the ruling and has yet to settle.
Rake Free Poker
In April 2006 the extremely small poker room tied to WSEX known as World Poker Exchange (WPEX) decided to turn their poker offering into a true loss leader. WPEX decided to pay players 100% rakeback. This had been tried before but every attempt had failed but WPEX was trying something different. This was the first time an established online poker room converted their full rake room into a no rake poker room.
Poker forums like Two Plus Two exploded with excitement. Rake is a poker playerâ€™s worst enemy as it eats away at a poker playerâ€™s bottom line. The WPEX software had a feature that kept track of the rake a player contributed to each pot. Every Monday players were paid 100% of the rake they contributed to each pot from the previous Monday-Sunday. The goal of WSEX was to bring in action to their sports book and casino through their poker room that was not making any money to begin with. As great as this promotion sounds there turned out to be quite a few problems.
WPEX was not used to the volume of players that came in to take advantage of the rake free poker. The dated poker software became a problem. Players experienced frequent crashes and slow computer performance when playing more than one table. Their security department also did not have the experience to handle issues such as team play and bots. Bots are computers that play poker in the place of humans. It was obvious to many players that there was a serious problem with bots and team play, also known as collusion.
WPEX security either refused to acknowledge this problem, were not experienced enough to discover it or the poor software was not capable of producing the type of reports needed to pinpoint possible cheating. In some circumstances players could sit down and play heads up against a player, play the dealerâ€™s button, sit out when they were the big blind, and then sit back in to play the button again. If a player is the button every time it gives them a huge advantage. Not only are they the small blind every hand instead of the big blind but after the flop the player would always be in last position giving a player a huge edge over the player always in the big blind who has to act first every time. No human would ever allow a player to do this type of angleshoot but the bots that seemed to call WSEX home did not know any better. The bot was simply a computer programmed to play poker, not understand when players were taking advantage of it.
World Poker Exchange did eventually give their poker software a major upgrade. The software was then more stable. Better tournament software and hand histories were also added.
Eventually WPEX decided that they could not continue to offer players rake free poker. In 2007 WSEX dropped the rakeback percent from 100% to 90%. Later in 2007 rakeback dropped to 75%. In 2008 the rakeback percent dropped 70%, then to 65% although players that signed up through an affiliate could still get 75%. Eventually rakeback was dropped altogether and WSEX became a full rake poker room once again. WSEX once hosted a peak of hundreds of players daily. Now WSEX peaks at 30-40 players every day.
WSEX and the UIGEA
On 13 October 2006 President Bush signed the Safe Port Act of 2006. This bill had an attachment called the UIGEA. The UIGEA made it illegal for banks to process payments related to illegal online gambling. As the Jay Cohen case showed online sports betting was illegal in the U.S. This gave WSEX processing issues as many processors were not willing to handle U.S. sports gambling payments.
In January 2007 the founders of Neteller were indicted. Neteller abruptly left the U.S. market. This left WSEX with few payment processors to service U.S. players. With fewer options WSEX was forced to pay higher processing costs, take higher risks of processor default and deal with processors that were not as experienced in combating fraudulent players. This is where the problems really began for WSEX.
After Neteller left the U.S. market WSEX found an electronic check processor to service U.S. players. U.S. player deposits could be taken directly from their checking account. Whilst this worked for a few months the processor failed. WSEX continued to accept echecks in the hopes that they could collect on them eventually. Many of those deposits were never collected. This hurt the bottom line of WSEX.
Slow Player Payments
In 2008 players started to experience slow payments from WSEX. WSEX claimed that the issues were related to a lack of payment processors. In March 2009 Sportsbook Review, a popular sportsbook rating site, made their first downgrade of WSEX from A+ to A-. In 2009 Sportsbook Review would downgrade WSEX five more times. WSEX closed the year as a C grade sportsbook.
As 2010 began some players were experiencing six month cashout delays. At the time it appeared that there was no reasoning behind who got paid when. As 2010 went on the amount of money owed to players skyrocketed from the lower five figures up to Â£145,000. As time went on WSEX was able to pay some players when the NFL season started but they continued to owe over Â£60,000 and closed the year graded a D by Sportsbook Review.
Matchbook and WSEX Part Ways
WSEX had part ownership of a betting exchange called Matchbook. Whilst WSEX struggled paying players Matchbook was able to pay their players in a timely manner. In January 2011 Matchbook management announced that they would be separating from WSEX. On 27 February 2011 Matchbook was sold. The new Matchbook owners immediately banned all U.S. players. There was hope that WSEX would be able to take cash from their share of Matchbook and pay players with it. At this point that has not happened. At last report WSEX players are owed Â£295,000. Newer players are reporting payments but some players have been owed money by WSEX since February 2010. The assumption there is that WSEX is trying to keep new players happy whilst they assume that the players waiting over a year for their cashout will probably never return anyway.
WSEX Antigua Gaming License
In 2010 WSEX allowed their gaming license in Antigua expire. Since they were in default to hundreds of players and owned some sports books that extended credit to gamblers, something forbidden by Antiguan law, they had violated the terms of their license. It was unlikely they would have gotten renewed anyway had they applied. WSEX.com now lists a London postal address and claims they are incorporated in Cyprus; a country well known for hosting less than reputable gambling sites. It has been speculated on forums that WSEX now operates underground in Antigua, which the phone number listed on their website does reflect.
There are hundreds of legitimate betting websites. There is no reason to deposit at a betting site that is operating unlicensed and owes over Â£295,000 to their winners. Do the industry, yourself, and your bankroll a favor… avoid and do not patronise companies like www.wsex.com.
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