Great post. I'm really liking the idea of a poker DAC. I think it's a natural fit.
How does PokerStars handle collusion?
1. They can see all hole cards to analyze hands. Being able to see hole cards is necessary to be able to combat collusion effectively in game types where collusion is more profitable/likely. I am suggesting the idea that all hole cards be publicized on a delay, similar to how live poker tournament streaming and TV shows do it. This is different to the current online poker offerings, but it is the only way I could think of that would be in a "trustless" manner.
1a. Otherwise if only delegates could view hole cards they could gain an unfair advantage while playing or relay that information to other players whom would gain an unfair advantage against players that didn't have that information. It will take some getting used to for poker players, as in most non-televised poker you can only see what your opponent had if it goes to showdown or they show you their cards. However, I think this is something that poker players could deal with if the rake is much cheaper than current online poker sites.. which I think it very well could be. It puts more of an emphasis on being game theory optimal, which is where most poker players think poker strategy is headed in the near future anyways. You will still get dealt 2 cards every hand with a random deal, and have chances to outplay the other players as people will still make poor/exploitable decisions.. people are not perfect.
2. They have full control over the "poker chips" and cash in/cash out gateways, so they can recompensate people whom were cheated and confiscate funds from people whom did the cheating.
2a. I think we could give Delegates control over the "poker chips" via Delegate controlled multi-signature addresses with which they can reverse payments and control the cash in/cash out gateways. For someone to play poker, they would need to deposit to a multi-signature address and then they will be given "credit" with which they can play in games.. similar to a poker site balance where you play with PokerStarsDollars or FullTiltDollars.. not actual dollars. When someone requests a cash out their play history should be checked to see if there is evidence of collusion or foul play, thus the gateways are controlled.
3. They use identity verification to prevent users from registering multiple accounts.
3a. BM stated the FollowMyVote DAC will have this ability, so we at least know it is possible. We could tie in the identity verification feature from this DAC or implement our own for a Poker DAC.
4. With the ability to see hole cards, reverse transactions, control the payment gateways, and stop multi-accounting, you then have all the tools needed to combat collusion.
4a. Algorithms should be made to detect every kind of collusion that is possible to highlight suspicious players, along with a mechanism for players to report other players for suspected foul play. People then need to analyze the hands and act as arbitrators, which is where I was suggesting delegates be used in a majority rules type manner. In the paper I posted above, I came up with another way this can be done but the dynamics would need to be fine tuned. You could create a "collusion dashboard/marketplace" where suspicious players/hands as pointed out by the algorithm and reported players/hands show up and allow the players to police themselves. You can give players incentive to police the games by offering a percentage of the rake for their participation in doing so, and come up with some sort of voting mechanism which would determine if colluding took place or not.
If you read the link of the paper I wrote up thread (which needs to be updated as I have some improvements in mind), you can get an idea of what the collusion algorithm will be looking for and how it can help in the detection of collusion. Poker sites don't release specific information on how they detect collusion and bots, but I am certain they have an algorithm similar to what I described in the paper to make it easier to do so (along with having a team that reviews hand histories and allowing players to report other players they suspect of colluding.)