The simplest cheat is still the best.
Log on with a dozen different accounts. Three or four of you versus one victim. Two or three versus two victims. Try to think of ANY card game that you could win when it's EVERYONE COOPERATING AGAINST YOU, and freely communicating in a way that you can't hear.
Channel all the bets to the strongest hand(s), and you'll almost ALWAYS win against your victim.
I don't cheat at games like these, I program them. This is the tiniest tip of the iceberg, but this is an example of the kind of cheating that there's no cure for.
The only way THESE people fouled up was keeping the accounts around too long. Just keep starting up new accounts. Even 'monthly' accounts can last one month. With 'Spades' there's no profit motivation for cheats. With Poker, a few sacrificial accounts is a business expense. Write it off on your taxes. 'Professional Poker Cheat' would look great on your 1040. The folks at H&R Block would flip. As long as you don't live in Nevada, there aren't likely to be any laws against it.
Now factor in using software to make the problem 'easier'. After all, decent poker AI is relatively straight-forward, especially if it's brute-force. Consider how much better it can be when it has access to most of the hands in the game. You could just peck in the contents of your hands, and rule out and calculate the odds of various hands in your opponent's hand. Practice all you like in consequence-free 'free' games, then move on to the money games when you're unbeatable. Modified or custom-written client software can make this dirt simple, but is in no way required to cheat at cards.
From very early in online gaming, people would sit and relay moves to 'chessmaster' type programs. It didn't make them 'proud'. It just made them feel good to make you lose. You thought you sat down to play a noob, but instead you're facing 'deep blue' with some little snot echoing your moves to it, and its moves back at you.
With card games, people would simply chat with you on the keyboard, and talk with your other opponent(s) on the cellular phone. They did this back in 1990, before most of you ever heard of the 'internet'. They're very good at it by now. Would two or three people cooperate to fleece you in a high stakes game? YES.
You don't need to make online gambling illegal. Just expose and advertise how irredeemably crooked it is, and MOST people will stop playing. The rest? Well, just STUPID, and if they weren't losing at poker online, they'd be wasting it some other way.
Think IP filtering can tell the difference? Think again. How many cellular network accounts could I plug into how many computers at one desk? Yeah, $300 a month would make for an expensive internet bill, so even cheaper, most people still don't know how to secure their wireless routers. In most middle-class neighborhoods, you can access several open routers at the same time. Use a handfull of $10 USB wireless adapters and virtual machine software, and you could literally be 'eight people' logged into eight networks on one machine with a couple of monitors. PEOPLE DO IT.
