US - Online Gambling Prohibition

[The Don]

An online gambling prohibition has been tagged onto an unrelated bill. It's big news here in the UK because many of the online casinos are nominally based here.

I'm concerned that this will enable organised crime to occupy this part of the market now rather than businesses which are regulated.

I also think it interesting that US politicians think that prohibition may actually work in a situation where there is widespread demand for the services in questions.

http://news.bbc.co.uk/1/hi/business/5397920.stm

[Lothian]

An online gambling prohibition has been tagged onto an unrelated bill. It's big news here in the UK because many of the online casinos are nominally based here.

I'm concerned that this will enable organised crime to occupy this part of the market now rather than businesses which are regulated.

I also think it interesting that US politicians think that prohibition may actually work in a situation where there is widespread demand for the services in questions.

http://news.bbc.co.uk/1/hi/business/5397920.stmI bet that this will not stop on-line gambling in America.

The article says “The law would make it illegal for banks and credit card firms to process online gaming payments from the US”

It appears therefore that it is not illegal to transfer funds to a bank in the UK say “The Septic Tank Gambling Bank”

That bank would not come under US Jurisdiction.

[bob_kark]

Stop? No. Limit? Yes. You really have to want to gamble to set up an account with a foreign bank and wire money on a regular basis to fund the account. If you have plenty of cash it might not be such a limitation. However for those with thinner wallets, it may become too cost prohibitive.

[Lothian]

Stop? No. Limit? Yes. You really have to want to gamble to set up an account with a foreign bank and wire money on a regular basis to fund the account. If you have plenty of cash it might not be such a limitation. However for those with thinner wallets, it may become too cost prohibitive.There is no reason the on line gaming cos. could not set up their own bank. Make the accounts US dollar accounts and there need not be any cost to the customer.

Even if it cost more would that restrict the total amount people spend on gamling or would it just change the services it is spent on ?

[Mid]

How would this act relate to something like paypal or something similar? (I honestly have no idea hence why I'm asking)

[Cleon]

How would this act relate to something like paypal or something similar? (I honestly have no idea hence why I'm asking)

Paypal already prohibits using its services for gambling, as well as porn.

[Mid]

Paypal already prohibits using its services for gambling, as well as porn.

Well I thought something similar could be set up by the gaming sites to get around this, would the law prohibit this?

[The Don]

PlayPal ?

Must go off and Trademark that

[HeavyAaron]

Well I thought something similar could be set up by the gaming sites to get around this, would the law prohibit this?

They are called Neteller and Firepay.

Aaron

[Charlie Monoxide]

My main concern is that I hope this doesn't affect my Vice Fund investments ....

Charlie (legalize gambling and pot while you're at it) Monoxide

[Mid]

They are called Neteller and Firepay.

Aaron

Ta

[shemp]

Several gaming sites are panicking and closing U.S. operations. Others are standing pat. Here's an analysis of the bill at CardPlayer.com: http://www.cardplayer.com/poker_news/news_story/1428?class=PokerNews

I'm going to pull out some of my money, but not all. I have a little over $1,000 at FullTilt.

[andyandy]

Several gaming sites are panicking and closing U.S. operations. Others are standing pat. Here's an analysis of the bill at CardPlayer.com: http://www.cardplayer.com/poker_news/news_story/1428?class=PokerNews

I'm going to pull out some of my money, but not all. I have a little over $1,000 at FullTilt.

Netteller's shares are going to rocket :D

[shemp]

Netteller's shares are going to rocket :D

http://www.cardplayer.com/poker_news/news_story/1431?class=PokerNews

Neteller, the third-party banking company that allows people to transfer money online, saw its shares fall from 345 pence to 140 pence. The bill is designed to target financial institutions that work with online gambling companies, something Neteller does.

Maybe tomorrow.

[andyandy]

http://www.cardplayer.com/poker_news/news_story/1431?class=PokerNews



Maybe tomorrow.

lol! 60% fall......Just as well i don't play the stock market :D

i thought netteller would be able to circumvent the laws....maybe not....

[The Don]

A UK company is calling it protectionism on the grounds that Nigel Payne told the BBC that the US move was simply "overt protectionism" against foreign firms in the sector. (http://news.bbc.co.uk/1/hi/business/5401452.stm)

Is this true ? Is it now legal for US based companies to offer gambling over the 'net ?

[HeavyAaron]

A UK company is calling it protectionism on the grounds that Nigel Payne told the BBC that the US move was simply "overt protectionism" against foreign firms in the sector. (http://news.bbc.co.uk/1/hi/business/5401452.stm)

Is this true ? Is it now legal for US based companies to offer gambling over the 'net ?

Not exactly. But we do have a domestic industry for gambling... horse racing, dog racing, lottery... And I'm pretty sure that bets for some of them can be made over the telephone.

Aaron

[Donal]

What if I had one of my cousins in Ireland set up a neteller account in their name then I put money into it?

[Charlie Monoxide]

Not exactly. But we do have a domestic industry for gambling... horse racing, dog racing, lottery... And I'm pretty sure that bets for some of them can be made over the telephone.

AaronI'm sure the domestic casino industry in the US is behind this move as well. When I lived in Nevada, I found it interesting that for about the 15th (guessing at the number, probably too low) year in a row a state lottery in Nevada was voted down due to casino interests. The proceeds from a Nevada state lottery would have been used for schools and such. Still, casinos consider any dollar NOT gambled at their establishments should indeed be banned or made illegal.

Charlie (still pining to return to Nevada) Monoxide

[Cleon]

As an online poker player, this pisses me off royally.

However, upon further reflection:

A) This probably won't be enforced. In fact, the bill just calls for regulations for enforcement to be drawn up; it doesn't specify how it will be enforced.
B) I'm sure the major players (heh) have already researched ways around this law. Neteller probably already has a plan in place, but holding their cards close to their chest (har!) until the regulations are specified.

For right now, I encourage people to join or donate to groups like the Poker Players Alliance (http://www.pokerplayersalliance.org), even if you're not players yourselves. I don't think it's a stretch to say that if Congress decides that you shouldn't be able to use funds to gamble online, it's only a matter of time before they start restricting what other things you're allowed to pay for online.

[HeavyAaron]

As an online poker player, this pisses me off royally.

However, upon further reflection:

A) This probably won't be enforced. In fact, the bill just calls for regulations for enforcement to be drawn up; it doesn't specify how it will be enforced.
B) I'm sure the major players (heh) have already researched ways around this law. Neteller probably already has a plan in place, but holding their cards close to their chest (har!) until the regulations are specified.

For right now, I encourage people to join or donate to groups like the Poker Players Alliance (http://www.pokerplayersalliance.org), even if you're not players yourselves. I don't think it's a stretch to say that if Congress decides that you shouldn't be able to use funds to gamble online, it's only a matter of time before they start restricting what other things you're allowed to pay for online.

I'm an on-line poker player myself. It's a nice supplimental income. And it was easy to get my wife to go along with the plan after winning a us free cruise this year. So, this is important to me.

I'm not afraid of being unable to access poker sites. I'm afraid the fish won't be able to, or perhaps not choose to.

Aaron

[Suddenly]

Whatever happens, PartyPoker being out of the U.S. market is worth any other trouble. That is a horrible site only tolerated because the massive advertising budget attracts new players that don't know any better... which attracts players that do know better but will sacrifice to go where the action is...

Maybe not if PokerStars goes as well though. That would be tragic.

Come to think of it, if all the refugee traffic from Party goes to Stars and the legislation turns out to be completely unenforcable... I'm sending Frist, etc. a fruitcake this X-mas... Like a dream come true...

[shemp]

I'm sending Frist, etc. a fruitcake this X-mas...

Isn't that redundant?

FullTilt is still up and running. And still shafting me on the river. Business as usual.

[HeavyAaron]

Whatever happens, PartyPoker being out of the U.S. market is worth any other trouble. That is a horrible site only tolerated because the massive advertising budget attracts new players that don't know any better... which attracts players that do know better but will sacrifice to go where the action is...

Maybe not if PokerStars goes as well though. That would be tragic.

Come to think of it, if all the refugee traffic from Party goes to Stars and the legislation turns out to be completely unenforcable... I'm sending Frist, etc. a fruitcake this X-mas... Like a dream come true...


But Party has all of the tasty fish... *sob*

Aaron

[senorpogo]

Whatever happens, PartyPoker being out of the U.S. market is worth any other trouble. That is a horrible site only tolerated because the massive advertising budget attracts new players that don't know any better...

Complete agreement here.
Some of the worst customer service you may ever encounter.

[HeavyAaron]

For those interested parties (no pun intended) here's a list of the official positions of all of the major on-line pokerrooms:

http://forumserver.twoplustwo.com/showthreaded.php?Cat=0&Number=7509074&an=0&page=0#Post7509074

Aaron

[Beerina]

The proceeds from a Nevada state lottery would have been used for schools and such

Don't do it! I come from a state that does this, and here are some facts on it:

1. The amount will be touted as very large, like $600 million or so, but this only amounts to something like 4% of the school budget. So it's not that much.

2. It takes a few years, but the legislature slowly reduces payments the state makes directly, so after a few years, it's a wash for the schools -- no net new cash. Usually this will happen via inflation rather than an actual, numeric reduction, since voters pay attention to that. But it doesn't take long for a 2% inflation rate to eat up a 4% bonus from the lottery.

3. The people think "hey, the lottery gives money to the schools! Let's vote down this school money increase!" not realizing that 4% thing, thinking the lottery provides like half the school budgets.

So all in all, politicians win, gambling wins (whoever gets the state contracts), and government wins via fraud (here's your 50% of the take, o' lucky lottery winner. Now give me back 37% of it for taxes.)

[Suddenly]

But Party has all of the tasty fish... *sob*

Aaron

That is the point. If they all go to the other site they used to see on TV, they are still fish. We need Paradise to get out as well. That or develop a decent hand history function.

Hopefully thay will all start playing HORSE instead of holdem, but I may be pushing it too far.

If Stars moves from the US market though... I guess ultimate bet. The truely wild thing would be if somehow PlanetPoker managed to wind up with a
majority of the market... Nicely circular...


(But then if there were anyone but 2+2 weenies playing on WPEX.... that wouldn't be a bad place)

[HeavyAaron]

That is the point. If they all go to the other site they used to see on TV, they are still fish. We need Paradise to get out as well. That or develop a decent hand history function.

Hopefully thay will all start playing HORSE instead of holdem, but I may be pushing it too far.

If Stars moves from the US market though... I guess ultimate bet. The truely wild thing would be if somehow PlanetPoker managed to wind up with a
majority of the market... Nicely circular...


(But then if there were anyone but 2+2 weenies playing on WPEX.... that wouldn't be a bad place)

I'd love to move to WPEX... hey! Who you calling "weenie?" ;)

I hope you're right and the fish will migrate. I'm not so sure.

Aaron

[BobK]

Here (http://sports.espn.go.com/espn/news/story?id=2611872&lpos=spotlight&lid=tab6pos3)is a link on the ramafications.
Joseph Kelly, a law professor at Buffalo (NY) State College and an attorney for online gaming concerns, calls the law "highly unenforceable." The act makes it illegal for banks to transfer money from customer accounts to online gambling firms. But for the most part, bettors don't pay their online bookies directly. Payments usually are routed to offshore firms through an online intermediary such as Canadian-based Neteller, the biggest money-transfer firm in this sphere. In addition, American banking lobbyists insisted that the most basic form of payment be exempted if the industry was to support the law. That's the good old-fashioned check -- both paper and electronic versions -- whose volume made them impossible to monitor. So checks are exempted.

Might be a good time to buy Neteller.

[WaterD]

I've read that the reason behind this bill is to protect the true family values...:S
Now really, anybody knows the real reasons of why the us government did this move?

[CP489]

That's the good old-fashioned check -- both paper and electronic versions -- whose volume made them impossible to monitor. So checks are exempted.

:D That's how I transfer money to Bodog! :D

/feels much better

Also, to the person above who said that stateside casinos were fbehind this bill, not true. Originally they were for it, then they realized that they could simply set up their own sites (the money would live in the Bahamas) and their brand recognition (Harrah's, WinStar, etc.) would get people to play on their sites.

[Suddenly]

I hope you're right and the fish will migrate. I'm not so sure.

Aaron


There are those that will go over hill and dale to lose money at poker on the internet. Some find the game simply entertaining, and others more or less like to punish themselves, scream about the unfairness of it all...

Past that, there are those who win now, but will soon find out that they are not so good in a less than booming market.

The first games to suffer are no-limit holdem ring games. The money moves from bad to good players very quickly there. What happens then is that the remaining bad players start to bust out, and then the % of good players increases, and the bad players lose even faster. Basically a death spiral. (This is why pre-TV/internet big bet games were rare. There needed to be a total flood of new money to get past critical mass, spread the good players out enough where bad ones at least had a short term chance...)

The last place to really tighten up will be tournaments. The rake is lower and this is where a lot of losing no-limit HE players will go as tournaments set a nice stop-loss and depending on blind structure can reward what would be losing play in a ring game.

Limit poker is a question mark. If it is still as overrun by supertight nits as it is now, there may be more of a migration to omaha and stud, where there is usually at least the illusion of loose action, and are games that can't be played by rote as well as limit holdem.

[Suddenly]

I've read that the reason behind this bill is to protect the true family values...:S
Now really, anybody knows the real reasons of why the us government did this move?

The above, mainly playing to the rubes.

The more substantial reason, reflected in some of the conversation on the house floor (Barney Frank's comments, which I lack a link to at present, were excellent in opposition) is that is sucks a few billion dollars out of the country per year and does not contribute to the GDP.

The latter is played down sometimes because it hurts any WTO case...

[BobK]

Legal counsel for Card Player mag. has an posted an article about the bill.
Article (http://cardplayer.com/poker_news/news_story/1446?class=PokerNews)
Misleading news stories abound both online and in print regarding the passage of the Unlawful Internet Gambling Enforcement Act. The completely incorrect interpretation states that the new bill essentially outlaws most forms of Internet gambling. The new bill absolutely does no such thing.

I have been analyzing legal issues for 25 years. I have gone to court thousands of times interpreting statutes and I have taught new lawyers the correct method by which a statute should be analyzed. For over 15 years I was part of a legal hotline where California attorneys would call me with a legal question. As this is my field of expertise, I am flabbergasted at the misinformation being perpetuated regarding the new bill.

Seems it will simply be a little harder to deposit funds. The cure for that is to keep winning so you don't have to deposit any more.;)

[Suddenly]

Someone better be depositing money at some point though...


"House Counsel," eh? She is part of the family that owns Cardplayer and thus has a direct interest. Those that represent their own interests have fools for lawyers.. She does have a history of this sort of thing though.

A 2002 thread from RPG (http://groups.google.com/group/rec.gambling.poker/browse_frm/thread/9414d30fda80295d/59a107dc9b4bf760?lnk=gst&q=suddenly+lawyer&rnum=2#59a107dc9b4bf760) where this author (before marrying into the Shulman family) makes posts wherein she claims to be an above average attorney and declares that the wire act does not make what was then called UB-2 illegal. UB-2 was a sort of a pyramid scheme similar to what we know as "affilliate" programs where one gets a piece of the rake of every player they refer, and every player those people refer, etc.

The problem is she gives this advice while trying to get people to sign up with her referral code.

The meat of my RGP post:

Check out this paragraph from the author's post to RGP:


"We would be thrilled if you use Nut Low as your referral person. What do
you get by being on our team? Mark and I are putting together promotional
material which you can use to get your own referrals; Mark is an Omaha
expert and willing to give you tips; I am an attorney with an agreement from
Greg Pierson to respond to the problems I observe and I will personally make
sure all concerns are properly addressed; we are both very nice people AND
you only gain by using us as your referral. I will be happy to answer any
personal emails if you have questions or concerns."


or even better:


"I should add, that besides being an attorney, I am involved in different
businesses and the idea of being involved in a business that can potentially
be a money maker with no capital investment is almost unheard of and
extremely valuable to people who want to make money but have no investment
capital."


She doesn't mention any of this involvement in the article, that she is
"involved" in a business that stands to possibly gain financially by people
believing her advice and possibly joining UB2. Even more alarming, the
following paragraph:


"By the way, since there are about 100,000 online players, and in 4 days,
100
new players joined UB-2, there's plenty of room for you to refer your
friends and make money on this site, although I totally agree that the
sooner one gets involved, the more money one can make. Some people are
sitting around criticizing the site and others of us are sitting around in
our jammies making money."


The "criticism" she is referring to is Steve Badger's concerns regarding
possible criminal liability for being in UB2. The author responds to this by
telling people that (remember, she is an attorney) such caution in
expensive. She later states:


"After conferring with some legal gaming experts, I intend to make another
post regarding the silly ostensibly "legal" surmisings by people with no
legal training or expertise."


Thus indicating she has not yet explored the issue fully when she advise
people to ignore Badger and get involved now so that they can be, along with
the author, "sitting around in our jammies making money." Given these
statements, and assuming they were made by the same person (I have no
verification of this), can anyone with a straight face say that the author
is really qualified to give an objective legal opinion on the topic of
on-line poker, and that if so, the author should not disclose her
"involvement" with UB2?






(The whole legality of these UB-2 programs has never been determined, but I still think it is a bit risky w/r/t some state laws even if not federal laws)

So she has in the past been willing clearly willing to use her "lawyer" status to try to get people to enter business arrangements with her to her benefit, which is some serious thin ice as far as ethics go...

The point is that she is as far from objective as one can get. Her opinions should be taken with much sodium. Guess what places most of CardPlayer's revenue comes from?

Three guesses. First two don't count.

More specifically she mixes "unenforceable" with "legal" and seems totally stupid about other things. To wit:

Our government doesn’t have jurisdiction to make rules for a company that resides offshore. Our rules do not apply in other countries, as they have their own sets of rules.

Simply wrong. We can make rules for any company that transacts business in the United States. I can't go offshore to the Republic of Absurdia and start shipping crack into the U.S. and claim it's legal because crack is legal in Absurdia. I'm breaking U.S. law. If Absurdia has an extradition treaty I could be sent to the U.S. to face trial, or if I set foot in the U.S. I would be subject to arrest.

As to what bets are at present illegal, pretty much every state has it illegal to accept a bet when the accepting party has some house edge or takes a portion of the pot. Sometimes the person making the bet is acting legally, just not the house. Some states allow this with a license.

The case she cites involves using RICO to declare debts to credit cards illegal. The requirement would be that "A RICO claim alleging a violation of § 1962(c), as here, also requires that the defendant “participate[d] in the operation or management of the enterprise itself.

...

Because the Defendants completed their transaction with the Plaintiffs before any gambling occurred, that transaction cannot have involved taking custody of something bet or collecting the proceeds of a gambling device. "

This is fixed by the new law. Also this case didn't analyze several statutes because they only identified misdemeanors under state law and thus insufficent for RICO. The new law also changes this.

Relying on this case w/r/t the new statute is a bit daft.