Please Keep All "Gambling Bill" Related Questions & Comments Here!

[Superman]

http://www.breitbart.com/news/2006/1....nt5b8tr6.html

[Special K 22]

I've got a quick question for you. How do you foresee this whole internet gaming bill effecting this site? I heard that it may also crack down on other sites (ie blogs) that are sponsored by online gaming sites. I, and I'm sure many others, really enjoy this site and would hate to see anything happen to it. The language isn't clear cut, but one could interpret it to mean all sites on the internet that profit from internet gaming. Like I've said, I don't think this is the end of online gambling, only a change in the way things are going to have to be done. However, I would hate to see this site get lumped in with sites that cannot operate from US ISP's and get shutdown. Just wondering what your take on this possible scenerio? Hopefully it's considered a stretch to interpret the new legislation this way and this site will be able to continue to operate in full.

[Louie]

Special K,

My stance currently does not change. Altough, some poker rooms are leaving the US market, it does not really effect this site. The only sportsbook that is leaving the US market is Bet365 which doesn't really do much business in the US or from this site. So it's really not a big deal to them. But the poker rooms that are jumping ship I believe are just in panic mode. I am sure they are getting some legal advice to leave but I do not believe these laws will be enforced much more then they are being enforced right now. But time will only tell. I will not shut this site down no matter what happens. I promise you that. I will do whatever is in my power to make sure we are still kicking. There is nothing illegal about chatting and talking about sports. Freedom of speech can never be taken from us. I have quite a few Prepaid advertisors on here so I am not in panic mode about affiliate porgrams. I don't really like affiliate deals as I want my visitors to actually win (unlike 95% of sports betting sites).

Louie

[Louie]

Please post any questions, comments, etc, you make have about this bill here

[Louie]

Will Online Gambling be shut out?
From BetAsia.com

An analysis of the Unlawful Internet Gambling Enforcement Act of 2006 and what it means for gamblers around the world.

What does the Act aim to do?

The Act aims to stop anyone handling financial transactions related to online gambling, with a few minor exceptions.

Essentially, it aims to stop banks from allowing customers to send funds to offshore sites and to criminalize those who accept those funds for the purpose of gambling.

The Act is pretty ‘catch all’ in what counts as a financial transaction – it covers credit cards, electronic funds transfers, checks, drafts and ‘proceeds from any other financial transaction’.

It covers all ‘unlawful Internet gambling’ including poker. The Act defines ‘unlawful Internet gambling’ as “to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State in which the bet or wager is initiated, received, or otherwise made.” In other words, unless the gambling is state legislated then it is illegal.

When will it come into force?

Assuming that President Bush does not refuse to sign the Act – which is extremely unlikely – the law will change on his signature.

Financial institutions will then have 270 days to implement the regulations within the Act. Detailed regulations will be drawn up about what measures they must undertake to ensure they are not handling gambling transactions and if they comply with the regulations they will not be prosecuted, even if they inadvertently handle some gambling transactions by mistake. Essentially this means that all gambling transactions will have to be specifically coded as such and automatically blocked if they have that code.

There are likely to be several legal challenges to the Act which may take as long as a year to resolve. Most importantly, it appears this legislation is in direct contravention of the World Trade Organisation rulings against the United States in relation to online gambling. However the US government has hitherto ignored WTO rulings relating to gambling until now and is unlikely to change their stance in the near future.

Who proposed this Act and why?

The Act is based largely on a previous bill proposed by Congressman Jim Leach, (R-Iowa) in the House of Representatives and a similar bill proposed by Senator Jon Kyl (R-Arizona) in 2005. Certain aspects of it – in particular a clarification of the 1961 Wire Act which covers interstate betting by telephone – were dropped at the last minute because of lobbying by ‘real world’ gaming interests.

There are various theories as to why the law was passed now.

Democrats accuse Republicans of pushing the bill to placate its conservative base, particularly the religious right, before the November 7 congressional elections but certain Republicans have been trying to get anti-online gambling legislation passed for nearly a decade.

Others have suggested that the huge growth of online poker and the increasingly aggressive advertising tactics of the big poker sites made legislators eager to crack down on the industry, especially as it pays no tax revenues to the United States.

The arrest of David Carruthers, chief executive of sports betting site BetonSports, on racketeering charges also raised the stakes. The company’s founder, Gary Kaplan, was allegedly linked to criminal gangs in the United States and opponents of online gambling argued that many websites were being used as a front for money laundering and other criminal behaviour. Given that so many of the companies were floated on the London Stock Exchange and audited by the major accountancy firms, this seems a little fanciful but looked plausible to conservative opponents of gambling.

Who does it affect?

The wording of the legislation is aimed at anyone ‘in the business of betting’. This was intended to catch those who operate online gambling sites but it could cover a wider scope than that.

While those drafting the legislation did not intend to criminalize any individual placing a bet or playing poker online the loose wording could, in theory, catch someone who made their living as a professional gambler or poker player. It is unlikely that this would be applied to individuals but it is not impossible that this legislation could be used to prosecute an individual.

The wording suggests that anyone running a site promoting online gambling – whether it is a sports gambling information site, sports betting forum, watchdog site, rakeback or affiliate site – could be considered to be ‘in the business of betting’. This is likely to affect thousands of small gambling websites. The legislation allows for the government to ask sites to remove links to gambling sites and also to ask Internet Service Providers to take the companies offline. Realistically, if the online gambling sites cease to operate then so will these information sites as there will be no affiliate revenue to keep them going.

It is also suggests that ‘skill gaming’ sites will be illegal – under the definition of the Act it definitely appears that playing chess for money online will now be in breach of the law.

Who does it not affect?

The chief winners from the Act are operators of fantasy sport sites. Despite the fact that their activities are very similar to gambling in many ways, there is a specific exemption for fantasy sites. However they may not have their scoring systems based on a team’s performance, team score on the point spread on that game. This means fantasy sports must be based on the statistical performance of a group of players. The fantasy sport operators may also not offer prizes related to the number of entrants into the fantasy pool.

How fantasy sports have managed to get this exemption is something of a mystery and no doubt some online gambling operators will be looking to see if their sites can be changed into fantasy sites.

State lotteries also do well from this legislation. They are now specifically allowed to start online operations and to club together to provide multi-state jackpots on their sites. It also allows them to run 'casino style' games of chance on their websites, akin to the Fixed Odds Betting Terminals in UK betting shops.

What are the penalties for breaking this law?

The Act allows those breaking the law to be imprisoned for up to five years.

What does this mean for the future of online gambling?

At the moment it means that a huge number of investors are a lot poorer and a lot of lawyers are getting paid a ton of money to work out what is and what is not covered by this legislation.

In the long term it may lead to the legalisation and taxation of online gambling in the United States. As America has found in the past with Prohibition, it is extremely unlikely that the passing of this legislation will stop sports gambling by their citizens. ‘Locals’, as bookies who operate out of bars and cigar shops across America are known, are throughout the states and can expect to see a boom in their business in the coming months. Laws that merely shift a problem rather than eliminate it are historically neither popular or long lasting.

There may also be a large number of recreational poker players who will be extremely displeased by having their online poker pastime eliminated by legislators. Whether these players will have any political clout is questionable but there will be many relatively educated and wealthy people who wonder why their government feels it necessary to remove access to something that for the vast majority of people has no negative effects. This is especially true when so many real world poker rooms (and casinos, horseracing tracks, lotteries etc) exist across America, suggesting that a different standard is being applied to online gambling versus all other forms of gambling.

The main problem is how or why this Act could be over-turned. This is little political incentive for any politician to try and promote online gambling. The number of people who would specifically vote for an individual because they promoted a bill that allowed them to bet online is minimal. Yet the downside of proposing it is huge – the backlash from the conservative heartland and right wing bloggers would be enormous – and potentially not just damaging to the individual but also to their party. Perhaps the best hope for anyone who wants to see online gambling legalized for the US market is that the federal government will realize the scale of illegal betting within their territorial boundaries and think that taxation and regulation is better than the activity being run and controlled by Mob enterprises.

I don't live in America. Does this affect me?

Perhaps.

Anyone who has a pension fund that invests in the London stock market has probably already lost money following the passing of the Act. Shares plunged on the news of the act passing and as most pension funds which track the FTSE 100 index had shares in Party Gaming then their pension funds will be poorer because of it.

As a gambler it might just affect you. Profits from American bettors have been the main driver of the online betting industry in the last decade. Without those profits companies will change their behaviour. Also, investors will be less willing to put their money into these companies, meaning that there is less competition in the long run.

For sports bettors this may mean that margins creep up from the present highly competitive level. In theory it could mean that the non-American markets will become more competitive as everyone seeks to find new customers in these territories but initial reaction in the industry suggests the Act will hurt the global gaming industry in every territory.

If you play poker you will almost certainly find there is far less 'value' in the games you play online. Fewer players will probably make the games more competitive and tougher to beat. Companies will be making lower profits and will be less willing to give money back to players in the form of rakeback and bonuses.

[Louie]

ESPN.com's thoughts

http://sports.espn.go.com/espn/news/...t&lid=tab6pos3

[Special K 22]

Thanks for the quick reply Louie. Glad to hear everything should be ok with this site. It was reading stuff like this that you posted from an article that got me a little worried:

"The wording suggests that anyone running a site promoting online gambling – whether it is a sports gambling information site, sports betting forum, watchdog site, rakeback or affiliate site – could be considered to be ‘in the business of betting’. This is likely to affect thousands of small gambling websites. The legislation allows for the government to ask sites to remove links to gambling sites and also to ask Internet Service Providers to take the companies offline. Realistically, if the online gambling sites cease to operate then so will these information sites as there will be no affiliate revenue to keep them going. "

Thankfully we always have freedom of speech to fall back on, like you said.

[phenom22]

All this talk about the proposed ban on internet gambling is disturbing to say the least. What disturbs me most is how they sneak this into a totally unrelated bill. I came across this on another site and I thought you's be interested. It's a Nevada representative's response to this crap.

http://youtube.com/watch?v=nb1pzayqPaI

[Superman]

Legal Landscape of Online Gaming Has Not Changed
Analysis From CardPlayer's Legal Counsel
ALLYN JAFFREY SHULMAN
allyn@cardplayer.com

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.

The New Bill Does Not Make Online Poker Illegal

The new bill attempts to make it more difficult to get money into a site by forbidding US financial Institutions from funding the type of online gambling which the law has previously made illegal. The new bill does NOT make online gaming illegal where it was not illegal before. Let me say that again. The new bill does not make online gaming illegal. The bill merely speaks to the mechanism by which an online account is funded. I am going to spend some time in this article explaining the accuracy of my reasoning.

The Bill Constitutes Enforcement Legislation

First and most simplistically, the bill is called the Unlawful Internet Gambling Enforcement Act. The operative word is enforcement. It is a bill whose goal is to enforce laws that already exist.

The bill begins in section 5361 by discussing congressional findings. In that section the bill states that Internet gambling is funded by credit cards etc. Section 5361(a)(4) states in relevant part:

“New mechanisms for enforcing gambling laws on the Internet are necessary because traditional … mechanisms are often inadequate…”

The Bill does not Change Existing Gaming Law

Next, section 5361(b) specifically states that nothing in this new law shall be construed as “altering, limiting or expanding any Federal or State law… prohibiting, permitting or regulating gambling within the US.” In other words, the language of the statute confirms that this new law does not change existing gaming law. It does not SPEAK TO the legality of online gaming. It only applies to the mechanism of funding any Internet gaming which has already been deemed to be illegal.

Even Senator Frist said about the bill "Although we can't monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws."

The Definition of Unlawful Internet Gambling

Of extreme importance in a statute is the definitional section which sets forth the parameters of a bill. The term “Unlawful Internet gambling” is given a definition. Section 5362(6) defines unlawful Internet gambling to mean placing or receiving a bet “where such bet or wager is unlawful under any applicable Federal or State law.” This raises the question regarding what type of online gambling is already illegal. That will be discussed below.

First, let’s move on to the meat of the bill. This is the section that states just what is prohibited. Section 5363 begins by saying that “No person engaged in the business of betting or wagering may knowingly accept…” electronic transfers, credit cards etc. where a person is engaged in “unlawful Internet gambling.” This new law applies, if and only if, the gambling is already illegal under current law.

This brings us directly to the issue of what has been deemed illegal in the last 10 years since the first online casino opened its virtual doors. In a nutshell, sports-betting is made illegal by the 1961 Wire Act, but poker is not.

Remember please, that the Attorney General’s Office has not brought one lawsuit in 10 years against a poker site, even though it takes the position that online poker is prohibited by the Wire Act.

How the Law Works

In order to explain this discrepancy, I must digress with some rudimentary background about just how the law works. You probably remember from your high school civics class that the legislature MAKES laws which the judiciary CONSTRUES. That means that our representatives in Congress draft the laws which judges then interpret.

Legislators are not wordsmiths which is why there is a whole body of law called statutory construction. The first rule of statutory construction says that if the words of the statute are clear, the court may rely upon the common language. But if the language is NOT clear, the court must construe the language using a complicated legal process.

If a law is unclear, a Depuy Attorney General (the prosecutor) will take one position and often a defense attorney will take an opposing position. They go to court and a judge makes a determination. So when the Attorney General makes a public statement about what a law means, he might or might not be correct. It is ultimately the decision of a court.

When the Attorney General’s office takes the position that the Wire Act prohibits online poker, the court ultimately decided whether that opinion is accurate. Senator Frist incorrectly believes that all online gaming is illegal. He said: "For me as majority leader, the bottom line is simple: Internet gambling is illegal."

However, in order for Internet poker to be illegal, there must be a specific statute that forbids such activity. For years I have posed the question: What statute prohibits online poker? And if it is illegal, why has there not been one lawsuit filed by the government against an owner of an online poker site?

Online Poker is not Illegal

Even though the Attorney General’s Office has publicly taken the position that the 1961 Wire Act forbids online poker, in 10 years, they have not put their money where their mouth is. Why? The judiciary (i.e. the interpreting body) has already held that the 1961 Wire Act doesn’t speak to poker. It only applies to sports-betting.

The case on point to which I refer is "In Re Mastercard International", decided by District Court Judge Stanwood R. Duvall, Jr. in 2001. Among other issues, Judge Duval was faced with the question of whether the Wire Act applied to online gambling. The posture of the case was interesting because many deadbeat gamblers attempted to avoid online gambling debts they had incurred by alleging that the money they owed their credit card companies amounted to illegal gambling debts in violation of the Wire Act. As a matter of fact, there were so many similar suits filed by so many gamblers who did not want to pay their losses, that the lower court consolidated 33 such similar charges.

Judge Duvall ruled that the Wire Act only prohibited wagering on SPORTS EVENTS and he dismissed all 33 cases, noting that "Comparing the face of the Wire Act and the history surrounding its enactment with the recently proposed legislation, it becomes more certain that the Wire Act's prohibition of gambling activities is restricted to the types of events enumerated in the statute, sporting events or contests." In other words, online poker was NOT within the reach of the Wire Act’s prohibition. The District Court of Appeal agreed with Duvall’s ruling that the 1961 Wire Act does not apply to online poker.

I must mention one caveat. District courts are permitted to disagree with one another until the Supreme Court steps in. However, in this case Judge Duvall’s reasoning is so sound, it is close to irrefutable. There is a well established body of law regarding statutory construction and Judge Duvall followed the procedure to a tee.

Even Representative Goodlatte, who authored one of the online gaming bills in the House, acknowledges the limitations of the Wire Act. "We need to modernize the Wire Act, which is 45 years old, and does not apply to all forms of gambling," says Goodlatte, adding, "It clearly applies to sports betting."

Hysteria is Completely Unfounded

Since this new law does not change what is legal or illegal, the current hysteria is completely unfounded. This legislation attempts to make it more difficult to get money into a site. Besides a few wrinkles which will be the topic of another article, that’s about it.

The statute is primarily no big deal since poker players stopped using credit cards a few years ago and found other ways to get their money into their favorite gaming site.

I am not saying there won’t be lawsuits construing the meaning of the statute, but ultimately, the statute will only be deemed to affect the method by which online sites are funded.

Correct Analysis

There are a few very insightful people out there correctly analyzing this new legislation. For example, the president of the American Gaming Association, Frank Fahrenkopf is one such person. "This bill did not make anything legal or illegal," says Fahrenkopf. "What it did was affect the mechanism by which Internet gambling takes place…and there is some question as to whether or not that will be effective."

Bloomberg correctly reports that “Congress passed legislation that curbs financial payments from banks to offshore Internet casinos that are illegal under U.S. law.”

Consumer Affairs seems to have gotten it right as they report that: “The legislation does not criminalize the placing of bets by consumers. Rather than outlawing online gambling, the bill prohibits banks and credit card companies from making payments to online gaming websites… However, it's unclear just what is covered by the bill. Internet sports-betting is plainly outlawed but what about online poker and other popular games?”

I urge our readers to use care in accepting the opinions that one site gets from another site where no legal opinion is being presented. Please, read the statute yourselves. Read the words carefully and think about my analysis. The statute can be found by clicking here. The Unlawful Internet Gambling Enforcement section starts on page 213.

Jurisdiction

Another area I have written about extensively is the area of jurisdiction. Libraries of books have been written on the varied and complex meaning of jurisdiction. One of the simplest meanings of “jurisdiction” is legal power.

For example, a New York court doesn’t generally have jurisdiction (legal power) over a problem in Texas. A federal court doesn’t have jurisdiction over a violation of most state laws. A municipal judge doesn’t have jurisdiction over a felony trial.

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 set of rules.

This bill prohibits a gaming company from accepting payment that violates US gaming law. Besides the fact that no law makes online poker illegal,

all the gaming sites are offshore and not subject to US laws.

A law that tries to control an offshore company is considered a law with no teeth, because it cannot be enforced. In the US, when a law is broken, a person is arrested. The government subpoenas records and a case moves forward. What it means not to have jurisdiction is that US laws do not apply offshore, nor can the US arrest a person in another country nor does our government have subpoena power to command an offshore company to turn over records. NEteller, an online money transfer service, is also an offshore company, not subject to US laws.

The Future

First of all, nothing is going to happen for 270 days. The Secretary and the Board of Governors of the Federal Reserve System have 270 days (after the bill is signed by the president) to come up with enforcement policies and procedures. Those procedures are directed to the behavior of banks and credit card companies. The procedures will be a nightmare.

Representatives of the financial services industry worry about a heavy regulatory burden being placed on banks. "The bill sets up banks to police a social issue," said Laura Fisher, spokeswoman for the American Bankers Association. "It's not something we want to encourage."

The bill passed by Congress could allow regulators to exempt checks and money transfers because they are more difficult to track. “Analyzing 40 billion checks a year would be a largely manual process”, Fisher said.

If checks are not exempt, this would break our banks as it would be too costly to enforce. If checks ARE exempt, players could simply send a check to an online site. If checks are not within the purview of the law, what about e-checks?

The rules won’t even be figured out for nine months during which time, all the clever sites will have legally circumvented this new law by other legal procedures to fund the sites.

Some Online Sites are Overreacting

I am surprised to see some online sites overreacting and posturing as if they will pull out of the market. Any company that just pulls out of the market deserves to lose a lot of money because they are receiving bad legal advice.

Offshore companies are not bound by US anti-gaming laws. But the most persuasive reason why offshore companies shouldn’t pull out is because the laws of online gaming have not changed. A few years ago when the government was beginning to subpoena news networks, offshore sites didn’t pull out because the movement by the government couldn’t affect them. Similarly, a law that directs itself to the mechanism used to enforce current laws, does not change the legal landscape.

[Louie]

Originally posted by phenom22
What disturbs me most is how they sneak this into a totally unrelated bill.

This is actually common in congress. It's how they sneak bills in. It's disgusting.

[Louie]

Also,

I would like to commend this board as well. I've been digging and digging for information (as much as I can) about this bill. That digging included looking through other boards. A lot of other boards turned the topic of this bill into a political argument. I've read some disgusting posts that have nothing to do with the bill or online betting. Some boards even stopped discussion about the bill due to the arguing. As always, this board discussed the issue with class.

[Superman]

NeTeller for US Online Poker Players
Latest Official Statement Gives Temporary Relief to US Online Poker Players
On Friday 29 September 2006, the US Congress passed legislation which includes certain provisions to prohibit unlawful internet gambling through the restriction of payments to such sites.

The Bill states that there will be a period of up to 9 months for the US regulators to prescribe regulations requiring each designated payment system and all participants therein to identify and block or otherwise prevent or prohibit restricted transactions.

On October 1, 2006, NeTeller released an official statment on the matter.

'It is currently unclear how NETELLER, a European company, with no assets, presence or employees in the US, would be affected by this bill. Once the regulations have been written, NETELLER will have a clearer view of which companies are affected, how those companies will be expected to comply, and any possible resulting impact on NETELLER and its US facing business.NETELLER continues to operate its business as normal.

Over 3 million customers in 160 countries trust NETELLER to transfer over $7 billion each year. NETELLER (UK) Limited is authorised and regulated in the United Kingdom by the Financial Services Authority and listed on the AIM market of the London Stock Exchange. To protect its customers’ money, all deposited, in-transit, and un-cleared funds are held in Trust Accounts."

[Louie]

Please!

[Studplayr]

Recieved the following correspondence from Firepay today.
Apparently the BS is statring:
SUBJECT: New FirePay policy for US account holders

On September 30, 2006, the United States Congress passed the Unlawful Internet Gambling Enforcement Act of 2006.

Once President Bush approves the Act. FirePay (www.firepay.com) will no longer allow US consumer payments for online gambling merchants.

Beginning the day President Bush signs the Act, FirePay will decline any purchase transactions from US FirePay account holders at any gambling merchant site.
Ten days after President Bush signs the Act, FirePay will decline any transfer attempt made by any online gambling merchant to a US FirePay account.
All US FirePay accounts holders will continue to be able to make purchases and receive payments from non-gambling, online merchants, as well as “Deposit From” and “Withdraw To” their US bank account.

Click here for the latest news and opportunities for FirePay account holders.

** Please note:

This new policy will not affect FirePay account holders from outside of the United States


For any questions regarding these deadlines or policy, please email info@firepay.com

Sincerely,
FirePay
info@firepay.com

[Studplayr]

I,m considering opening a checking account in a Canadian bank just to transfer funds in and out of to sites I use for gaming. Any thoughts on the legality of this and whether it would work. Do any of our canadian posters know if canadian banking regulations permit accounts by non citizens?

STUD

[Smoes]

got a reply back from dick Santorum,


Thank you for contacting me regarding the Internet Gambling Prohibition and Enforcement Act. I appreciate hearing from you and having the benefit of your views.

On November 18, 2005 Representative James Leach of Indiana introduced H.R. 4411, The Unlawful Internet Gambling Enforcement Act of 2005. This bill addresses the issue of funding unlawful Internet gambling though credit cards, electronic fund transfers, and other forms of financial transactions.

As you may know, the provisions of H.R. 4411 were included in H.R. 5122, the National Defense Authorization Act for Fiscal Year 2007. On September 29, 2006, the House of Representatives passed H.R. 5122 by a vote of 398-23. On September 30, 2006, the Senate also passed this legislation unanimously. H.R. 5122 currently awaits the President's signature to become law.

Thank you again for contacting me. If I can be of further assistance with this or any other matter, please feel free to call on me again.
Sincerely,

Rick Santorum
United States Senate

[Louie]

Smoes,

I received the same email.