How is this not a loophole?

[Austiger]

This may be shot down quickly, but I'm trying to read through this piece of [censored] and come up with a plan.

From p. 221:

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10) Unlawful internet gambling
A) In General- The term 'unlawful internet gambling' means 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 a bet or wager is unlawful under any applicable Federal or State law in the state or Tribal lands in which the bet or wager is initiated, received or otherwise made.

***

Doesn't this mean that if a bet would be legal in a B&M casino, then it would be legal using the internet, unless there is a state law like in Nevada prohibiting online gambling? Or do all states that allow casinos have laws prohibiting online gambling?

At the very least, I think this means that US citizens would not be in violation of the law if they played online poker outside the country.

[BluffTHIS!]

Check other threads on states being able to allow in-state online gambling!

[Poker_Hoar]

Opening foreign bank accounts is harder than you think if you are American.

I set-up an account in Spain and they asked abunch of BS questions and made me fill out a W9.

Uncle Sam is tightening the noose everywhere.

[BluffTHIS!]

You still have to pay taxes. As long as you do that it is possible though with some places you have to physically go there to start an account, and with others like some banks in Canada apparently, you can indeed start one over the phone/net after you mail them documentation. So the foreing bank thing is a way to play, not play and evade US taxes.

[New001]

Yeah, anyone who tries to hide money in Canada or somewhere else is stupid. I think I'll probably look into getting something set up in the next week or so if only to make me feel better.

[Mr.K]

The Department of Justice has argued that transmission of wagers over the Internet violates the Wire Act, and that any online bet is therefore an illegal bet. Now, in certain well-defined situations where the bet originates and terminates in the same state, I think the DoJ would back off -- the Nevada Gaming Commission seems to be exploring this electronic type of betting right now -- but for your average run of the mill hand on Party Poker, DoJ is going to argue that the bets made violate federal law, and thus trigger the provision you quoted.

But there is a more general message here all of you need to bear in mind: The people who wrote this bill aren't stupid, and they had a LOT of advice on how to write it. They've probably thought about almost any scenario you can cook up, and in most cases, have covered those scenarios in the bill language. People coming in here and proclaiming nonsense like "conference reports have no legal weight" or "there is a loophole!" or "the U.S. can't enforce its laws on overseas banks!" are missing the point entirely, and in many instances they're also wrong on the merits of their claims.

The best way I can put it is that if the law has an impact of 10 units, the voluntary actions taken by banks and online sites in reaction to it may actually have an impact of 15 or 20 units. There is a great deal of uncertainty about how this is going to play out, and while some parties will aggressively fight enforcement of the bill, the ones with tons of money tied up and lots at risk (legally and financially) will likely respond cautiously. That caution may, in turn, lead to a harsher environment for poker players than even the bill requires. Sites may start turning away US players even though they don't have to. Banks may decide to go above and beyond the requirements of the law for the sake of ease and legal certainty.

You are all going to have to just wait it out for a few days while the dust settles. Patience has never sold very well here in the Legislation forum, but it is the one thing all of you need most right now.

[StrayBullet]

[ QUOTE ]
You still have to pay taxes..... So the foreing bank thing is a way to play, not play and evade US taxes.

[/ QUOTE ]

Then how is this a "loophole?" If you have to pay taxes on that foreign account, wouldn't that trigger the IRS, then in turn, trigger an investigation on where the funds came from?

[BluffTHIS!]

You can actually get a federal gaming license as a gambler even if you are gambling illegally. The IRS isn't "supposed to" use that to tip DoJ off to your sources of same, if my understanding is correct.

[Jack Bando]

[ QUOTE ]
[ QUOTE ]
You still have to pay taxes..... So the foreing bank thing is a way to play, not play and evade US taxes.

[/ QUOTE ]

Then how is this a "loophole?" If you have to pay taxes on that foreign account, wouldn't that trigger the IRS, then in turn, trigger an investigation on where the funds came from?

[/ QUOTE ]

IRS can't tipoff any other legal authorities about how you get your money/what you do, IIRC it's the Silver Spoon law. Otherwise, they'd get you for paying taxes from illegal money, or you don't pay taxes on it and they get you for that.

[Self Made]

Austiger: good point. That's what I was wondering about when I read the bill. Only running a sportsbetting operation violates Federal law, and only a handful of states have made online poker illegal.

But I understand Mr. K's point as well. Unfortunately, the rule of law doesn't apply 100% in the US. E.g. the Feds try to apply the wire act to everything, but people have to fight it for the courts to rule that it only applies to running a sportsbetting operation, which they have. There will need to be legal fights over this, the Feds will try to apply it broadly, and risk averse companies (like your bank) will probably err on the side of being careful.

[Jack Bando]

[ QUOTE ]

The best way I can put it is that if the law has an impact of 10 units, the voluntary actions taken by banks and online sites in reaction to it may actually have an impact of 15 or 20 units. There is a great deal of uncertainty about how this is going to play out, and while some parties will aggressively fight enforcement of the bill, the ones with tons of money tied up and lots at risk (legally and financially) will likely respond cautiously.

You are all going to have to just wait it out for a few days while the dust settles. Patience has never sold very well here in the Legislation forum, but it is the one thing all of you need most right now.

[/ QUOTE ]

Using your units metaphor, if the gov wants 10 units, will the banks talk to them and say "10 can't be done, it'd cost $x a year! How about 5 units, we can do 5."?

Is there something you see happening in the next few days when the dust settles, or is that all that you think happens, just dust settling? Keep up the good work.