Applying Logic to the Enforcement of the Funding Ban

[HSB]

Lets think about this from a practical day to day business perspective.

A bank will receive a request from some entity to transfer funds to some recipient with authorization from the account holder.

In order to block this as a gaming transaction the bank needs to know that it is a gaming transaction.

The bank will not be able to determine that the transaction is a gaming transaction from any information related to the account holder because even degenerate gamblers by groceries. Booze mostly, but it's still groceries.

Therefore the regulations the Fed and DOJ come up with will have to be based on the entity requesting the transaction and or the recipient of the funds. Most of the time I figure these are the same anyway.

How can you block gaming transactions by recipient?

1) Provide a list of prohibited recipients.
2) Require that banks apply a certain criteria to each transaction to determine if the transaction should be blocked.
3) Provide no list or logic but leave it to the discretion of the bank with a penalty for failing to comply appropriately.
4) Some combination of the above.

Is there anything else that they can do? I can't think of anything but that doesn't mean it doesn't exist.

Now look at it from a bank's perspective. From their perspective they are going to prefer a simple list because that is the easiest to implement. If a transaction comes through for a certain recipient you block it.

This is also the easiest to get around. Poker sites are blocked, use Neteller. Neteller gets blocked, use Firepay. Firepay gets blocked, used e-gold, et-cetera and so forth. The funding method may have to change periodically if the prohibited list gets updated but any fish that can figure out how to use Neteller or Firepay can figure out another funding method just as easily.

Any logic that they publish is going to be public knowledge and sites will be able to use a payment method that avoids the blocks. The banks would try to avoid this option because it's a pain in the balls to implement.

If the regulations leave it up to the banks completely the banks will come up with a list of obviously gaming related recipients to block and probably leave it at that. Perhaps they will include Neteller or Firepay but they won't be including any recipients that receive relatively large percentages of non gaming transactions.

[JOHNY CA$H]

The more i think about it, the more i think you're right.

[Copernicus]

Ultimately it depends on how stiff the penalties are vs the cost of compliance. Eg if the fine is something ridiculous like 1 million per transaction they will gladly block a transaction with any entity that has any affiliation with a gambling site, even if its a miniscule part of their business. Hell..if it were that big they might block any overseas transaction by an individual that isnt accompanied by a notarized affadavit that it isnt a gaming transaction.

Because of the very broad definition of a financial institution I think the only approach that can succeed is somehow challenging the jurisdiction of the US government to regulate the transactions.

[1p0kerboy]

Excellent post. And quite in depth.

The only way for banks to prohibit transactions which MIGHT be associated with gambling is to play the cat and mouse game. And that would get real old, real quick for them.

[Unabridged]

forget about firepay or neteller, if you go on party right now you can click a button and use your credit card to buy a "phone card" and fund your account with it. they could create a new phone card site every day if they had to.

[Copernicus]

[ QUOTE ]
forget about firepay or neteller, if you go on party right now you can click a button and use your credit card to buy a "phone card" and fund your account with it. they could create a new phone card site every day if they had to.

[/ QUOTE ]

While more difficult to enforce than against banks, the "participants in a network or designated payment system" would include not only the retailer of the phone card, but the telecom company that sold it to them if they had knowledge that the retailer would use it for gaming transactions.

they have had years to refine the language in this thing and it casts a very wide net.

[bcubed72]

There are a few things one can do with neteller other than fund gambling. The example given here was to buy poker literature. Someone needs to try to buy a non-gambling-related good via neteller, get turned down, then sue to be able to use neteller for such purchases. Who knows how the courts would rule in such a situation?

[kleath]

Here's the biggest problem with bank enforcement, banks are not liable for blocked transactions, ie if they have any thoughts it may be gambling related the government says "be on the safe side" It could be banks act as they SHOULD and only really block direct gambling transactions, but its not at all inconceivable that they could shut down anything that may remotely be gambling related, and if they do the latter I dont think we have much recourse.

[Hendricks433]

In an article on Cardplayer it says the Bankers of America said its going to be hard for them to follow this bill. I think people are over reacting and need to wait and see what happens before freaking out.

[sublime]

lets say they block neteller.

cant neteller just set up new 'mini banks/netellers' whenever they want?

the EU wouldnt even have to see the change/difference.

i dont know dick about the banking industry, but i cant see how when millions of dollars are at stake something that appears so easy to bypass wouldnt be.

the people 'breaking' the law would be in other countries. just like when i placed a football bet on thursday. some say neteller wouldnt want to break a US law. ok, someone else will. not everybody cares if they can visit the USA.

i dunno, this just seems like a hard law to enforce.