Supreme Court Decision Marquette Vs. First Omaha Service

[Voting Citizen]

OK, I have been sitting here for over a week now waiting for the lawyer types to bring this up.

A careful reading of the bill shows it only applys to “illegal” online gambling, with illegal being defined as the activity must be illegal as defined by federal law or state law. It has been established that poker is not illegal at the federal level. If you believe otherwise, please post the law that applies.

So in a nutshell, the state laws determines if playing poker online is legal or illegal and thus decides if this new law applies. Banks that reside in a state where playing poker online is legal, should be able to service the account of customers without issue as the bill does not apply.

Yes, but what if a customer resides on a state different then the bank?

This is were the Supreme Court decision Marquette Vs. First Omaha Service is import. In 1978 the Spreme Court ruled a bank is subjected to the laws of the state in which the bank resides and NOT the state in which the customer resides. Have you ever noticed your credit cards are usually from South Dakota or Delaware? This is because of the Marquette decision. After the 1978 decision, banks simply moved their credit card operations to a state where the laws were in the bank's favor. In fact South Dakota made a special effort to attract the banks by changing the laws to favor the banks (thus we have credit cards with 20+% interest). Citibank immediately moved their operations to South Dakota in response. Delaware saw the success of the South Dakota legislation and changed their laws as well to attract banks, and now most credit cards are from either South Dakota or Delaware. For more information, there was a PBS Frontline show about the history of credit cards (FRONTLINE LINK (http://www.pbs.org/wgbh/pages/frontline/shows/credit/more/rise.html)).

Marquette was upheld and made even stronger with the <font color="red">unanimous</font> 1996 Supreme Court Decision Smiley vs Citibank.

Here is a summary of the decision:

The Supreme Court's unanimous June 3, 1996, ruling that banks can continue to charge late fees to credit card customers who live in states that ban or limit such fees. The court determined that credit cards fees can be considered interest charges and therefore are controlled by laws in the state where the bank is located.

As an interesting side note, North Dakota is the only state which runs their own bank ....

Opinions on my analysis?

Voting Citizen Paul

[uninformedposter]

If your assessment is correct, and poker is in fact exempt from this new law, then a whole lot of execs at Party, Pacific, Firepay, etc, are going to scream "Doh!" all at once pretty soon.

Interesting loophole, no doubt some operations will try to exploit it. No clue how successful they will be.

[cking]

Anyone know what north carolina is like? I think that is where Bank of America is still run out of...

[Vern]

[ QUOTE ]
Anyone know what north carolina is like? I think that is where Bank of America is still run out of...

[/ QUOTE ]
NC is illegal to gamble Link (http://www.gambling-law-us.com/State-Law-Summary/) Social gambling is a crime in NC.

[Voting Citizen]

I am not sure if the Marquette ruling applies to overseas banks. My gut feeling is the ruling does not specify so it is a gray area ... but I have not researched that aspect of the ruling. But Marquette would be a strong argument in favor of overseas banks not being regulated by any individual state.

But you are missing the point. Most people with resonable credit can open a bank account in any state in under 10 minutes with usually a fax machine.

[cking]

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Anyone know what north carolina is like? I think that is where Bank of America is still run out of...

[/ QUOTE ]
NC is illegal to gamble Link (http://www.gambling-law-us.com/State-Law-Summary/) Social gambling is a crime in NC.

[/ QUOTE ]

thanks... and I'm gonna assume that SC is the same thing, so maybe it's best i just look into a citibank account should this all hold up...

Oh wow, it is legal in south carolina... and here i was thinking this state is so backwards, looks like i'm gonna get me a nice student account here

[permafrost]

Welcome to the forum Paul.

[ QUOTE ]
So in a nutshell, the state laws determines if playing poker online is legal or illegal and thus decides if this new law applies.

[/ QUOTE ]

The state legality and applicability of the new bill where legal, has been a subject in multiple threads

The banking ideas are scarcer and your thoughts may be fine.

Now, are you saying you know a State that has lawful online poker or just making a hypothetical assumption?

[StellarWind]

[ QUOTE ]
So in a nutshell, the state laws determines if playing poker online is legal or illegal and thus decides if this new law applies. Banks that reside in a state where playing poker online is legal, should be able to service the account of customers without issue as the bill does not apply.

[/ QUOTE ]
The new law is a federal law even though it makes reference to state laws. Accepting deposits for internet poker played in (e.g.) Washington state becomes a federal felony anywhere in the world. The locations of the source and destination of the transaction are immaterial.

Implementing regulations will be written by the federal government to try and prevent these illegal transactions. Any bank regardless of location that adheres to U.S. banking regulations will follow the new regulations.

Notice that my last sentence is carefully worded so that it must be true. We just aren't sure what it means.

[permafrost]

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Anyone know what north carolina is like? I think that is where Bank of America is still run out of...

[/ QUOTE ]
NC is illegal to gamble Link (http://www.gambling-law-us.com/State-Law-Summary/) Social gambling is a crime in NC.

[/ QUOTE ]

More importantly, simple gambling is a misdemeanor.

[maurile]

[ QUOTE ]
So in a nutshell, the state laws determines if playing poker online is legal or illegal and thus decides if this new law applies. Banks that reside in a state where playing poker online is legal, should be able to service the account of customers without issue as the bill does not apply.

[/ QUOTE ]
It's not where the bank resides that matters. It's where the customer resides.

[ QUOTE ]
Yes, but what if a customer resides on a state different then the bank?

This is were the Supreme Court decision Marquette Vs. First Omaha Service is import. In 1978 the Spreme Court ruled a bank is subjected to the laws of the state in which the bank resides and NOT the state in which the customer resides.

[/ QUOTE ]
The bank is subject to federal law. Federal law will soon prohibit banks from making transfers to entites engaged in the business of unlawful Internet gambling. Whether any particular Internet gambling is unlawful is determined by the law of state where the customer resides (and, in more limited circumstances, by the federal Wire Act).

So even if a bank is located in a state where poker is legal, it cannot make transfers to PokerStars on behalf of customers who reside in states where poker is illegal. Doing so would violate federal law.

[SLP]

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Anyone know what north carolina is like? I think that is where Bank of America is still run out of...

[/ QUOTE ]
NC is illegal to gamble Link (http://www.gambling-law-us.com/State-Law-Summary/) Social gambling is a crime in NC.

[/ QUOTE ]

thanks... and I'm gonna assume that SC is the same thing, so maybe it's best i just look into a citibank account should this all hold up...

Oh wow, it is legal in south carolina... and here i was thinking this state is so backwards, looks like i'm gonna get me a nice student account here

[/ QUOTE ]

It's illegal (http://scstatehouse.net/code/t16c019.htm) and I believe there are a couple of cases pending where people were busted for participating in hold 'em tournaments.

Personally, I think the law violates substantive due process since it makes illegal any game with cards or dice, regardless of whether you're gambling on the outcome.

[Vern]

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Anyone know what north carolina is like? I think that is where Bank of America is still run out of...

[/ QUOTE ]
NC is illegal to gamble Link (http://www.gambling-law-us.com/State-Law-Summary/) Social gambling is a crime in NC.

[/ QUOTE ]

More importantly, simple gambling is a misdemeanor.

[/ QUOTE ]
But players are social gamblers. Take NY for example. It is not a crime to be a player, even in an illegally operated game. But in NC, playing poker with your neighbors where there is no rake or "house" is still a misdemeanor. I do not recall ever seeing social gambling enforced in NC but that does not change its criminal status and hence it clearly qualifies under the new law.

[maurile]

[ QUOTE ]
If your assessment is correct, and poker is in fact exempt from this new law, then a whole lot of execs at Party, Pacific, Firepay, etc, are going to scream "Doh!" all at once pretty soon.

[/ QUOTE ]
The OP is not saying that poker is exempt from the UIGEA. He's saying that it's exempt from the Wire Act, and thus the UIGEA is applicable to poker only to the extent that poker is prohibited by state law. About this he is likely correct (although the Supreme Court has not ruled on whether the Wire Act includes poker).

The OP's further contention, however, is that the word "unlawful" in the UIGEA will be interpreted to mean unlawful in the bank's state rather than in the customer's state. About this he is incorrect.

[BillJames]

[ QUOTE ]
So in a nutshell, the state laws determines if playing poker online is legal or illegal and thus decides if this new law applies.

[/ QUOTE ]

While your reading of Marquette is correct, your above quoted statement is not -- and because of this, your thoughts on the banking aspect will not follow.

As discussed elsewhere, the bill quite plainly defines "bet or wager" as betting on a "game subject to chance". While not entirely clear in the text that this applies to poker, this is something that should be dealt with in the regulations. If poker does come under this definition, then it won't matter if an individual state legalizes internet poker. This bill will still apply to that state; the state cannot get around the bill simply by legalizing poker.

[Voting Citizen]

[ QUOTE ]
The bank is subject to federal law. Federal law will soon prohibit banks from making transfers to entites engaged in the business of unlawful Internet gambling. Whether any particular Internet gambling is unlawful is determined by the law of state where the customer resides (and, in more limited circumstances, by the federal Wire Act.)


[/ QUOTE ]

Can you point to a reference that shows the bank is subjected to the law of the state where the customer resides. The Supreme Court has upheld twice that banks are subjected to the laws of the state that the BANK resides.

[BillJames]

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...and thus the UIGEA is applicable to poker only to the extent that poker is prohibited by state law. About this he is likely correct.

[/ QUOTE ]

I don't see where you are getting this from. The bill applies regardless of individual states' laws on internet poker.

[maurile]

[ QUOTE ]
As discussed elsewhere, the bill quite plainly defines "bet or wager" as betting on a "game subject to chance". While not entirely clear in the text that this applies to poker, this is something that should be dealt with in the regulations. If poker does come under this definition, then it won't matter if an individual state legalizes internet poker. This bill will still apply to that state; the state cannot get around the bill simply by legalizing poker.

[/ QUOTE ]
This is not correct. Poker is included in "bet or wager" but that does not mean that it is included in "unlawful Internet gambling." It's the latter phrase that matters, and poker is included only to the extent that it is unlawful under state law (unless courts start construing the federal Wire Act to prohibit online poker).

[Vern]

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The bank is subject to federal law. Federal law will soon prohibit banks from making transfers to entites engaged in the business of unlawful Internet gambling. Whether any particular Internet gambling is unlawful is determined by the law of state where the customer resides (and, in more limited circumstances, by the federal Wire Act.)


[/ QUOTE ]

Can you point to a reference that shows the bank is subjected to the law of the state where the customer resides. The Supreme Court has upheld twice that banks are subjected to the laws of the state that the BANK resides.

[/ QUOTE ]
For state laws that is correct, but the federal law clearly references the state of the player as the "unlawful" location and not the state of the bank. This is not one state trying to regulate banks from another state, this is a federal law saying transactions initiated by someone that lives in a state are illegal if they are for unlawful gambling activity. The bank is not the one placing the bets, so their location is irrelevant to the discussion of "unlawful" as a result of jurisdiction.

[maurile]

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The bank is subject to federal law. Federal law will soon prohibit banks from making transfers to entites engaged in the business of unlawful Internet gambling. Whether any particular Internet gambling is unlawful is determined by the law of state where the customer resides (and, in more limited circumstances, by the federal Wire Act.)


[/ QUOTE ]

Can you point to a reference that shows the bank is subjected to the law of the state where the customer resides. The Supreme Court has upheld twice that banks are subjected to the laws of the state that the BANK resides.

[/ QUOTE ]
I didn't say that banks are subject to the laws of the state where the customer resides.

Banks are subject to (a) the laws of the state where the bank resides, and (b) federal law.

It's (b) that comes into play here. Specifically, banks are subject to (the regulations to be promulgated under) the UIGEA.

[maurile]

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...and thus the UIGEA is applicable to poker only to the extent that poker is prohibited by state law. About this he is likely correct.

[/ QUOTE ]

I don't see where you are getting this from. The bill applies regardless of individual states' laws on internet poker.

[/ QUOTE ]
The bill prohibits money transfers to persons engaged in the business of unlawful Internet gambling. Poker is not unlawful under federal law. So the bill prohibits money transfers only on behalf of customers who reside in states where poker is unlawful under state law.

[Voting Citizen]

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So in a nutshell, the state laws determines if playing poker online is legal or illegal and thus decides if this new law applies.

[/ QUOTE ]

While your reading of Marquette is correct, your above quoted statement is not -- and because of this, your thoughts on the banking aspect will not follow.

As discussed elsewhere, the bill quite plainly defines "bet or wager" as betting on a "game subject to chance". While not entirely clear in the text that this applies to poker, this is something that should be dealt with in the regulations. If poker does come under this definition, then it won't matter if an individual state legalizes internet poker. This bill will still apply to that state; the state cannot get around the bill simply by legalizing poker.

[/ QUOTE ]

Thanks for the reply.

The section defining a bet or wager is to clarify which illegal activity the bill applies. So for example, the bill does not apply to the illegal activity of speeding because speeding does not involve a bet or wager.

If the activity is not illegal, then the section defining a bet or wager is irrelevant.

[StellarWind]

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It's not where the bank resides that matters. It's where the customer resides.

[/ QUOTE ]
Actually this is not true. It's where the customer gambles.

A little nuance to further complicate everyone's attempts to comply with and enforce the new law.

[maurile]

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It's not where the bank resides that matters. It's where the customer resides.

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Actually this is not true. It's where the customer gambles.

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Correct.

[SpeakEasy]

Your analysis of the banking cases and the state law to be followed by banks is irrelevant.

Section 5363 of the Act provides "No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling --" credit, EFTs, checks, etc.

The specific crime under the Act is knowingly accepting [money] "in connection with" the participation of another person in unlawful Internet gambling. The law to be followed by a particular bank that may be involved as an intermediary between the player and the poker site is not an element of the crime.

For example, you might write a check and make a deposit in a poker site. The funds are transferred from your bank to the poker site. (Or it might be an electronic transfer from your bank to neteller to the poker site-- different vehicle, same result.) If the poker site knowingly accepts those funds, and poker is illegal in the state where you place a bet (click your mouse), then the poker site has committed the new crime. The law that is followed by your bank, and the line of cases you site, is irrelevant.

[blueodum]

OP is basically correct, but no state has a law that explicity allows online gambling or poker. In those states where there is no clear law, gambling activities are generally prohibited unless explicity exempt (and licensed).

[MiltonFriedman]

"This bill will still apply to that state; the state cannot get around the bill simply by legalizing poker"

Unless you somehow have read Section 5362(10) out of the Act, a State-legal poker game is exempted from the definition of "Unlawful Internet Gambling".

The 'game subject to chance" stuff goes into the definition of "bet or wager". You missed the point, a State CAN legalize a "bet or wager", taking even a State approved "game subject to chance" out of the definition of "illegal Internet gambling"

There is more, but that analysis will suffice.

[MiltonFriedman]

Sorry, I did not stop to read your earlier post. Mush more succinctly stated than mine.

[MiltonFriedman]

... and unless the State law says Internet, and also applies to poker, the customer is gambling at the game server, which is offshore.

(A state law can, and some do, say regardless of where anyone else is, a bet or wager placed from within the State takes place within the state. To further muddle the waters, how would that apply to a poker game offshore, where there is no "bet or wager" unless some other player acts on it ... and the site has nothing to do with that action nor books the risk.

[MiltonFriedman]

This looks very correct to me.

However, whether there is unlawful Internet gambling is determined by State law, with respect to poker.

Further, whether a poker business is even covered is suspect, as it has no stake in the games and does not itself make bets or wagers.

[MiltonFriedman]

The locations of the source and destination of the transaction are immaterial.....

State law analysis:

Is poker covered ?

Are players specifically forbidden to do something ? (Watch for laws tied to " establishments" or other physical locations within a State.)

Is Internet poker specifically covered ?

Does UIGE Act apply to poker sites ?

[permafrost]

[ QUOTE ]
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Anyone know what north carolina is like? I think that is where Bank of America is still run out of...

[/ QUOTE ]
NC is illegal to gamble Link (http://www.gambling-law-us.com/State-Law-Summary/) Social gambling is a crime in NC.

[/ QUOTE ]

More importantly, simple gambling is a misdemeanor.

[/ QUOTE ]
But players are social gamblers. Take NY for example. It is not a crime to be a player, even in an illegally operated game. But in NC, playing poker with your neighbors where there is no rake or "house" is still a misdemeanor. I do not recall ever seeing social gambling enforced in NC but that does not change its criminal status and hence it clearly qualifies under the new law.

[/ QUOTE ]

The column labeled "simple gambling" in your link is more relevant to people in most States, which is what I was badly communicating. Yes, in NC social gambling is illegal.

BTW, several people have said what you did about New York players and I wonder how one comes to that conclusion?

[MiltonFriedman]

Section 5362(10)

[MiltonFriedman]

"Anyone know what north carolina is like?"

nice place to visit, great food, good auto racing.

[MiltonFriedman]

"Take NY for example. It is not a crime to be a player, , even in an illegally operated game"

So, NY is okay ?

Does NC say anything about the Internet ?

[Vern]

[ QUOTE ]
BTW, several people have said what you did about New York players and I wonder how one comes to that conclusion?

[/ QUOTE ]
[ QUOTE ]
New York Penal Law Sec 225.00 Gambling offenses; definitions of terms.

3. "Player" means a person who engages in any form of gambling solely as a contestant or bettor, without receiving or becoming entitled to receive any profit therefrom other than personal gambling winnings, and without otherwise rendering any material assistance to the establishment, conduct or operation of the particular gambling activity.

A person who gambles at a social game of chance on equal terms with the other participants therein does not otherwise render material assistance to the establishment, conduct or operation thereof by performing, without fee or remuneration, acts directed toward the arrangement or facilitation of the game, such as inviting persons to play, permitting the use of premises therefor and supplying cards or other equipment used therein. A person who engages in "bookmaking", as defined in this section is not a "player."

4. "Advance gambling activity" A person "advances gambling activity" when, acting other than as a player, he engages in conduct which materially aids any form of gambling activity. Such conduct includes but is not limited to conduct directed toward the creation or establishment of the particular game, contest, scheme, device or activity involved, toward the acquisition or maintenance of premises, paraphernalia, equipment or apparatus therefor, toward the solicitation or inducement of persons to participate therein, toward the actual conduct of the playing phases thereof, toward the arrangement of any of its financial or recording phases, or toward any other phase of its operation. One advances gambling activity when, having substantial proprietary or other authoritative control over premises being used with his knowledge for purposes of gambling activity, he permits such to occur or continue or makes no effort to prevent its occurrence or continuation.

5. "Profit from gambling activity." A person "profits from gambling activity" when, other than as a player, he accepts or receives money or other property pursuant to an agreement or understanding with any person whereby he participates or is to participate in the proceeds of gambling activity.

9. "Bookmaking" means advancing gambling activity by unlawfully accepting bets from members of the public as a business, rather than in a casual or personal fashion, upon the outcomes of future contingent events.

12. "Unlawful" means not specifically authorized by law.

Sec. 225.05 Promoting gambling in the second degree.

A person is guilty of promoting gambling in the second degree when he knowingly advances or profits from unlawful gambling activity.

Promoting gambling in the second degree is a class A misdemeanor.



[/ QUOTE ]

I bolded the player definition, you will not, to commit a crime in NY, you have to do something other than be a player. Note, that does not mean that if you have money on the table you get to keep it. That can still be seized as proceeds of an unlawful gambling activity, but it still does not make the player be in violation of any criminal statute.

[MiltonFriedman]

"A person who gambles at a social game of chance on equal terms with the other participants therein "

" ...without otherwise rendering any material assistance to the establishment, conduct or operation of the particular gambling activity."


Guess rakeback or propping is out then for NY players ?

[*TT*]

[ QUOTE ]
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Anyone know what north carolina is like? I think that is where Bank of America is still run out of...

[/ QUOTE ]
NC is illegal to gamble Link (http://www.gambling-law-us.com/State-Law-Summary/) Social gambling is a crime in NC.

[/ QUOTE ]

More importantly, simple gambling is a misdemeanor.

[/ QUOTE ]
But players are social gamblers. Take NY for example. It is not a crime to be a player, even in an illegally operated game.

[/ QUOTE ]

Actually the NY statute deems profiting from gambling illegal. To date this has been used only to prosecute or disrupt the owners and workers of a gambling establishment, but the actual wording is much stricter than the current enforcement.

TT /images/graemlins/club.gif

[Vern]

[ QUOTE ]
"A person who gambles at a social game of chance on equal terms with the other participants therein "

" ...without otherwise rendering any material assistance to the establishment, conduct or operation of the particular gambling activity."


Guess rakeback or propping is out then for NY players ?

[/ QUOTE ]
I don't know. As long as the refund is less than the rake you pay, it can be construed as a reduction in the cost to play and not profiting from the game. Games where you rakeback more than you ever pay in rake might be different, but I still don't think the government has the resources to chase after players, regardless of rakeback.

[Wake up CALL]

[ QUOTE ]
[ QUOTE ]
"A person who gambles at a social game of chance on equal terms with the other participants therein "

" ...without otherwise rendering any material assistance to the establishment, conduct or operation of the particular gambling activity."


Guess rakeback or propping is out then for NY players ?

[/ QUOTE ]
I don't know. As long as the refund is less than the rake you pay, it can be construed as a reduction in the cost to play and not profiting from the game. Games where you rakeback more than you ever pay in rake might be different, but I still don't think the government has the resources to chase after players, regardless of rakeback.

[/ QUOTE ]

That is an odd interpretation Vern. What brings you to the conclusion that a certain amount would make an illegal act any more or less illegal (other than Grand Theft and similar statutes)?

[Vern]

[ QUOTE ]
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[ QUOTE ]
Anyone know what north carolina is like? I think that is where Bank of America is still run out of...

[/ QUOTE ]
NC is illegal to gamble Link (http://www.gambling-law-us.com/State-Law-Summary/) Social gambling is a crime in NC.

[/ QUOTE ]

More importantly, simple gambling is a misdemeanor.

[/ QUOTE ]
But players are social gamblers. Take NY for example. It is not a crime to be a player, even in an illegally operated game.

[/ QUOTE ]

Actually the NY statute deems profiting from gambling illegal. To date this has been used only to prosecute or disrupt the owners and workers of a gambling establishment, but the actual wording is much stricter than the current enforcement.

TT /images/graemlins/club.gif

[/ QUOTE ]
TT,

Straight from the statute, you must either be advancing or profiting from.

[ QUOTE ]
5. "Profit from gambling activity." A person "profits from gambling activity" when, other than as a player, he accepts or receives money or other property pursuant to an agreement or understanding with any person whereby he participates or is to participate in the proceeds of gambling activity.

[/ QUOTE ]
However, that could be stretched to apply to props and rakeback players I would think, I just don't think it ever will.

[Vern]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
"A person who gambles at a social game of chance on equal terms with the other participants therein "

" ...without otherwise rendering any material assistance to the establishment, conduct or operation of the particular gambling activity."


Guess rakeback or propping is out then for NY players ?

[/ QUOTE ]
I don't know. As long as the refund is less than the rake you pay, it can be construed as a reduction in the cost to play and not profiting from the game. Games where you rakeback more than you ever pay in rake might be different, but I still don't think the government has the resources to chase after players, regardless of rakeback.

[/ QUOTE ]

That is an odd interpretation Vern. What brings you to the conclusion that a certain amount would meke an illegal act any more or less illegal (other than Grand Theft and similar statutes)?

[/ QUOTE ]
Basically to "profit from gambling activity" you have to make a profit from someone else's play. As long as the rakeback is less than the rake you have played, it can be construed as merely a cost reduction incentive to play. The person offering the incentive is promoting, but the player is not profiting from. Once the player starts to make more from the kickback and he paid in rake, then he can be shown to have profited from the gambling of another other than as a contestant. Contributory rakeback systems would eliminate the possiblity of that every happening and I note that AP just switched to that type of system over the summer.

[Wake up CALL]

[ QUOTE ]
Basically to "profit from gambling activity" you have to make a profit from someone else's play. As long as the rakeback is less than the rake you have played, it can be construed as merely a cost reduction incentive to play. The person offering the incentive is promoting, but the player is not profiting from. Once the player starts to make more from the kickback and he paid in rake, then he can be shown to have profited from the gambling of another other than as a contestant. Contributory rakeback systems would eliminate the possiblity of that every happening and I note that AP just switched to that type of system over the summer.


[/ QUOTE ]

No offense but I don't think you understand rakeback. I disagree with your assessment that the amount makes any difference at all.

[permafrost]

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[ QUOTE ]
BTW, several people have said what you did about New York players and I wonder how one comes to that conclusion?

[/ QUOTE ]
[ QUOTE ]
New York Penal Law Sec 225.00 Gambling offenses; definitions of terms.

3. "Player" means a person who engages in any form of gambling solely as a contestant or bettor, without receiving or becoming entitled to receive any profit therefrom other than personal gambling winnings, and without otherwise rendering any material assistance to the establishment, conduct or operation of the particular gambling activity.

A person who gambles at a social game of chance on equal terms with the other participants therein does not otherwise render material assistance to the establishment, conduct or operation thereof by performing, without fee or remuneration, acts directed toward the arrangement or facilitation of the game, such as inviting persons to play, permitting the use of premises therefor and supplying cards or other equipment used therein. A person who engages in "bookmaking", as defined in this section is not a "player."

4. "Advance gambling activity" A person "advances gambling activity" when, acting other than as a player, he engages in conduct which materially aids any form of gambling activity. Such conduct includes but is not limited to conduct directed toward the creation or establishment of the particular game, contest, scheme, device or activity involved, toward the acquisition or maintenance of premises, paraphernalia, equipment or apparatus therefor, toward the solicitation or inducement of persons to participate therein, toward the actual conduct of the playing phases thereof, toward the arrangement of any of its financial or recording phases, or toward any other phase of its operation. One advances gambling activity when, having substantial proprietary or other authoritative control over premises being used with his knowledge for purposes of gambling activity, he permits such to occur or continue or makes no effort to prevent its occurrence or continuation.

5. "Profit from gambling activity." A person "profits from gambling activity" when, other than as a player, he accepts or receives money or other property pursuant to an agreement or understanding with any person whereby he participates or is to participate in the proceeds of gambling activity.

9. "Bookmaking" means advancing gambling activity by unlawfully accepting bets from members of the public as a business, rather than in a casual or personal fashion, upon the outcomes of future contingent events.

12. "Unlawful" means not specifically authorized by law.

Sec. 225.05 Promoting gambling in the second degree.

A person is guilty of promoting gambling in the second degree when he knowingly advances or profits from unlawful gambling activity.

Promoting gambling in the second degree is a class A misdemeanor.



[/ QUOTE ]

I bolded the player definition, you will not, to commit a crime in NY, you have to do something other than be a player. Note, that does not mean that if you have money on the table you get to keep it. That can still be seized as proceeds of an unlawful gambling activity, but it still does not make the player be in violation of any criminal statute.

[/ QUOTE ]


This seems to say something relevant (http://caselaw.lp.findlaw.com/nycodes/c49/a12.html)

[Vern]

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Basically to "profit from gambling activity" you have to make a profit from someone else's play. As long as the rakeback is less than the rake you have played, it can be construed as merely a cost reduction incentive to play. The person offering the incentive is promoting, but the player is not profiting from. Once the player starts to make more from the kickback and he paid in rake, then he can be shown to have profited from the gambling of another other than as a contestant. Contributory rakeback systems would eliminate the possiblity of that every happening and I note that AP just switched to that type of system over the summer.


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No offense but I don't think you understand rakeback. I disagree with your assessment that the amount makes any difference at all.

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No offense taken, I do understand rakeback, I just disagree with the position that "profit" would be stretched to include reduced rake(cost for play).

[Vern]

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This seems to say something relevant (http://caselaw.lp.findlaw.com/nycodes/c49/a12.html)

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There is a different between unlawful and criminal in NY. This type of statute is very old and on the books in many states and is the legal basis for Qui Tam (http://en.wikipedia.org/wiki/Qui_tam) lawsuits. In NJ, a similar statute is the basis for the laywer sueing over fantasy sports. It is also why loans for gambling are not recoverable in NY.

[permafrost]

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This seems to say something relevant (http://caselaw.lp.findlaw.com/nycodes/c49/a12.html)

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There is a different between unlawful and criminal in NY. This type of statute is very old and on the books in many states and is the legal basis for Qui Tam (http://en.wikipedia.org/wiki/Qui_tam) lawsuits. In NJ, a similar statute is the basis for the laywer sueing over fantasy sports. It is also why loans for gambling are not recoverable in NY.

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Okay, I see the distinction now.

So online poker, as dealt in New York, is unlawful for the player instead of criminal. And the pending law would apply?

[Vern]

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This seems to say something relevant (http://caselaw.lp.findlaw.com/nycodes/c49/a12.html)

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There is a different between unlawful and criminal in NY. This type of statute is very old and on the books in many states and is the legal basis for Qui Tam (http://en.wikipedia.org/wiki/Qui_tam) lawsuits. In NJ, a similar statute is the basis for the laywer sueing over fantasy sports. It is also why loans for gambling are not recoverable in NY.

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Okay, I see the distinction now.

So online poker, as dealt in New York, is unlawful for the player instead of criminal. And the pending law would apply?

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No, the penal law does not apply, only the contract law. Since they are unlawful contracts, they are unenforcable through court action, but they are not unlawul in the sense one could be detained and charged with an offense.