my preliminary analysis of the new bill (somewhat long)

[Wynton]

In a fit of delirium, I decided actually to take a look at the specific bill. Now, keeping in mind that I haven't spent that much time thinking about this - and the fact that the bill is certainly going to be subject to many possible amendments - here are some initial thoughts:

(1) The bill does not penalize individuals who play online poker. Of course, this is not surprising, as it would be totally unenforceable. Still, the bill is certainly intended to curtail online poker, along with other internet gambling.

(2) The bill provides for penalties for those who run the gambling businesses. I'm not sure yet how wide that net is cast, but it obviously applies to cardrooms. Fines and imprisonment are available penalties.

(3) In addition, the bill tries to formalize the prohibition on the credit card companies (and other financial institutions) from assisting in online gambling by accepting electronic payment and the like in facilitation of the gambling. I do not know how much this changes things in a practical sense, since most US credit cards won't get involved with poker sites. According to a summary, the bill contains some kind of mechanism dealing with the situation where the gambling business is located offshore but the gambling business used bank accounts in the United States. Still, I have no idea yet whether companies such as Neteller and Firepay would be affected. This is a key question that needs some close review.

(4) Moreover, the bill prohibits the cardroom from accepting electronic payments, or even checks, for the purpose of funding the gambling.

(5) Still, I see no prohibition against an INDIVIDUAL from sending money to a cardroom.

The bottom line is that the bill is an attempt to stop internet gambling - which I think plainly is meant to include poker - by penalizing those who run the cardrooms and are involved in the business of transmitting money to them, and not by punishing individual gamblers.

Finally, I think that we should recognize that there is one valid concern about internet gambling: namely, it really does provide an easy avenue for criminals to commit money laundering (even though I don't think there's any hard evidence that this is occurring). Yet, this concern is probably present for many other types of internet transactions also. Thus, one possible argument against this bill is that it is both too broad (because it deters legitimate economic activity) and too narrow (because it doesn't cover all types of internet commerce that could be a conduit for money laundering).

As I spend more time analyzing this bill, I'll make more comments. Please feel free to disagree (as if anyone really needs my encouragement).

[mpslg]

"The bill would allow federal, state, local, and tribal law-enforcement officials to seek help from Internet service providers to remove or disable access to Internet gambling sites that violate the act."

If they can convince the internet providers to block access to people living in the U.S., then we are screwed!

[mpslg]

[ QUOTE ]

Finally, I think that we should recognize that there is one valid concern about internet gambling: namely, it really does provide an easy avenue for criminals to commit money laundering (even though I don't think there's any hard evidence that this is occurring).

[/ QUOTE ]

That's why you regulate the industry. i.e. prohibition didn't work, but the government makes a ton of money taxing alcohol now.

[Wynton]

This is what happens when you skim things, without reading to the end.

Reading on (partly because of the last post), I see the language in the bill that states that a law enforcement agency (federal, state or tribal), "acting within its jurisdiction" (a very slippery phrase), may in a civil suit seek injunctive or declaratory relief to restrain or prevent ANY PERSON FROM PAYING OR ASSISTING IN THE PAYMENT OF BETS OR WAGERS, OR COMMUNICATING INFORMATION ASSISTING IN THE PLACING OF BETS OR WAGERS in interstate or foreign commerce****"

This is disturbingly broad. Contrary to what I said earlier, it does potentially authorize action (though not criminal actions) against individual poker players (even if that is not a likely sanction).

The bill continues to discuss removing or disabling access to online sites violating the bill "or a hypertextlink to an online site violating the section."

In other words, the government could seek at least civil action against websites that even contain LINKS to cardrooms.

(I'm going to bed. Tomorrow, I'll probably notice something else).

[bobbyi]

[ QUOTE ]
The bottom line is that the bill is an attempt to stop internet gambling - which I think plainly is meant to include poker - by penalizing those who run the cardrooms and are involved in the business of transmitting money to them, and not by punishing individual gamblers.

[/ QUOTE ]
I expect they will go after affiliates as well.

[Wynton]

[ QUOTE ]
[ QUOTE ]
The bottom line is that the bill is an attempt to stop internet gambling - which I think plainly is meant to include poker - by penalizing those who run the cardrooms and are involved in the business of transmitting money to them, and not by punishing individual gamblers.

[/ QUOTE ]
I expect they will go after affiliates as well.

[/ QUOTE ]

In many places - such as NY - there are prohibitions on "promoting gambling." I have long suspected that a creative prosecutor could argue that the affiliates are engaging in such prohibited conduct. And large affiliates and very busy web sites linking to cardrooms may turn out to be among the easier targets.

[theJoblessWobbly]

The money laundering angle is flimsy, and I think they're just using it as an excuse. Don't most sites have a maximum deposit for a period of time (such as a week)? It would be very hard to efficiently launder money with the long processing and withdrawal times, combined with deposit caps.

A few thousand isn't a problem, but I'm sure organized crime has much better methods of laundering their money than dealing with party poker. party would probably freeze their account for some ridiculous reason, and the mafioso would have to spend 3 weeks e-mailing party support trying to get something done about it, at which point party would convert their balance into party points and mention how generous of an offer that is.

[Wynton]

I agree that the money laundering angle is an excuse, but I disagree that it is "flimsy." Laundering money through poker sites, I believe, would be extremely simple. I have represented people accused of laundering money by the process of buying and selling real estate, which is a hell of a lot more cumbersome and requires much more time.

[mmbt0ne]

[ QUOTE ]
(4) Moreover, the bill prohibits the cardroom from accepting electronic payments, or even checks, for the purpose of funding the gambling.

[/ QUOTE ]

What are they going to do if party/stars/paradise does accept the transfer? It's not like the companies are in the US or subject to US regulations anyway.

[tommo]

anybody have any sort of forecast at all on the chances of this bill passing?

[b33nz]

[ QUOTE ]
anybody have any sort of forecast at all on the chances of this bill passing?

[/ QUOTE ]

Assuming the online poker sites do something about this, (and they will, why would they risk a 12 billion dollar empire?) I'm sure there will be money exchanging hands and this bill will be put to sleep... Or at the very worst online gambling will be taxed by the American government, but nonetheless, legal and still thriving.

[Wynton]

[ QUOTE ]
What are they going to do if party/stars/paradise does accept the transfer? It's not like the companies are in the US or subject to US regulations anyway.

[/ QUOTE ]

Just because the companies are not physically located in the US does not mean that they are not subject to our regulations. There is solid precedent for US to assert jurisdiction over companies doing substantial business here.

But whether the US can really enforce any of this is the million dollar question.

[Max Cohen]

[ QUOTE ]
But whether the US can really enforce any of this is the million dollar question.

[/ QUOTE ]

Wouldn't blocking pokerstars website and client, which also run play money non-gambling games, be construed as a violation of free speech?

[webmonarch]

[ QUOTE ]
"The bill would allow federal, state, local, and tribal law-enforcement officials to seek help from Internet service providers to remove or disable access to Internet gambling sites that violate the act."

If they can convince the internet providers to block access to people living in the U.S., then we are screwed!

[/ QUOTE ]

This is unquestionably the biggest problem. Anything else would not mean any changes (like the financal regulation) or would never be enforced.

[Wynton]

[ QUOTE ]
[ QUOTE ]
"The bill would allow federal, state, local, and tribal law-enforcement officials to seek help from Internet service providers to remove or disable access to Internet gambling sites that violate the act."

If they can convince the internet providers to block access to people living in the U.S., then we are screwed!

[/ QUOTE ]

This is unquestionably the biggest problem. Anything else would not mean any changes (like the financal regulation) or would never be enforced.

[/ QUOTE ]

I agree that this is probably the most important aspect of the legislation, which I managed to overlook in my initial haste to get a sense of the whole thing.

[webmonarch]

[ QUOTE ]
That's why you regulate the industry. i.e. prohibition didn't work, but the government makes a ton of money taxing alcohol now.

[/ QUOTE ]

Isn't it truly amazing how slow government is to understand this? What kind of income could they derive from this? Billions, certainly.

Second, I am always amused at the way we create a moral right in this country. Indulgences that are proven to kill people (alcohol, tobacco) are allowed, yet property morality is what is regulated first. Just comical.

[Jimbo]

[ QUOTE ]
[ QUOTE ]
But whether the US can really enforce any of this is the million dollar question.

[/ QUOTE ]

Wouldn't blocking pokerstars website and client, which also run play money non-gambling games, be construed as a violation of free speech?

[/ QUOTE ]

No

Jimbo

[LinusKS]

I don't understand the money laundering issue.

Are the crime syndicates supposed to be pretending to be winning money online, so they can declare the money legally?

That doesn't make sense.

Unless by laundering, you're only talking about using poker sites to move money from one place to another, without having to go through banks.

Even that doesn't make much sense though. The only effective way to use Neteller for that would be through one of their cards. Even then, you have to go to a bank.

It's not like Neteller sends cash through the mail.

[grapabo]

[ QUOTE ]
I don't understand the money laundering issue.

Are the crime syndicates supposed to be pretending to be winning money online, so they can declare the money legally?

That doesn't make sense.

Unless by laundering, you're only talking about using poker sites to move money from one place to another, without having to go through banks.

Even that doesn't make much sense though. The only effective way to use Neteller for that would be through one of their cards. Even then, you have to go to a bank.

It's not like Neteller sends cash through the mail.

[/ QUOTE ]

From what I've read, the money-laundering scenario brought up is making a deposit of the tainted money to a site, using it to gamble a little bit, and then withdrawing clean funds. I don't know the technology of whether this is feasible any more to remove the trace of the tainted money, but the policy researchers thought this was/is a potential problem.

[Wynton]

As I said before, I doubt that there is any actual evidence of significant money laundering occurring. But it really is easy to imagine.

Put most simply, money laundering is the process whereby you conceal the source or nature of criminal funds.

For example, someone could purchase drugs by transferring money to the seller at a cardroom (i.e., player to player transfer). The government then would have a hard time proving that the money amounts to proceeds of a crime. Or someone could deposit his profit of a crime into a cardroom, and then transfer it to a third person.

I think these concerns are legitimate, even though they are likely theoretical. But in any event, I certainly do not believe these concerns provide a sound rationale for outlawing internet gambling, for the reasons I stated at the outset.

[Warren Harding]

from goodlatte's website: http://www.house.gov/goodlatte/bobs%20bills%20109/internet%20gambling/netsummary109.htm

[ QUOTE ]

Provides Additional Law Enforcement Tools to Combat Illegal Gambling - The bill provides an additional tool to fight illegal gambling by allowing Federal, State, local and tribal law enforcement to seek injunctions against any party to prevent and restrain violations of the Act. For example, law enforcement can use such injunctions to get assistance from ISPs to remove or disable access to hypertext links to online gambling sites that violate the Act.


[/ QUOTE ]

"law enforcement tools" is always a euphamism.

[Shakes]

I thought this article might deserve a new thread, but just to be safe, I'll post it here. It basically says that, according to experts, the law will not come to be, and if it does, it will have little impact.

Red Herring (http://www.redherring.com/Article.aspx?a=15796&hed=Gambling+Law+Likely+Doome d&sector=Industries&subsector=EntertainmentAndMedi a)

[Wynton]

Thanks for the link to the article. I notice that the article relies principally - if not exclusively -upon the opinion of "Christopher Costigan, president of Gambling911.com, a gambling entertainment and information web site." Hopefully, this guy knows what he's talking about, but I really doubt that anyone can confidently make predictions here.

[dlk9s]

My favorite part about this bill is that it's another example of right-wing politicians trying to legislate their morals. On top of that, I can't for the life of me understand why playing a card game is immoral. It doesn't made any sense.

One more thought: the bill excludes fantasy sports. Yeah, because betting money on a collection of athletes whom you have no control over is not gambling. Not at all.

[ChrisAJ]

[ QUOTE ]
My favorite part about this bill is that it's another example of right-wing politicians trying to legislate their morals. On top of that, I can't for the life of me understand why playing a card game is immoral. It doesn't made any sense.

One more thought: the bill excludes fantasy sports. Yeah, because betting money on a collection of athletes whom you have no control over is not gambling. Not at all.

[/ QUOTE ]

There's a handful of left-wingers trying to legislate their morals through the bill as well. Rick Boucher is the lead co-sponsor, and he's far from being right-wing.

[TehPokarKing]

[ QUOTE ]
anybody have any sort of forecast at all on the chances of this bill passing?

[/ QUOTE ]

One of my biggest concerns with this bill, as both a disappointed Republican and someone involved in politics who definitely does not want to see this bill pass, is that the Congressional Republican Leadership could use this issue as an opportunity to distance themselves from Jack Abramoff in an election year. Any amount of distance that is placed between the GOP and Abramoff's idiotic/illegal behavior (and the more distance the better) will be highlighted from now until November.

If they decide to move this bill through it will happen relatively quickly in order to make sure it gets through in time for midterm elections. If the GOP decides to move on the bill the Dems will not look good fighting against it and will probably not make much noise. Both sides will want to emphasize the importance of values and integrity this fall, which is not good for online gambling.

That said, there will be people lobbying hard against this bill so it may never come out of committee. I guess what I'm saying is that it's not an important legislative priority for the Republicans so they would be more likely to use this issue to position themselves strategically for midterms. If the bill's not out of committee by the summer recess I wouldn't worry at all. That's sort of my quick, initial political analysis of this bill. We'll see what develops in the next few weeks.

TPK

[jj_frap]

[ QUOTE ]
[ QUOTE ]
My favorite part about this bill is that it's another example of right-wing politicians trying to legislate their morals. On top of that, I can't for the life of me understand why playing a card game is immoral. It doesn't made any sense.

One more thought: the bill excludes fantasy sports. Yeah, because betting money on a collection of athletes whom you have no control over is not gambling. Not at all.

[/ QUOTE ]

There's a handful of left-wingers trying to legislate their morals through the bill as well. Rick Boucher is the lead co-sponsor, and he's far from being right-wing.

[/ QUOTE ]

I'm very disappointed in Boucher: I respect him a lot for his efforts to protect consumers from being fleeced by unlabelled copyright protection on CDs and other forms of media.

I'm very libertarian as the left goes, but that may be in large part because I come from a background of Canadian left-liberalism and libertarian conservatism (the first ideology I really embraced personally...The story of my sharp turn left is too boring to merit being posted here.).

[grandgnu]

The people responsible for this bill want it to prevent money laundering? Yeah, and we're over in Iraq because we care about their freedom and want to bring them democracy.

Gimme a break, our politicians are corrupt scumbags and we need to overthrow the government (fight tha' powah!!!!)

What's to stop these money launderers from putting up an ebay auction with a buy-it now feature and then doing their transaction that way?

[Unabridged]

[ QUOTE ]
[ QUOTE ]
I don't understand the money laundering issue.

Are the crime syndicates supposed to be pretending to be winning money online, so they can declare the money legally?

That doesn't make sense.

Unless by laundering, you're only talking about using poker sites to move money from one place to another, without having to go through banks.

Even that doesn't make much sense though. The only effective way to use Neteller for that would be through one of their cards. Even then, you have to go to a bank.

It's not like Neteller sends cash through the mail.

[/ QUOTE ]

From what I've read, the money-laundering scenario brought up is making a deposit of the tainted money to a site, using it to gamble a little bit, and then withdrawing clean funds. I don't know the technology of whether this is feasible any more to remove the trace of the tainted money, but the policy researchers thought this was/is a potential problem.

[/ QUOTE ]

depositing, gambling, then withdrawling doesn't make sense. to clean the money they would have to dump it to a clean account and then withdrawl from there

[blip]

anyone know when this bill is scheduled to go to committee?

[Berge20]

All bills introduced are referred to committee. Committee Chairmen and Leadership determine what measures are considered by it and when. Quite frequently items never are even considered, but if action is taken on something in committee it is a sign the bill is moving.

[Machinehead]

[ QUOTE ]
One of my biggest concerns with this bill, as both a disappointed Republican and someone involved in politics who definitely does not want to see this bill pass, is that the Congressional Republican Leadership could use this issue as an opportunity to distance themselves from Jack Abramoff in an election year. Any amount of distance that is placed between the GOP and Abramoff's idiotic/illegal behavior (and the more distance the better) will be highlighted from now until November.

[/ QUOTE ]

I think this is the reason the bill will pass. One of the things Abramoff lobbied against was another online gambling bill.

Nothing could possibly make the GOP happier than passing a BS bill that might help them politically and continue appealing to the christian conservative morality base. The cherry on top is they get to reduce your civil liberties some more.

[grapabo]

For what it's worth, this bill (HR 4777) was referred to the House Judiciary Committee. Look for them to do the next step with it, whatever that may be.

[PokerBility]

does this mean that web sites with links to online poker are now legal? stands to reason that it is if they are trying to make it illegal.

[TehPokarKing]

So today, I was bored at work so I did a little more in-depth research into this bill. There are several things about the bill having been referred to the Judiciary Committee that concern me.

- This is not incredibly unusual but in the past bills like this (HR 4411 and others) have been referred to the Committee on Financial Institutions. This bill attempts to end online gambling by prohibiting the financial transactions that facilitate it, giving Financial Institutions jurisdiction in the matter. Why then, would they do this?

- The second thing that concerns me is that 9 of the 22 members of the Judiciary Subcommittee of jurisdiction (The Subcommittee on Courts, the Internet, and Intellectual Property) are cosponsors of the bill (including the chairman of the subcommittee as well as the bill's primary sponsor).

My basic point is that this is the sort of thing that the leadership might do (the majority whip is a cosponsor as well) if they wanted to fast track the legislation. It is not on the Committee or Subcommittee's calendar yet and hearings would be the next step.

I said before that it depends on whether or not the leadership wanted to use a bill that was not really a legislative priority for strategic purposes to prove themselves to have strong integrity, ethics, and values. Referring this bill to Judiciary seems to me to be that type of a move.

TPK

[TehPokarKing]

Obviously, everyone involved is now working mainly on getting the billed killed in committee. However, what is the general feeling from most people in this forum about the likelihood of an appeal, should this bill become law? I did take Con Law in undergrad but am certainly not a lawyer yet (I'm applying to law schools in the fall and preparing for LSATs now) but know that several here are. So what's your take on that? Will there be an appeal? In the event that an appeal occurs will the law not be applied/enforced until that is worked out?

TPK

[Wynton]

I think your terminology is a bit confused. I believe what you are really asking is whether anyone is likely to attempt to challenge the legislation in court once it is enacted, on one ground or another. This is pretty speculative at this point. You cannot just challenge legislation as unwise, but need some legal argument for doing so. Still, it is easy to imagine that some party will be able to find some plausible reason to challenge the legislation.

Incidentally, this type of challenge is not really an "appeal." An appeal is what occurs after there is an initial decision or judgment entered. Thus, if someone loses a lawsuit, or is convicted of a crime, they can appeal that decision to a higher court.

(I happen to be a criminal appeals attorney.)

[TehPokarKing]

Yes, that is what I meant. Like I said, I'm studying for LSATs which, as I'm sure you know, have very little to do with actually being a lawyer. /images/graemlins/smile.gif

TPK

[morphball]

[ QUOTE ]
This is what happens when you skim things, without reading to the end.

Reading on (partly because of the last post), I see the language in the bill that states that a law enforcement agency (federal, state or tribal), "acting within its jurisdiction" (a very slippery phrase), may in a civil suit seek injunctive or declaratory relief to restrain or prevent ANY PERSON FROM PAYING OR ASSISTING IN THE PAYMENT OF BETS OR WAGERS, OR COMMUNICATING INFORMATION ASSISTING IN THE PLACING OF BETS OR WAGERS in interstate or foreign commerce****"

This is disturbingly broad. Contrary to what I said earlier, it does potentially authorize action (though not criminal actions) against individual poker players (even if that is not a likely sanction).

The bill continues to discuss removing or disabling access to online sites violating the bill "or a hypertextlink to an online site violating the section."

In other words, the government could seek at least civil action against websites that even contain LINKS to cardrooms.

(I'm going to bed. Tomorrow, I'll probably notice something else).

[/ QUOTE ]

I do not practice constitutional law, so don't hold me to this, but I am pretty sure the bill could not prevent hyperlinks to sites that provided for play money gambling as well as real money gambling and not violate the First Amendment.

Nonetheless, I am glad Congress is protecting me, I am much better off playing craps then poker. Everyone here knows they are too...

[*TT*]

Am I wrong, or does this bill look like a paper tiger? Looks totally unenforceable since the companies who would be fined are foreign entities.

For what its worth, I would understand if they wished to crack down on gambling advertising. I think its gotten a bit out of hand.

TT /images/graemlins/club.gif