UIGEA Law Question

[DeadMoneyDad]

Let us assume I have a US business that has nothing to do with gambling, poker, banking, the only US payment transactions I do normally are in the course of regular business of selling a product.

In the course of my business I have an unhappy customer.
The customer some how finds out I am a poker player and offers to take the refund as a transfer of funds form my individual poker account to his individual poker account.

Have I broken the letter of the Law of the UIGEA law.

Now if in the process of resolving the dispute, the unhappy customer agrees to take something less than a full refund, which might be seen as me making a profit from the totality of the transaction would I be in legal jeporady?

Extra credit for the tax issues of the "profit".

Just wondering out loud, but it is a serious question. /images/graemlins/wink.gif

D$D

[Legislurker]

[ QUOTE ]
Let us assume I have a US business that has nothing to do with gambling, poker, banking, the only US payment transactions I do normally are in the course of regular business of selling a product.

In the course of my business I have an unhappy customer.
The customer some how finds out I am a poker player and offers to take the refund as a transfer of funds form my individual poker account to his individual poker account.

Have I broken the letter of the Law of the UIGEA law.

Now if in the process of resolving the dispute, the unhappy customer agrees to take something less than a full refund, which might be seen as me making a profit from the totality of the transaction would I be in legal jeporady?

Extra credit for the tax issues of the "profit".

Just wondering out loud, but it is a serious question. /images/graemlins/wink.gif

D$D

[/ QUOTE ]

I think RICO would get you if UIGEA is found constitutional.

[DeadMoneyDad]

[ QUOTE ]
[ QUOTE ]
Let us assume I have a US business that has nothing to do with gambling, poker, banking, the only US payment transactions I do normally are in the course of regular business of selling a product.

In the course of my business I have an unhappy customer.
The customer some how finds out I am a poker player and offers to take the refund as a transfer of funds form my individual poker account to his individual poker account.

Have I broken the letter of the Law of the UIGEA law.

Now if in the process of resolving the dispute, the unhappy customer agrees to take something less than a full refund, which might be seen as me making a profit from the totality of the transaction would I be in legal jeporady?

Extra credit for the tax issues of the "profit".

Just wondering out loud, but it is a serious question. /images/graemlins/wink.gif

D$D

[/ QUOTE ]

I think RICO would get you if UIGEA is found constitutional.

[/ QUOTE ]

Given the existing business is completely above board I'm not too worried about a RICO predicate, it seems like a pretty flimsy hook to me. But the FBI doesn't see to have a sense of humor so I get your point.

D$D

[Skallagrim]

This is the kind of question I get asked in bars all the time. Doctors and car mechanics know what I mean. Usually I charge at least a drink to answer such a question (and require a waiver against information compromised by intoxication).

For you D$D, I will forgoe the drink fee this far: The UIGEA makes it a crime for a person in the business of betting and wagering to accept money by means of electronic transfer from any person in a US jurisdiction where the bet would be illegal under state or federal law. That is the only criminal offense under the UIGEA. The penalty is up to 5 years in jail. The federal Courts do recognize the "aiding and abetting" doctrine for accomplice liability in criminal charges.

If that isnt enough for you, you will have to buy me that drink after all /images/graemlins/wink.gif .

Skallagrim

[DeadMoneyDad]

[ QUOTE ]
This is the kind of question I get asked in bars all the time. Doctors and car mechanics know what I mean. Usually I charge at least a drink to answer such a question (and require a waiver against information compromised by intoxication).

For you D$D, I will forgoe the drink fee this far: The UIGEA makes it a crime for a person in the business of betting and wagering to accept money by means of electronic transfer from any person in a US jurisdiction where the bet would be illegal under state or federal law. That is the only criminal offense under the UIGEA. The penalty is up to 5 years in jail. The federal Courts do recognize the "aiding and abetting" doctrine for accomplice liability in criminal charges.

If that isnt enough for you, you will have to buy me that drink after all /images/graemlins/wink.gif .

Skallagrim

[/ QUOTE ]

If you are comming to DC in Oct. I'll be happy to buy you more than one. If not would I put myself and you under possible criminal prosecution by offering to pay my legal tab in FT or PS $$???

What do you drink? I mean the difference between an on-tap beer and a 50 year old single malt is quite large! Lawyers! You have a few dealing with them and learn to properly ask questions to what seems like a simple offer! /images/graemlins/smile.gif


D$D

[Richas]

A man rings his lawyer and says - "will you answer two questions without charging me?"

The lawyer replies "yes, what was your other question?"

[MiltonFriedman]

No. You will not have violated UIGEA. You are not in the business of betting or wagering. As a matter of fact, no one in your hypothetical has ever engaged in a bet or wager.

As a matter of fact, no one has made a deposit to any Internet gambling business, let alone an 'illegal' one.

The "difference" between what he paid and what you refunded may be some sort of sales revenue to your business from his original order. It is not "profit" from any refund transaction.

That having been said, don't make it a habit. In fact, don't do it at all. If you are in DC politics, perception is way more fragile than whether or not you broke any law. If you go ahead and do it, your already unhappy customer will have something on you and will tell everyone he can.

[Merkle]

Since a business sale was recorded as income at the time of the sale. The amount of the refunded would be reported at the time of the refund. They would not neccassirily even fall in the same accounting period. But since only the amount of your refund would be subtracted from sales in that period, the positive difference would still have reflected as positive sales income.

[Skallagrim]

Im still unsure whether I can re-arrange work commitments to attend the fly in. If I can, I will definitely take you up on your offer D$D! And my favorite drink is beer, but I do like imported beer. An occasional shot of Irish Whiskey is sometimes also appropriate.

And since you offered, the fuller answer is that you have certainly not violated the UIGEA directly. There is a theoretical argument that you aided a UIGEA violation IF, IF, IF one can also say a poker site is in the business of betting and wagering, and IF poker is covered by the UIGEA (depends on the state law here - and since he is getting the funds at a poker site, it depends on the laws of HIS state).

Practically, this "aiding and abetting" violation is extremely unlikely - the DOJ hasnt even tried to bug epassporte yet.

But also, as was mentioned, a disgruntled customer is always someone to watch for any avenue of attack - would this guy try and screw you by claiming in a civil suit that, among other things, you tried to settle a debt with "illegal" poker money? If so, maybe its best to just send him cash.

Skallagrim

[DeadMoneyDad]

[ QUOTE ]
Im still unsure whether I can re-arrange work commitments to attend the fly in. If I can, I will definitely take you up on your offer D$D! And my favorite drink is beer, but I do like imported beer. An occasional shot of Irish Whiskey is sometimes also appropriate.

And since you offered, the fuller answer is that you have certainly not violated the UIGEA directly. There is a theoretical argument that you aided a UIGEA violation IF, IF, IF one can also say a poker site is in the business of betting and wagering, and IF poker is covered by the UIGEA (depends on the state law here - and since he is getting the funds at a poker site, it depends on the laws of HIS state).

Practically, this "aiding and abetting" violation is extremely unlikely - the DOJ hasnt even tried to bug epassporte yet.

But also, as was mentioned, a disgruntled customer is always someone to watch for any avenue of attack - would this guy try and screw you by claiming in a civil suit that, among other things, you tried to settle a debt with "illegal" poker money? If so, maybe its best to just send him cash.

Skallagrim

[/ QUOTE ]

In truth the question was intended to spark a little further understanding of the UIGEA law. So many people completely misunderstand the law. Many seemly inteligent poker players even think it is illegal to play on-line now and are afraid to deposit.

The offer for the "refund" in poker money was offered by the other party not me, and at best I only have a slight benifical interest in the business, and my name appears no where for the company. I have fully documented the offer and all transactions. I even checked the laws of his home state. This isn't my first trip around a block, just this one.......

But having dealt with lawyers in the past, as near as I can tell we have a verbal contract. An offer of services for a reasonible payment, exact payment defined and accepted (actually services offered before payment even fully defined).

An imported beer and a shot it is!


D$D

[Wynton]

There is absolutely no way this would constitute a violation of UIGEA, even under an aiding and abetting theory.