oldmcycles
(member)
10/02/06 10:37 AM
The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

I. NELSON ROSE
PROFESSOR OF LAW, WHITTIER LAW SCHOOL
HOME OFFICE: 17031 ENCINO HILLS DRIVE
ENCINO, CALIFORNIA 91436
(81 788-8509
FAX: (81 788-3104
WEB SITE: www.GAMBLINGANDTHELAW.com
EMAIL: rose@sprintmail.com

Gambling and the Law®:
The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

© Copyright 2006, all rights reserved worldwide. GAMBLING AND THE LAW® is a registered trademark of Professor I Nelson Rose, www.GAMBLINGANDTHELAW.com.

Note – This paper is copyrighted. You may quote it at length, republish it or distribute it for free only if you include this copyright and trademark information.

The Unlawful Internet Gambling Enforcement Act of 2006 was rammed through Congress by the Republican leadership in the final minutes before the election period recess. According to Sen. Frank R. Lautenberg (D- NJ), no one on the Senate-House Conference Committee had even seen the final language of the bill. The Act is title VIII of a completely unrelated bill, the Safe Port Act, HR 4954, dealing with port security. It can be found on pages 213 -244 of the Conference Report: http://www.saveonlinegaming.com/hr49543.pdf. It is based on the Leach and Goodlatte bills, HR 4411 and HR 4777, but there are some important differences.

The following is a detailed analysis of the Act. The section numbers that follow refer to new sections that have been added to title 31 of the U.S. Code:
§5361 The Act begins with Congress’s findings and purpose. These include a recommendation from the discredited National Gambling Impact Study Commission, whose chair was the right-wing, Republican incompetent, Kay Coles James. Findings include the doubtful assertion that Internet gambling is a growing problem for banks and credit card companies. It correctly states that “new mechanisms for enforcing gambling laws on the Internet are necessary,” especially cross-border betting.

The Act contains a standard clause that it does not change any other law or Indian compact. It repeats this many times, to make sure that no one can use the Act as a defense to another crime, or to expand existing gambling.

Most importantly, the Department of Justice is arguing before the World Trade Organization, in the dispute between the U.S. and Antigua, that all interstate gambling is illegal under the Wire Act. The DOJ insisted that any Internet prohibition passed by Congress not expressly authorize Internet betting on Horseracing. The DOJ believes this will allow it to continue to argue that the Interstate HorseRacing Act does not do exactly what it says it does, legalize interstate horseracing.
§5362 Definitions.

Bet or wager includes risking something of value on the outcome of a contest, sports event “or a game subject to chance.” The Act otherwise allows contestants to risk money on themselves. The “game subject to chance” restriction is designed to eliminate Internet poker.

The Act then confuses the issue of skill by stating that betting includes purchasing an “opportunity” to win a lottery, which must be predominantly subject to chance. Someone will figure out a way to create an opportunity to win, where the opportunity is subject to some chance. But the Act expressly prohibits lotteries based on sports events.

Betting includes instructions or information. This eliminates the argument overseas operators used that the money was already in a foreign country, so no bet took place in the U.S.

The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, including futures, that are traded on U.S. exchanges. Boilerrooms and bucketshops, selling foreign securities are gambling. Insurance is not.

Free games are not gambling. But there is a special provision that allows sites to offer points or credits to players only if these are redeemable only for more games. Operators of free games, where players can win valuable prizes, will have to stop giving points for wins that can be redeemed for cash. Free bingo, on the other hand, can still give small cash prizes paid out of the advertising budget.

Fantasy leagues are legal, but subject to detailed restrictions. A fantasy team cannot be “based on the current membership of an actual team.” What they actually mean is a fantasy team cannot be composed merely of the players of a real team. There is no limit on the cost of entering, but prizes must be announced in advance, and not based on the fees paid by participants. Statistics must be derived from more than one play, more than one player, and more than one real-world event.

Being in the “business of betting or wagering” still does not include mere players. It also expressly does not include financial institutions involved in money transfers.

“Designated payment system” is a new term. It could have been labeled simply “target,” as in “you are the target of a criminal investigation.” It covers any system used by anyone involved in money transfers, that the federal government determines could be used by illegal gambling. The procedure will be that the Secretary of the Treasury, Board of Governors of the Federal Reserve System and Attorney General will meet and create regulations and orders targeting certain money transfer systems.

“Financial transaction provider” is a very broad definition covering everyone who participates in transferring money for illegal Internet gambling. This expressly includes an “operator of a terminal at which an electronic fund transfer may be initiated,” and international payment networks. This covers third party providers, like Neteller.

“Interactive computer service” includes Internet service providers.

“Restricted transaction” means any transmittal of money involved with unlawful Internet gambling.

“Unlawful Internet gambling” is defined as betting, receiving or transmitting a bet that is illegal under federal, state or tribal law. The Act says to ignore the intermediary computers and look to the place where the bet is made or received.

This does not completely solve the problem of Internet poker, or even Internet casinos. The Act does not expand the reach of the Wire Act, the main federal statute the DOJ uses against Internet gambling. Although the DOJ has taken the position that the Wire Act covers all forms of gambling, courts have ruled that it is limited to bets on sports events and races. State anti-gambling statutes have similar weaknesses, including the presumption that they do not apply if part of the activity takes place overseas. This new statute requires that the Internet gambling be “unlawful.” But it would often be difficult to find a federal, state or tribal law that clearly made a specific Internet bet illegal.

Nevada and other states are expressly permitted to authorize 100% intrastate gambling systems. Congress required that state law and regulations include blocking access to minors and persons outside the state.

Tribes were given the same rights, with the same restrictions. Two tribes can set up an Internet gaming system, if it is authorized by the Indian Gaming Regulatory Act. This means that tribes can operate bingo games linking bingo halls on reservations. They can also link progressive slot machines, if their tribal-state compacts allow. But they cannot operate Internet lotteries and other games open to the general public.

It is interesting that Congress decreed that states can decide for themselves if they want to have at-home betting on horseracing, but not on dogracing. Congress also decreed that tribes can operate games that link reservations, even across state lines, but not the states themselves: state lotteries are not exempt.

Congress had a little problem with the term “financial institution.” To force casinos to report large cash transaction, federal law was changed to define “financial institution” as including large gambling businesses. Congress had to undo that definition, so that in this Act casinos go back to being casinos.

The other definitions are standard or are described above.
§5363 “No person engaged in the business of betting or wagering may knowingly accept” any money transfers in any way from a person participating in unlawful Internet gambling. This includes credit cards, electronic fund transfers, and even paper checks. But it is limited to Internet gambling businesses, not mere players. It also would not cover payment processors, except under a theory of aiding and abetting.
§5364 Federal regulators have 270 days from the date this bill is signed into law to come up with regulations to identify and block money transactions to gambling sites. At this writing, President Bush had not yet signed this bill, but he will. So the regs will go into effect by the beginning of July 2007.

The regs will require everyone connected with a “designated payment system” to i.d. and block all restricted transactions. So all payment processors are suppose to have systems in place to prevent money from going to operators of illegal Internet gambling. The first step will undoubtedly be to take the credit card merchant code 7995 and expand it to all money transfers. Visa created the 7995 classification in 2001 to avoid having its credit cards used for online gambling. The federal government will order banks and all others involved with electronic money transfers to cease sending funds to any Internet operator who has a 7995 credit card merchant code. Any financial institution that follows the regs cannot be sued, even if it wrongfully blocks a legitimate transaction.

The Act allows the federal regulators to exempt transactions where it would be impractical to require identifying and blocking. This obviously applies to paper checks. Banks have no way now of reading who the payee is on paper checks and cannot be expected to go into that business. Banks tried to defeat this bill, not because they cared about patrons’ privacy, but because they knew that it would cost them billions of dollars to set up systems to read paper checks.

The great unknown is how far into the Internet commerce stream federal regulators are willing to go. The Act requires institutions like the Bank of America and Neteller to i.d. and block transactions to unlawful gambling sites, whatever they are. But, while the Bank of America will comply, Neteller might not, because it is not subject to U.S. regulations. Will federal regulators then prohibit U.S. banks from sending funds to Neteller? And would they then prohibit U.S. banks from sending funds to an overseas bank, which forwards the money to Neteller?

For financial institutions within the U.S, the Act provides that exclusive regulatory enforcement rests with their federal regulators, like the Federal Reserve Board. The Federal Trade Commission is supposed to enforce regulations on everyone else. It is extremely doubtful whether the F.T.C. will ever try to do anything about the Netellers of the world, who are beyond regular U.S. regulatory control.
§5365 Since there is no way to regulate overseas payment processors, the Act allows the U.S. and state attorneys general to bring civil actions in federal court. The courts have the power to issue temporary restraining orders, preliminary and permanent injunctions, to prevent restricted transactions. The only problem with this enormous power is that it is, again, practically useless against payment processors who are entirely overseas.

It is difficult to serve a company with the papers necessary to start a lawsuit, a summons and complaint or petition, if the company has no offices, or officers, in the U.S. Even if the papers for such a lawsuit can be served, there is normally no requirement that foreign countries enforce these types of orders. Other countries are particularly reluctant to enforce a T.R.O., which does not even require that the defendant be present. Preliminary injunctions are also often ignored, because they are issued without a full trial and can be modified at anytime by the trial judge. Neteller operates out of the Isle of Man. I do not know of any treaty or other law which would require the Isle of Man to enforce even a permanent injunction against one of its licensed operators.

The Act provides for limited civil remedies against “interactive computer services.” An Internet service provider can be ordered to remove sites and block hyperlinks to sites that are transmitting money to unlawful gambling sites. ISPs are under no obligation to monitor whether its patrons are sending funds to payment processors or even directly to gambling sites. But once it receives notice from an U.S. Attorney or state Attorney General, the ISP can be forced to appear at a hearing to be ordered to sever its links.

But the statute has an interesting requirement: The site must “reside on a computer server that such service controls or operates.” This would limit the reach of this statute to payment processors, affiliates and search engines that are housed on that particular ISP. The same problem of going after foreign operators and payment processors affects this section. Foreign ISPs are difficult to serve and not necessarily subject to federal court injunctions.

The greatest danger here would seem to be with affiliates. Any American operator can be easily grabbed. This includes sites that don’t directly take bets, but do refer visitors to gaming sites. If the affiliate is paid for those referrals by receiving a share of the money wagered or lost, it would not be difficult to charge the affiliate with violating this law, under the theory of aiding and abetting. Being a knowing accomplice and sharing in the proceeds of a crime make the aider and abettor guilty of the crime itself. The federal government could also charge the affiliate with conspiracy to violate this new Act.

The other danger lies with search engines. Although California-based Google does not take paid ads, punching in “sports bet” brings ups many links to real-money sites. This new Act expressly allows a federal court to order the removal of “a hypertext link to an online site” that is violating the prohibition on money transfers. But what prosecutor would want to be ridiculed internationally for trying to prevent Google from showing links?

The Act gives ISPs a little more security by declaring that they cannot be convicted of violating the Wire Act, unless, of course, the ISP is operating its own illegal gambling site.

This section of the Act ends with a limitation, that, frankly, makes no sense. It says that, after all the talk of getting court orders to prevent restricted transactions, “no provision of this subchapter shall be construed as authorizing” anyone “to institute proceedings to prevent or restrain a restricted transaction against any financial transaction provider, to the extent that the person is acting as a financial transaction provider.” This could be a typo, since the bill was rushed through without an opportunity to even be read. Or perhaps it means that banks can be ordered to not transfer money to gambling sites, but only if they know about it. It is indecipherable.
§5366 Criminal penalties: Up to five years in prison, and a fine. And barred from being involved in gambling.
§5367 The Act naturally makes ISPs and financial institutions liable if they actually operate illegal gambling sites themselves.

Lastly, the Act requests, but does not require, the executive branch to try and get other countries to help enforce this new law and “encourage cooperation by foreign governments” in identifying whether Internet gambling is being used for crime. The Secretary of the Treasury is told to issue a report to Congress each year “on any deliberations between the United States and other countries on issues relating to Internet gambling.” That report will go unread.

END
© Copyright 2006. Professor I Nelson Rose, Whittier Law School, Costa Mesa, CA is recognized as one of the world’s leading experts on gambling law. His latest books, GAMING LAW: CASES AND MATERIALS and INTERNET GAMING LAW, are available through his website, www.GamblingAndTheLaw.com.

I. NELSON ROSE

Professor I. Nelson Rose is recognized as one of the world's leading experts on gambling law. A tenured full Professor at Whittier Law School in Costa Mesa, California, Prof. Rose is also an internationally known scholar, author and public speaker.

Professor Rose is best known for his internationally syndicated column, "Gambling and the Law®" and his landmark 1986 book with the same name. The author of more than 1,000 published works, including GAMBLING AND THE LAW and BLACKJACK AND THE LAW. He wrote the chapter on Internet gambling for the first casebook on gaming law, GAMING LAW: CASES AND MATERIALS, and in 2005 co-authored INTERNET GAMING LAW (available at www.liebertpub.com/igl).

Harvard Law School educated, Prof. Rose is a consultant to governments and industry. He has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, including the first NAFTA tribunal on gaming issues, and has acted as a consultant to major law firms, international corporations, racetracks, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas, the province of Ontario, and the federal governments of Canada, Mexico and the United States.

With the rising interest in gambling throughout the world, Prof. Rose has addressed such diverse groups as the National Conference of State Legislatures, Congress of State Lotteries of Europe and the National Academy of Sciences. He has taught classes on gaming law to the F.B.I., at the University of Ljubljana in Slovenia, Sun Yat-sen University in China and the Universidad de Cantabria in Spain, and as a Visiting Scholar for the University of Nevada-Reno's Institute for the Study of Gambling and Commercial Gaming. Prof. Rose has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.


Sarge85
(Carpal \'Tunnel)
10/02/06 10:39 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

uhhh.....

I got nothing - looks pretty techy

Sarge


sdfsdf
(veteran)
10/02/06 10:40 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

summary??

Sarge85
(Carpal \'Tunnel)
10/02/06 10:43 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

summary??




Well it could be just spam for apparently a book he wrote, but i dont know enough legalnesse to know if he's on to something or not

Sarge


NajdorfDefense
(Arbing for Dollars)
10/02/06 10:54 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.




This guy is an idiot if he really thinks this.


blue_water
(journeyman)
10/02/06 10:59 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

You done wrote alot of words in one post.

How am I supposed to read all that.

Can you summarize it in a sentence or two, so I can understand what you're saying?


Shank
(journeyman)
10/02/06 11:08 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Quote:


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.




This guy is an idiot if he really thinks this.




He's clearly indulging in hyperbole, but there's some truth in what he says. Certainly most of the amateur investors that I know who trade the stock market (many of them successful and wealthy businessman) might as well be playing blackjack with the money ... at best the trading costs eat them up over time, at worst they ride some pretty wild swings up and down, and it's only the long-term upward trend in the markets that save them. Proof that they're gambling is evidenced by the fact that they would generally be much better off with a long-term more passive investment strategy.

FWIW, my favorite quote from his analysis is this bit of dry wit:

Quote:


§5366 Criminal penalties: Up to five years in prison, and a fine. And barred from being involved in gambling.





For the first few posters who didn't read what he wrote, do yourself a favour and take the time to do so - he does a good job of picking apart the absurdities of this piece of legislation. Ulimately it might not make any difference to the practical implications of this law, but you'll feel a little bit better about knowing just how stoopid it is.


gila
(Pooh-Bah)
10/02/06 11:12 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

I wouldn't blow this guy off so quick. I have heard his name for years as far as gambling and law goes.

Shank
(journeyman)
10/02/06 11:17 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

I wouldn't blow this guy off so quick. I have heard his name for years as far as gambling and law goes.




He's very well respected by the industry (B&M included) - you can take what he says at face value (after adjusting for his obvious distaste for a badly conceived and difficult to enforce law)


Wynton
(Carpal \'Tunnel)
10/02/06 11:22 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

This guy is arguably THE leading authority on internet gambling law. And, after a quick read, I agree with everything he wrote.

NY60
(member)
10/02/06 11:31 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Thank you very much Professor. Your post was very insightful.

It seems the Act tries to cover all the bases.

My question is can we not circumvent the Act by opening a bank account directly with the RBS Royal Bank of Scotland? It seems that your analysis indicates that they simply lack the resources to stop such transactions.

Also, your analysis seems to indicate that we can continue to do business with Neteller by transmitting a paper check which leaves only the ISP blocks as an issue.

Thank you once again!


howzit
(old hand)
10/02/06 11:36 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

v. good summary of the situation.

here's the deal with how 3rd party financial institution will interpret the Act. if neteller doesn't want to deal with the legal headaches, they may simply deny American customers. My opinion is that if neteller decides to shut its doors to Americans, another copy-cat service will pop up willing to take the risk.

Quote:


The great unknown is how far into the Internet commerce stream federal regulators are willing to go. The Act requires institutions like the Bank of America and Neteller to i.d. and block transactions to unlawful gambling sites, whatever they are. But, while the Bank of America will comply, Neteller might not, because it is not subject to U.S. regulations. Will federal regulators then prohibit U.S. banks from sending funds to Neteller? And would they then prohibit U.S. banks from sending funds to an overseas bank, which forwards the money to Neteller?




if you want to get paid, looks like cashier check is the way to go. . .
Quote:


The Act allows the federal regulators to exempt transactions where it would be impractical to require identifying and blocking. This obviously applies to paper checks. Banks have no way now of reading who the payee is on paper checks and cannot be expected to go into that business. Banks tried to defeat this bill, not because they cared about patrons’ privacy, but because they knew that it would cost them billions of dollars to set up systems to read paper checks.






and for the internet techinical wording. . .
Quote:


For financial institutions within the U.S, the Act provides that exclusive regulatory enforcement rests with their federal regulators, like the Federal Reserve Board. The Federal Trade Commission is supposed to enforce regulations on everyone else. It is extremely doubtful whether the F.T.C. will ever try to do anything about the Netellers of the world, who are beyond regular U.S. regulatory control.
§5365 Since there is no way to regulate overseas payment processors, the Act allows the U.S. and state attorneys general to bring civil actions in federal court. The courts have the power to issue temporary restraining orders, preliminary and permanent injunctions, to prevent restricted transactions. The only problem with this enormous power is that it is, again, practically useless against payment processors who are entirely overseas.




the ease of transferring money from your bank to Neteller type services will be w/how willing neteller is break US law and hide under the umbrella of a foreign location.


sergsz
(enthusiast)
10/02/06 11:39 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

"Being in the “business of betting or wagering” still does not include mere players."

I am glad that this is the prevailing interpretation. But is there any language in the bill that makes this explicit, or is this just something that's assumed and that DOJ could change their mind on whenever they want. Specifically, is it feasible that those filing as professional gamblers will face increased legal risks in the near future?


Copernicus
(Carpal \'Tunnel)
10/02/06 11:51 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

"Being in the “business of betting or wagering” still does not include mere players."

I am glad that this is the prevailing interpretation. But is there any language in the bill that makes this explicit, or is this just something that's assumed and that DOJ could change their mind on whenever they want. Specifically, is it feasible that those filing as professional gamblers will face increased legal risks in the near future?




Yes there is specific language, but I think Prof Rose missed one nuance.

The language is that it makes it illegal for a "person" (which includes natural persons or legal entities) who is "engaged in the business" of betting or wagering.

That clearly excludes an individual, non-professional player. However, anyone who either files taxes as a professional gambler, or who due to his gambling income being so great, they could argue it is no longer a hobby and that the individual is in the business of betting or wagering.

Note that Prof. Rose is just that...a professor. Private practice lawyers will be more earnest in looking for loopholes, either on behalf existing retainer clients, or to attract new ones.


KingOtter
(Meddling Old Fart)
10/02/06 12:14 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Thank you very much Professor. Your post was very insightful.

It seems the Act tries to cover all the bases.

My question is can we not circumvent the Act by opening a bank account directly with the RBS Royal Bank of Scotland? It seems that your analysis indicates that they simply lack the resources to stop such transactions.

Also, your analysis seems to indicate that we can continue to do business with Neteller by transmitting a paper check which leaves only the ISP blocks as an issue.

Thank you once again!




The problem with opening overseas bank accounts to get around this is the fact that the poker sites take your address. And from recent press reports it appears that they will be closing accounts (once it is signed, yada yada) that originate from the US, no matter how the funding is sent about the world.

So you need an overseas address and an overseas bank account.

Unless the sites stop taking your address, and use some other kind of information for security purposes. Or some entrepreneur creates an online Mailboxes R Us and automatically forwards mail from a UK address to your American address..

Then the question still goes to, ok so YOU can play. How many others are going to go through these procedures to play?

The bill needs to be shutdown not subverted, and better legislation put in its place. Because this is an election year issue for Frist proper timing and discussion cannot possibly take place. American lobby groups can only hope to deal with government over the next couple years and hope to replace it with more responsible legislation.

disclaimer: I'm not an expert and don't pretend to be one so take what I say with a grain of salt.


8Mile
(newbie)
10/02/06 12:29 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

This guy is arguably THE leading authority on internet gambling law. And, after a quick read, I agree with everything he wrote.




Yeah, I don't get what the first several posters are whining about. I've been searching this site since Saturday trying to find an understandable and authoritative explanation of the law, and finally I have found one.


jrbick
(Carpal \'Tunnel)
10/02/06 12:35 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Quote:

Quote:


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.




This guy is an idiot if he really thinks this.




He's clearly indulging in hyperbole, but there's some truth in what he says. Certainly most of the amateur investors that I know who trade the stock market (many of them successful and wealthy businessman) might as well be playing blackjack with the money ... at best the trading costs eat them up over time, at worst they ride some pretty wild swings up and down, and it's only the long-term upward trend in the markets that save them. Proof that they're gambling is evidenced by the fact that they would generally be much better off with a long-term more passive investment strategy.






Truth. My step-dad bought up a bunch of Syrius Radio before Stern moved (in anticipation of Stern's premier). He doesn't have any other stock. Well, he kept the stock. And kept it, and kept it, and kept it. Pretty sure he's taken a large loss by now. Sheesh.


holdme
(and hitme hard)
10/02/06 01:08 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Thank you professor.

Vern
(Pooh-Bah)
10/02/06 01:33 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

I still wonder how his lawsuit against the big american corporations is going. I see nothing on Lexis or the NJ court's web site.

Press Release on Nelson's Site


Snipe
(old hand)
10/02/06 03:00 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

First of all, this was a great post. The Prof's points are well reasoned and quite valuable IMO. I took the time to read both the the act itself, some of the Rep's responses to the act, and the profs breakdown, and am in agreement with Howzit's comments that how Neteller deals with the situation is large component of how successful the act will be.

HOWEVER, while Neteller is the choice of 2+2ers, many of the more casual patrons (fish) will indeed drop off as their main means of deposit (from a small sample of people I personally know) is ATM or eCheck. This will absolutely have a sustainable impact.

One thing I'm unclear about after reading the act is whether proceeds from gambling activities transferred to your Netteller account prior to the act which sit in the account AFTER the act is invoked are subject to the seizure clause outlined in 1085.

To be honest, my real question here is "At what price am I willing to gamble and take a significant position (relative to my portfolio size) in NLR.L" (If it drops below $100 you can DEFINATELY count me in - $120? Probably)


jrz1972
(Carpal \'Tunnel)
10/02/06 03:09 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Being in the “business of betting or wagering” still does not include mere players. It also expressly does not include financial institutions involved in money transfers.




Quote:

“Financial transaction provider” is a very broad definition covering everyone who participates in transferring money for illegal Internet gambling. This expressly includes an “operator of a terminal at which an electronic fund transfer may be initiated,” and international payment networks. This covers third party providers, like Neteller.




Quote:

The great unknown is how far into the Internet commerce stream federal regulators are willing to go. The Act requires institutions like the Bank of America and Neteller to i.d. and block transactions to unlawful gambling sites, whatever they are. But, while the Bank of America will comply, Neteller might not, because it is not subject to U.S. regulations. Will federal regulators then prohibit U.S. banks from sending funds to Neteller? And would they then prohibit U.S. banks from sending funds to an overseas bank, which forwards the money to Neteller?




These are the key parts of Rose's article as far as "the Netller question" goes. Neteller is very obviously NOT a target of this legislation. As Rose notes, they may voluntarily comply, but they're under no obligation to. (And if they did, some other firm would just come along and fill that niche).

I think it's very unlikely that US banks would end up blocking transactions to Neteller, since Neteller itself isn't in the business of betting or wagering, which means that transfers to Neteller are not "restricted transactions" under this bill.

I posted on this topic a few times yesterday, and I'm now seeing a fair amount of stuff coming from people who've read the bill and reached similar conclusions.


Sixth_Rule
(enthusiast)
10/02/06 05:58 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:


Quote:
--------------------------------------------------------------------------------


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.


--------------------------------------------------------------------------------



This guy is an idiot if he really thinks this.







Um K no he's not, think before you talk.


Vern
(Pooh-Bah)
10/02/06 06:00 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

I still wonder how his lawsuit against the big american corporations is going. I see nothing on Lexis or the NJ court's web site.

Press Release on Nelson's Site



I am a moron and it is too late to edit my post


schroedy
(addict)
10/02/06 06:10 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Is the Act unlawful, or is Internet Gambling unlawful?

A question that only a lawyer and an activist could ask.


oldmcycles
(member)
10/02/06 10:47 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

First let me just say for anyone who thinks I am the Professor.
I am not.
Just posting his words.
Second my post is a sticky on 2+2.


TruePoker CEO
(Pooh-Bah)
10/02/06 10:56 PM
Re: Poker, specifically ...

Prof. Rose is a very able lawyer, his writing is due respect.

Professor Rose wrote: The “game subject to chance” restriction is designed to eliminate Internet poker.

I think this ignored the issue of whether the poker business model is covered. I would agree that online casinos would be covered with this "game subject to chance" language from Section 5363, but that does not mean that poker businesses fit the prohibition language. Poker sites do not have a stake in the outcome, how can they be in the "business" of having a stake in the outcome ?


JPFisher55
(old hand)
10/02/06 11:48 PM
Re: Poker, specifically ...

Dear TruePoker Ceo;
Problem is that the poker website is accepting a bet or wager on behalf of the player who makes it against another player.
The good news is that the states are mixed on the issue of whether poker if a game of skill or chance. Some states ban any games where money is bet and uses cards or dice to cover poker, etc. So the language "subject to chance" or similar language is ambiguous and subject to judicial interpretation.
I am waiting for someone to challenge this law in court. I think that it will be a group of US poker professionals endorsing a poker website. Problem for your website and the other foreign poker websites is that they do not have standing to sue since they are not subject to US jurisdiction.


mosta
(Pooh-Bah)
10/02/06 11:58 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Quote:


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.




This guy is an idiot if he really thinks this.




having spent several years as a member of a national securities exchange making markets in equity derivatives, I'd be very interested for you to explain how what I did is any different from what a sports book in vegas, or an online book, does--aside from legal categorizations. you can bet up, or down, we give a two-sided market, and then move the line.


pikachu
(member)
10/03/06 01:01 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

I was kind of disappointed not to see a constitutional analysis on the Commerce Clause, which, I am assuming, is the legal authority for the Unlawful Internet Gambling Enforcement Act of 2006.

In reading the Act, it appears Neteller is a "Financial Transaction Provider" (section 5362(4)) and not "a person engaged in the business of betting or wagering" (section 5362(2)). If so, the Act does not apply to monetary transfers to or from Neteller from a U.S. bank or credit card company (it only applies to monetary transfers to a person engaged in the business of betting or wagering per section 5363). This would make Neteller a non-U.S. based Financial Transaction Provider.

Poker sites are persons engaged in the business of betting or wagering, but are also non-U.S. based.

A transaction between Neteller and a poker site is between two non-U.S. based entities.

The Commerce Clause allows Congress to regulate interstate commerce, or U.S. commerce with a foreign nation, but not commerce between two non-U.S. based entities.

If the Commerce Clause is the authority for the Act, it does not give Congress the authority to regulate transactions between Neteller and poker sites.

I have thought of various other defenses to the Act, but this one seems the most obvious.

Disclaimer: I'm a pokemon, use the information in this email at your own risk.


five4suited
(veteran)
10/03/06 02:38 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Quote:

Quote:


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.




This guy is an idiot if he really thinks this.




having spent several years as a member of a national securities exchange making markets in equity derivatives, I'd be very interested for you to explain how what I did is any different from what a sports book in vegas, or an online book, does--aside from legal categorizations. you can bet up, or down, we give a two-sided market, and then move the line.




I've always believed this.

However, I have the answer to your question...

In Vegas, anybody can sit down at the table, and/but the odds are against you.


Shank
(journeyman)
10/03/06 02:46 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Quote:

Quote:


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.




This guy is an idiot if he really thinks this.




having spent several years as a member of a national securities exchange making markets in equity derivatives, I'd be very interested for you to explain how what I did is any different from what a sports book in vegas, or an online book, does--aside from legal categorizations. you can bet up, or down, we give a two-sided market, and then move the line.




The real difference is that capital markets (allegedly) allocate capital efficiently, thus driving the economy, while gambling does nothing more than allocate capital (very) efficiently to casino owners.

TBH the reality is that the financial markets are more of a gamble than casinos, since in the short-term for most small investors the markets involve more variance than a crap shoot while in a casino or similar you should know that you are expected to lose your shirt if you play for long enough.


Shank
(journeyman)
10/03/06 02:50 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

I was kind of disappointed not to see a constitutional analysis on the Commerce Clause, which, I am assuming, is the legal authority for the Unlawful Internet Gambling Enforcement Act of 2006.

In reading the Act, it appears Neteller is a "Financial Transaction Provider" (section 5362(4)) and not "a person engaged in the business of betting or wagering" (section 5362(2)). If so, the Act does not apply to monetary transfers to or from Neteller from a U.S. bank or credit card company (it only applies to monetary transfers to a person engaged in the business of betting or wagering per section 5363). This would make Neteller a non-U.S. based Financial Transaction Provider.

Poker sites are persons engaged in the business of betting or wagering, but are also non-U.S. based.

A transaction between Neteller and a poker site is between two non-U.S. based entities.

The Commerce Clause allows Congress to regulate interstate commerce, or U.S. commerce with a foreign nation, but not commerce between two non-U.S. based entities.

If the Commerce Clause is the authority for the Act, it does not give Congress the authority to regulate transactions between Neteller and poker sites.

I have thought of various other defenses to the Act, but this one seems the most obvious.

Disclaimer: I'm a pokemon, use the information in this email at your own risk.




Great analysis for a midget anime, but don't Neteller fall foul of the "aiding and abetting" test? If so, even if they are non-US I would think that it would be legally acceptable for the regulations to prohibit Neteller-type transactions.

Practically I don't think this will be achievable, but it seems to me that we should expect the regulations to try achieve this, and hoping for a legal end-run play around it is wishful thinking (but I hope you're right anyway)


teddyFBI
(Bot Sleuth)
10/03/06 06:15 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

This guy is arguably THE leading authority on internet gambling law.




He has a very good international reputation. He's taught at the nation's best law schools (although now is at Whittier).
This is not spam.

This is written by THE most knowledgable guy on the planet about these things. He's also "on our side" and deserves some respect.


Doctilde
(stranger)
10/03/06 09:05 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

If so, the Act does not apply to monetary transfers to or from Neteller from a U.S. bank or credit card company (it only applies to monetary transfers to a person engaged in the business of betting or wagering per section 5363). This would make Neteller a non-U.S. based Financial Transaction Provider.




I think a serious point is being overlooked: The applicability argument is well and good and Neteller may not be classified as "in the business of betting or wagering" under the legislation BUT ------

The legislation seems to give every U.S. bank or financial institution an individual choice of how a "transaction provider" will be treated. It exempts them (the U.S. banks) from liability if they block/refuse any transaction from any -transaction provider- where they reasonably believe the transaction might be used for illegal Internet gambling.

To put it in a nutshell - it appears, does it not, that banks or financial institutions will have complete discretionary powers to reject ANY transaction under the auspices of it being related to illegal internet gambling.


jrz1972
(Carpal \'Tunnel)
10/03/06 09:10 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Banks are not going to unilaterally block EFTs unless they are required to do so by regulatory authorities. Remember: they don't want to have to do this in the first place. The last thing anybody should be worried about is the prospect of individual banks taking this bill too far.

The bill's language itself definitely doesn't cover Neteller. The only real hurdle we have to jump is just to see that regulators don't broaden the bill by including e-wallets as well as gambling sites, but I think that's pretty unlikely.


Doctilde
(stranger)
10/03/06 09:22 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Funny thing is that "the last thing anyone should worry about" sometimes turns into the first thing they should have. The fact remains, if it is so, that banks could say, "Hey. We are going to put as little effort into this crap as possible. Call the IT guy and have him find every payment method accepted by those online poker rooms and casinos and block them all. Now, on to bigger things, where are we having lunch?"

dneedle1
(journeyman)
10/03/06 09:26 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

What Doc just said has a TON of merit. I'm a lawyer, and used to work for a large law firm, which would get issues such as this. And Doc's proposed solution is the one I would have been most likely to bring to the partner, if I thought after talking to the client it was workable. If I'm the General Counsel of Chase or Bank of America, (or their lawyers) I'm looking for the exits on this issue-- how can I keep myself out of jail and my company out of BIG trouble. And Doc outlines one possible solution.

Now for NETELLER and the like, the calculation is VASTLY different, because Neteller's business model goes to hell in a handbasket, whereas for Chase, the issue of where one is having lunch is more significant.


jrz1972
(Carpal \'Tunnel)
10/03/06 09:30 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

What Doc just said has a TON of merit. I'm a lawyer, and used to work for a large law firm, which would get issues such as this. And Doc's proposed solution is the one I would have been most likely to bring to the partner, if I thought after talking to the client it was workable. If I'm the General Counsel of Chase or Bank of America, (or their lawyers) I'm looking for the exits on this issue-- how can I keep myself out of jail and my company out of BIG trouble. And Doc outlines one possible solution.




If you're a lawyer, then you should be able to read the bill and realize that bank executives are not going to jail if they send money to gambling sites.

The only issue banks face is that they need to comply with whatever regulations come down from the Treasury Secretary and Fed.


Quanah Parker
(Pooh-Bah)
10/03/06 09:51 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Thank you for the great post.

So...we can play Fanatasy Bass Fishing for thousands of dollars legally?

SWEET!!!


scarr
(journeyman)
10/03/06 09:52 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Thanks for the analysis. It is a shame that this was rammed through congress. But for someone not privy to how things work in Washington, it goes a long way in explaining how all of the other stupid laws in this country came into being.

What happened to the "Land of the Free"?

I think this will all end up as a check box when you create a new account with a poker site: "I do not reside in the U.S.A. [y/n]"


Doctilde
(stranger)
10/03/06 09:53 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

What you appear to be missing is the tendency of the human animal to dismiss things that are not directly important to them and, if it's not important to them, to expend as little energy as possible in dealing with those "unimportant" things that they must deal with.

This concept is obviously not important to you therefore you dismiss it out of hand without intelligent debate or consideration. That's what could happen with the "power" given to financial institutions to make these types of decisions.

Look at PARTY, for goodness sake. They are announcing an immediate pullout of the U.S. market - and they have another 270 days before anything happens. Can you imagine the money they make in a week - let alone 38.57 weeks?

It's called a "knee jerk" reaction. Corporate bigwigs and bureaucratic bigwigs are renowned for "knee jerk" responses.


Doctilde
(stranger)
10/03/06 09:59 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Sorry Scarr and Quannah. My reply (#7523641) was for JRZ on message #7523530

TruePoker CEO
(Pooh-Bah)
10/03/06 10:06 AM
Re: Poker, specifically ... LA Times article quoting Prof Rose

In today's LA Times, Nelson Rose is quoted as follows:

That's a major weakness" of the new measure, said I. Nelson Rose, an expert in gambling law at Whittier Law School.
"It left out expanding the reach of the Wire Act, so poker sites can say, 'We're not covered by that.' "

Taking this as the basic premise, this failure to amend the Wire Act to include poker is the first step of two positive analytic threads:

First thread: Playing online poker is itself not "unlawful Internet Gambling" under Federal Law (leaving aside State law for now), so deposits for online poker are not in connection with "unlawful Internet gambling".

1. The UIGE Act only related to deposits in connection with "unlawful Internet gambling".

2. Poker is not unlawful Internet gambling (under the Wire Act, leaving aside State laws for this discussion.)

3. Therefore, deposits in connection with online poker are not retricted by the UIGE Act.

The second thread, which was my initial thought,:

1. Even assuming that online poker were construed to be "unlawful Internet gambling", the UIGE Act only applies to acceptance of deposits by persons "engaged in the business of betting or wagering".

2. Poker site business models do not involve any risk of the site dependent upon the outcome of play; poker sites do not "bet or wager".

3. The poker-only business model is not a person covered by the restrictions of the UIGE Act.

4. Perhaps also ?? (Where poker is regulated as "gambling" in State laws, it is specifically named ???)

TruePoker CEO


TruePoker CEO
(Pooh-Bah)
10/03/06 10:10 AM
Re: Poker, specifically ...

"Problem for your website and the other foreign poker websites is that they do not have standing to sue since they are not subject to US jurisdiction.'

I think Neteller/Firepay should seek clarification in an action for a Declaratory Judgment that poker is not covered.


TimM
(Carpal \'Tunnel)
10/03/06 11:21 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Quote:


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.




This guy is an idiot if he really thinks this.




Of course not every activity that can be done in the financial markets is gambling, but it is certainly possible for anyone to gamble in the stock market. There has been little effort to prevent this. One exception is the pattern day-trader rule.

But the derivatives market can hardly be considered anything other than gambling. Stock option contracts, for example, amount to little more than bets on where a stock price will be at a specific time. These bets are paid in cash or stock, between anonymous participants, without either party having any ownership interest in the company itself.


jrz1972
(Carpal \'Tunnel)
10/03/06 02:58 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Bump.

Everytime this thread falls off the front page, the ratio of stupid postings to intelligent postings spikes.


NajdorfDefense
(Arbing for Dollars)
10/03/06 02:59 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Quote:

Quote:


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.




This guy is an idiot if he really thinks this.




He's clearly indulging in hyperbole, but there's some truth in what he says. Certainly most of the amateur investors that I know ... at best the trading costs eat them up over time, at worst they ride some pretty wild swings up and down, and it's only the long-term upward trend in the markets that save them.




Right, the stock market has an upwards drift of 10% a year that online gaming does not. Big difference.

At best, you get a company like BRK or MSFT or EMC or MO early on. No online slot machine could ever match those riches.


Shank
(journeyman)
10/03/06 04:40 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:


Right, the stock market has an upwards drift of 10% a year that online gaming does not. Big difference.





Pretty much my point exactly.

If you buy and hold a diversified stock portfolio as part of a balanced portfolio stragey then you'll do fine in the long run (and certainly won't be gambling in any meaningful sense), whereas the vast majority of amateurs who trade actively experience far more variance and (on average) take a big knock to their IRR as a result of trading costs.

The fact that the 10% or so upward drift saves them doesn't make what they're doing any less of the same addiction to risk and variance that characterises casino gambling.

Note anyway that what Rose was more likely referring to was those financial markets that are substantially more volatile (and arguably more speculative) than stocks.

Quote:


At best, you get a company like BRK or MSFT or EMC or MO early on. No online slot machine could ever match those riches.




How many people did get MSFT early on AND hold it all the way? And of those, how many can really say that they foresaw how successful MSFT was going to be? So how many who did buy MSFT early on were really doing anything besides speculating and simply got lucky? Sounds a lot like playing the slots to me.

And FWIW, IGT's MegaJackpots paid a record $39,710,826.36 for a $1 spin in 2003 (see here) ... I'd say that trumps MSFT et al quite substantially


Betaseron
(stranger)
10/03/06 06:01 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Don't forget that this was passed attached to a port security bill that allows convicted fellons; murderers, gun runners, rapist and the like to run our ports... they took the provision out preventing fellons from working but put the online gambling one in. Republicans know how to do things right thats for sure.

CORed
(Carpal \'Tunnel)
10/03/06 06:33 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

If the Commerce Clause is the authority for the Act, it does not give Congress the authority to regulate transactions between Neteller and poker sites.



"The Constitution is just a piece of paper." George W. Bush


Snipe
(old hand)
10/03/06 08:40 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

To be honest, my real question here is "At what price am I willing to gamble and take a significant position (relative to my portfolio size) in NLR.L" (If it drops below $100 you can DEFINATELY count me in - $120? Probably)




I'm a moron - I -EV'ed myself out of a 14.6% return today neglecting to capitalize on all the fire and brimstone.

Ugh. Stock Tilt.


ottsville
(Pooh-Bah)
10/03/06 09:08 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:


Look at PARTY, for goodness sake. They are announcing an immediate pullout of the U.S. market - and they have another 270 days before anything happens. Can you imagine the money they make in a week - let alone 38.57 weeks?






Counsellor, the act states that provisions must be in place to enforce this WITHIN 270 days, not AT 270 days. In theory, this could happen AS SOON AS it is signed into law.


pikachu
(member)
10/04/06 12:33 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Please ignore my previous post on the Commerce Clause, after a little more research I figured out that the legal authority for Congress to pass the UIGE is Congress' police powers to regulate criminal activity, in this case specifically money laundering and international terrorism. That is why politicians go on and on about linking gambling sites to money laundering and international terrorism (despite the rather tenuous connection, at best), if they did not, there would not be a legal basis for the UIGE.

disclaimer: I'm just a pokemon, use the information in this post at your own risk.


pikachu
(member)
10/04/06 12:53 AM
Re: Poker, specifically ... LA Times article quoting Prof Rose

Quote:


. . .

First thread: Playing online poker is itself not "unlawful Internet Gambling" under Federal Law (leaving aside State law for now), so deposits for online poker are not in connection with "unlawful Internet gambling".

1. The UIGE Act only related to deposits in connection with "unlawful Internet gambling".

2. Poker is not unlawful Internet gambling (under the Wire Act, leaving aside State laws for this discussion.)

3. Therefore, deposits in connection with online poker are not retricted by the UIGE Act.

. . .

TruePoker CEO



TruePoker CEO:
This was my second theory, that because the financial transaction had to be done in connection with "unlawful Internet gambling" under section 5363 and because internet poker was not considered unlawful internet gambling under the Wire Act (the applicable federal law under section 5362(10)), that poker sites were not prohibited from accepting deposits under federal law.

With regard to the applicable state law under section 5362(10), I have read that Washington, Nevada, Illinois, Indiana, Louisiana, South Dakota, Michigan, and Oregon have state laws that prohibit internet gambling. So these states would have to be blocked, but I assume the law is silent in the other 42 states regarding internet gambling.

The legal gray area here is that DOJ takes the official position that the Wire Act prohibits all internet gambling, but does not prosecute anything other than sports betting over the phone. Similarly, the 42 remaining states probably have statutes that prohibit gambling generally and would take the official position that these general statutes prohibit internet gambling, but will not enforce. When drafting the banking rules, the AG and the State AG's may ask the banks to respect their "official" position that internet gambling is illegal, even though they have no intention of actually enforcing it, and the banks will end up blocking all transactions to all gambling sites, including poker sites.

disclaimer: I'm just a pokemon, use the information in this post at your own risk.


GimmeDaWatch
(old hand)
10/04/06 06:14 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Quote:


The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, ...that are traded on U.S. exchanges.




This guy is an idiot if he really thinks this.




Speculating in options, futures, and commodities bears many similarities to gambling, especially poker. In general, it is a zero sum game (minus the commission, or rake) where people take calculated risks, and the better players win.
It's less similar to the stock or bonds market.


Wynton
(Carpal \'Tunnel)
10/04/06 10:11 AM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Please ignore my previous post on the Commerce Clause, after a little more research I figured out that the legal authority for Congress to pass the UIGE is Congress' police powers to regulate criminal activity, in this case specifically money laundering and international terrorism. That is why politicians go on and on about linking gambling sites to money laundering and international terrorism (despite the rather tenuous connection, at best), if they did not, there would not be a legal basis for the UIGE.

disclaimer: I'm just a pokemon, use the information in this post at your own risk.




Not true. The Constitution does not grant Congress any kind of general power to regulate criminal activity. And the legislative history clearly indicates that the Commerce Clause was relied upon here.


spock
(stranger)
10/04/06 03:12 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Any comment on this bit from the analysis?

Quote:

Nevada and other states are expressly permitted to authorize 100% intrastate gambling systems. Congress required that state law and regulations include blocking access to minors and persons outside the state.




mosta
(Pooh-Bah)
10/06/06 10:46 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:


The real difference is that capital markets (allegedly) allocate capital efficiently, thus driving the economy, while gambling does nothing more than allocate capital (very) efficiently to casino owners.






good point that in the equity market as a whole everyone can be better off (so far). I was thinking more specifically of the derivatives markets, which are a zero-sum (party-counterparty) game. already, that's just gambling. then when you add in fees (transactions costs) and spreads that customers face--then it really is a sports book.


Bukem_
(Carpal \'Tunnel)
10/09/06 07:04 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

BUMP.

The Author of this article was on my local(reno/tahoe area) sports talk radio staton for at least 20 minutes today.

He gave very a detailed, accurate update about what is currently going on. Cleared up lots of things that someone not in the know could have misconceptions on.

Said that he thought Party made a mistake making a decision to pull out so hastily, and while others sites have followed suit, many have contacted him in the past week and are reconsidering their actions.

I'm looking for a transcript, I'll post it if I find it.


uninformedposter
(stranger)
10/11/06 03:32 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Quote:

Banks are not going to unilaterally block EFTs unless they are required to do so by regulatory authorities. Remember: they don't want to have to do this in the first place. The last thing anybody should be worried about is the prospect of individual banks taking this bill too far.

The bill's language itself definitely doesn't cover Neteller. The only real hurdle we have to jump is just to see that regulators don't broaden the bill by including e-wallets as well as gambling sites, but I think that's pretty unlikely.




I think the banks will block EFTs directly to PS and UB and other poker or gambling sites. However, I think they will not block EFTs to the intermediaries like NetTeller, simply because of the chance that the Fund may or may not end up at an outlaw site two steps after it leaves their hands.

Quote:


Funny thing is that "the last thing anyone should worry about" sometimes turns into the first thing they should have. The fact remains, if it is so, that banks could say, "Hey. We are going to put as little effort into this crap as possible. Call the IT guy and have him find every payment method accepted by those online poker rooms and casinos and block them all. Now, on to bigger things, where are we having lunch?"





Along these same lines, there is a whole step inbetween the IT blocking "gambling sites" and blocking all intermediates like NetTeller, which makes that job of US Banks blocking ALL sites which might have ever conducted a transaction with a poker site, a much less likely outcome.

I can easily see US Banks blocking any direct transactions with gambling sites. But NetTeller does not engage in gambling, so there is little reason for a US Bank to stop doing business with NetTeller. I don't see the banks taking that extra step to try to figure out where the money ends up after they send it to NetTeller.

Of course, I could be completely wrong, and its also very likely that some banks will do this (block ALL transactions to ANY site which has ANY distant connection to ANY Gambling site), while others won't bother because the law does not yet force them to.

Note: Take my predictions with the same grain of salt as the guy who screams "I'll kill your man" on Saturday morning bookmaker infomercials, trying to get you to buy his picks for the weekend. In other words, its all just MHO.


King Ben
(stranger)
10/18/06 07:45 PM
Re: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

First they came for the communists, and I did not speak out--
because I was not a communist;
Then they came for the socialists, and I did not speak out--
because I was not a socialist;
Then they came for the trade unionists, and I did not speak out--
because I was not a trade unionist;
Then they came for the Jews, and I did not speak out--
because I was not a Jew;
Then they came for me--
and there was no one left to speak out for me.

-Pastor Martin Niemöller, 1945

Today they came for the poker players, and know one spoke up, because they do not play poker. But next they will come for all of those who did not speak.

Where is freedom in America when laws are fast tracked at the 11th hour, dishonestly hidden in legislation that congress people and senators havent even read? All the while the "news", which is supposed to be another check and balance upon the government, doesn't even mention it!

www.infowars.com



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