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?