The 2+2 Forum Archives: A very good breakdown of the bill

This is from a respected poster at the Rx:

A section by section breakdown of the Gambling Bill with commentary.....
I am going to attempt to decipher the Legislation passed last night by disecting the bill itself. Keep in mind – I am not a legal expert – I am just a normal guy who has read the bill 10 times and am going to take a stab at clarification.

The bill that pertains to gambling starts on page 213 of this document and runs through page 244. Use that document as reference.

The law is has subchapters 5361 through 5367.

5361: deals with the reasons congress felt the need to do this. It is short – runs through line 17 of page 214.

5362: definitions of terms to be used in the bill.
It defines:
1. Bet or Wager on pages 215 through line 11 on page 219. This is where they carve out horse racing and lotteries etc.
2. Business of Betting or Wagering on line 12 of page 219. This is defining a sportsbook or poker site or online casino.
3. Designated Payment System on line 17 of page 219. This is the method (such as EFT) by which a transfer of funds can be made.
4. Financial Transaction Provider on line 4 of page 220. This is your neteller, cc’s, WU, banks etc.
5. Internet on line 15 of page 220. We all know what the internet is – congress probably doesn’t.
6. Interactive Computer Service on line 18 of page 220. This is a tricky one and a very important one. I have been told that this is not ISP’s, but this is companies that own servers. The importance is coming later in the document.
7. Restricted Transactions on line 1 of page 221. Self explanatory.
8. Secretary and State.
9. Unlawful Internet Gambling that starts on line 13 of page 221 and runs through line 2 of page 228. 7 pages are devoted to spelling out this definition. This is where it says that betting on poker or sports is different than betting in a casino or horse racing. Very long, but pretty straight forward.
10. Other terms that starts on line 3 of page 228 and runs through the end of page 229. This defines credit cars, efts etc – obvious stuff.

5363: Describes the prohibition on ACCEPTANCE of any financial instrument for unlawful internet gambling (see definition above). This is the meat of the bill and is only about one and a half pages long. It says that no person engaged in the business of betting (bookmaker) may accept:
1. Credit including cc’s
2. An eft.
3. Check, draft, or similar instrument
4. Any proceeds (a catch all)

5364: Policies and procedures to identify and prevent restricted transactions.

A. Regulations: On line 7 of page 231 it states that there will be a 270 day period where a board including the Federal Reserve System and the Attorney General will prescribe regulations for which the banks and payment processors need to follow.

The goal of these policies and procedures is outlined on page 232 and they are basically saying that they need to identify and block the transactions and give the operators a procedure to follow.

B. Requirements for Policies and procedures. On line 12 of page 232 they talk about the requirements of this board to come up with procedures.

C. Compliance: Line 19 page 233. Talks about when operators of financial transactions are in compliance.

D. No liability for blocking or refusing transactions: Line 16 page 234. This one scares me a little. It basically said that the operator (your bank) cant be held responsible for blocking a transaction if they think it is gambling related.

E. Regulatory enforcement. Line 10 page 235. Which govt agencies will enforce this.

5365: Civil remedies. Line 3 page 236.

This subchapter is devoted to how the Govt courts and Attorney General may enforce the law.
Jurisdiction.
Proceedings. Line 11 page 236. This talks about the procedures of how an attorney general can prosecute. Seems like pretty standard stuff and nothing unique to this bill.
Limitation relating to Interactive Computer Services. Line 1 page 239. This is a key section and it all comes down to the definition of “interactive computer services”. In subparagraph A, line 6 page 239, it states that disabling access and removing links to online sites is necessary THAT RESIDE ON A COMPUTER SERVER THAT SUCH SERVICE CONTROLS AND OPERATES. From what I understand, this means hosting services, not ISP’s. So if a US company is hosting Pinnacle, they have to stop and not provide access. This is yet to be clarified and I am not ruling out that this includes ISP’s, but it is my opinion right now that it does not include ISP’s.
Limitations on injunctions against regulated persons. Line 5 page 241.
5366: Criminal penalties. Line 15 page 241.

This goes through the penalties for the PROVIDER if they are in violation.

5367: Circumventions prohibited. Line 4 page 242. This basically redefines that if you are in the business of taking bets, this law applies to you.

In conclusion, this is my opinion of how this will effect the average gambler:
Neteller might go away. It will be their choice, but they may decide not to take American Customers. They are not subject to this law as they are a foreign based banking operation – but they might abide by it.
There is a 270 day period to figure out how to enforce it. Right now there is no way because there is no coding of EFT’s. It is possible that they might not even find a way to do this or it might be too expensive.
Nothing in this bill criminalizes your behavior as the bettor.
Nothing in this bill criminalizes you if you are not a bookmaking operation and you send or receive payments.
The responsibility is on US banking, payment processors, and epayment services to stop this.
American hosts of illegal gambling websites will have to stop. I do not believe that ISP’s have anything to do with this and there will be no attempt to block pinnacle from getting to your computer.

Please remember. I am just a normal guy who has read this thing 10 times. I am not a legal expert. But the language is written very clearly in most places and I don’t think there is anything I am misinterpreting or misunderstanding.

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