The heart of the matter: extradition
 

Cross-posted from the WSEX thread.

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I find it interesting that a site that generates no rake apparently wants to say on board and assume possible risk while "sources" predict Party, who makes an absurd amount, may boot the US.

I sound like a broken record, but as Ive said to a million of these posts, just because a CS rep on a site tells you their site isnt going anywhere and everything is A-OK does not mean its true, they dont want to create a scare.

Does anyone feel like explaining to me why publicly traded rooms are more likely to eject US players before non publicly traded ones? I dont get that.

Much obliged.

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I think it actually has to do with the country in which sites are located, and not the public/private status per se.

The part of the legislation that these rooms are responding to is not the credit cards/NETELLER business, which will sort itself out in due time -- there is NO reason to ban US customers until at least the 270 days that it takes to promulgate those regulations. Rather, they're responding to the portion of the bill that criminalizes the act of accepting bets from US customers (and which goes into effect immediately).

Does US law apply to foreign countries? Obviously in most cases no -- the US can't bust a Dutch person for smoking pot. However, this case is a lot more complicated, because while the sites themselves are located outside the US, their customers are not. It's really a very complicated question of international law.

The issue boils down to the practice of extradition ("the official process by which one nation or state requests and obtains from another nation or state the surrender of a suspected or convicted criminal.") As a general principle of international law, no country is required to surrender one of its own nationals to a foreign government. However, the country may choose to do so as a result of extradition treaties, and/or possibly the threat of embargoes or trade sanctions against the foreign jurisdiction.

Thus, it's not simply a matter of gambling execs being careful not to book a flight includes has a US layover, because the US can try and extradite an indvidiual who presently occupies foreign soil. Rather, the $64,000 question is how likely foreign governments are to cooperate with US extradition requests.

The answer: it depends. On the one extreme, you have the UK, which has very good relations with the US and is likely enough to be cooperative with it on these matters that UK-based companies might have something to fear. On the other extreme, you have Antigua, whose only real trade with the US is in the internet gambling business and who recently asked the WTO to tell the US to f*ck itself.

Therefore, what I think you're going to see is most of the gaming sites based in small, island nations continuing to accept US business, while sites located in the UK or other major countries will tend not to do so. Although I'm not ready to make a prediction about PartyPoker just yet, note it is based in Gibraltar, which is not an independent country but a UK protectorate. (888.com is also located in Gibraltar).

BTW, I think the WTO could wind up being quite important in all of this, and there's even some chance that it winds up being a relatively substantial international trade dispute.

Re: The heart of the matter: extradition
 

Bump. Know this post is a bore to read, but I think it's important.

Re: The heart of the matter: extradition
 

Very good post Nate. Very informative, and right on the money, I think.

Re: The heart of the matter: extradition
 

Thanks.

Re: The heart of the matter: extradition
 

I agree with your analysis. I think it is going to be hard for the sites based in the U.K. to continue doing business with the U.S. It was a lot easier when the status of U.S. law was "unclear." Now that Frist has cleared that up for us, I think there are going to be a lot of sites shutting their doors to the U.S. in the coming weeks.

Re: The heart of the matter: extradition
 

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Rather, the $64,000 question is how likely foreign governments are to cooperate with US extradition requests.

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It is my understanding that most extradition treaties require that the crime in question be considered a crime in both countries, correct? Under this notion, the extradition treaty between the UK and the USA does not apply.

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BTW, I think the WTO could wind up being quite important in all of this, and there's even some chance that it winds up being a relatively substantial international trade dispute.

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I wish that I could share your optimism. The WTO told the USA to get its IG laws in line with international standards, and the USA responded with an emphatic "[censored] You!" For years our country's government has all but ignored the WTO, so why would we start paying attention now?

I mean, really, does anyone expect the US Government to cave under threat of possible trade sanctions from Antigua?

Re: The heart of the matter: extradition
 

[ QUOTE ]

BTW, I think the WTO could wind up being quite important in all of this, and there's even some chance that it winds up being a relatively substantial international trade dispute.

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If this is indeed the case and the US fails to abide by international law which we seem so fond of doing how will this effect this business?

Will we see most sites move to places like antigua? Will the US begin to prosecute actual players?

Also in your opinion what kind of time frame are we looking at for major shake ups in the industry to occur such as sites blocking us customres etc?

Re: The heart of the matter: extradition
 

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Bump. Know this post is a bore to read, but I think it's important.

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I agree. Thanks for the post!

Re: The heart of the matter: extradition
 

Thanks for another good post Nate.

Found your last paragraph concerning the possiblity of WTO involvment and a substantial trade dispute interesting. This has the potential to turn into a big, contentious, sticky mess--one that will leave Congress and First with a lot of egg on their faces. (Now that's a visual I enjoy contemplating.)

Re: The heart of the matter: extradition
 

Very good post as usual nate

Re: The heart of the matter: extradition
 

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[ QUOTE ]
Rather, the $64,000 question is how likely foreign governments are to cooperate with US extradition requests.

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It is my understanding that most extradition treaties require that the crime in question be considered a crime in both countries, correct? Under this notion, the extradition treaty between the UK and the USA does not apply.

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BTW, I think the WTO could wind up being quite important in all of this, and there's even some chance that it winds up being a relatively substantial international trade dispute.

[/ QUOTE ]

I wish that I could share your optimism. The WTO told the USA to get its IG laws in line with international standards, and the USA responded with an emphatic "[censored] You!" For years our country's government has all but ignored the WTO, so why would we start paying attention now?

I mean, really, does anyone expect the US Government to cave under threat of possible trade sanctions from Antigua?

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Drew:

The heart of the question is this: how likely is a company based in country XX to care that it is violating US law? If XX is the United Kingdom, then the answer is "a great deal", while if XX is Antigua, the answer is "not very much at all".

The WTO itself is not that important in the immediate term, except to the extent that the US' refsual to adhere to Antigua's existing complaint in the WTO will embolden Antigua and other small nations to ignore the US law. However, the WTO could become more important if the Department of Justice does something crazy, the US attempts to impose sanctions on a country like Costa Rica, or one of the companies based in a large nation decides to fight this.

Re: The heart of the matter: extradition
 

Unless I'm mistaken, the WTO's rules state they can impose fees/tariffs on members to balance damage done to another member. If they feel something costs Country A $1 Bil due to Country B's actions, they fine them over time to reimburse country A. But how well that'd work agaisnt the US is anyone's guess.

Re: The heart of the matter: extradition
 

I wrote this as a response yesterday. Sorry guys, but you live in the USA and don't get the news like we do here in Europe.

The UK will extradite faster than you can type PWNED.

This was a very high profile case and I assure you that the people in Gibraltar are VERY familiar with this.

Sorry for the negative.

http://uk.news.yahoo.com/13072006/34...n-journey.html

Re: The heart of the matter: extradition
 

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If this is indeed the case and the US fails to abide by international law which we seem so fond of doing how will this effect this business?

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Make a list of the major poker rooms and divide them into big countries and small countries. Imagine that my thesis is right and that the big country sites ban US players, and the small country sites allow them. What will happen to the games? You can speculate about that as well as I can, but the likely answer is chaos in the near term with things settling down a bit in the medium term.

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Will we see most sites move to places like antigua?

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Yes, I believe that some countries will become "save-havens" for internet gambling, even more so than is already the case.

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Will the US begin to prosecute actual players?

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Not under this current legislation, IMO.

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Also in your opinion what kind of time frame are we looking at for major shake ups in the industry to occur such as sites blocking us customres etc?

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If PartyGaming follows 888's lead, then things will be very crazy very soon.

Re: The heart of the matter: extradition
 

Here is Wiki on extradition

Note the section:

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Generally, an extradition treaty requires that a country seeking extradition be able to show that:

* The relevant crime is sufficiently serious.
* There exists a prima facie case against the individual sought.
* The event in question qualifies as a crime in both countries.
* The extradited person can reasonably expect a fair trial in the recipient country.
* The likely penalty will be proportionate to the crime.


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If I was an officer of a potential target company I would be concerned about it, if I was a shareholder, I may say take the heat, that is why we are paying you.

Note that NY refused to extradite one of the recently arrested execs (bodog?) to LA. So tough to know if Britian will extradite to the US, I guess. Fair to say we know where Antigua stands.

Re: The heart of the matter: extradition
 

Does anyone have

- a breakdown of where sites are located?
- even better, informed opinions on how extradition-friendly those countries are?

Re: The heart of the matter: extradition
 

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Does anyone have

- a breakdown of where sites are located?
- even better, informed opinions on how extradition-friendly those countries are?

[/ QUOTE ]

this would be very helpful

Re: The heart of the matter: extradition
 

[ QUOTE ]
I wrote this as a response yesterday. Sorry guys, but you live in the USA and don't get the news like we do here in Europe.

The UK will extradite faster than you can type PWNED.

This was a very high profile case and I assure you that the people in Gibraltar are VERY familiar with this.

Sorry for the negative.

http://uk.news.yahoo.com/13072006/34...n-journey.html

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Perhaps it will be as fast as I can type PWNED.

However, your link appears to be a case where the crime is recognized by both sides of the atlantic. I wonder how the UK courts would consider (and, this is a court that decides and not politicians) a request for extradition for IG -- which is completely legal in the UK).

Re: The heart of the matter: extradition
 

I just want to take a minute to thank you for providing all of this information and your analyses Nate. You, Berge, and Mr. K have all been excellent posters the past x weeks/months leading up to this and all three of you deserve to be praised. All of the information you share is greatly appreciated.

Re: The heart of the matter: extradition
 

Less customers (U.S. customers gone) would mean alot less tax revenue and job creation.

If England starts getting in the business of extradiction, I would bet most new sites would choose other countries to reside in and possibly existing ones moving.

Re: The heart of the matter: extradition
 

[ QUOTE ]
I just want to take a minute to thank you for providing all of this information and your analyses Nate. You, Berge, and Mr. K have all been excellent posters the past x weeks/months leading up to this and all three of you deserve to be praised. All of the information you share is greatly appreciated.

[/ QUOTE ]
Seconded. I might enjoy Baseball Prospectus more, but this is so much more helpful.

Would anybody like to speculate how much it would cost for a company like Party to relocate to one of these safer areas? I imagine that if they ban US players in the short-term and then move later on, they'll lose much of their American business permanently.

Re: The heart of the matter: extradition
 

Great post Nate.

I am no expert on international law, but these poker companies are legal entities carrying out legal business in many countries around the world.

Just because the US takes a dislike to it does not mean that the US law applies to these companies in any way or form. It is totally irrelevant (imo) that these companies may or may not accept US customers. The US has no power over them and its as simple as that really.

The US can only bring charges/action against entities under its control (ie its own citizens or businesses with a physical US presence).

A UK Court would laugh at an extradition request for someone who has not committed a crime punishable in UK law AND without even leaving the UK to commit said "crime".

Re: The heart of the matter: extradition
 

[ QUOTE ]
Great post Nate.

I am no expert on international law, but these poker companies are legal entities carrying out legal business in many countries around the world.

Just because the US takes a dislike to it does not mean that the US law applies to these companies in any way or form. It is totally irrelevant (imo) that these companies may or may not accept US customers. The US has no power over them and its as simple as that really.

The US can only bring charges/action against entities under its control (ie its own citizens or businesses with a physical US presence).

A UK Court would laugh at an extradition request for someone who has not committed a crime punishable in UK law AND without even leaving the UK to commit said "crime".

[/ QUOTE ]

I thought that was what happened with the Natwest situation. Isn't it? I don't know the details.

Re: The heart of the matter: extradition
 

[ QUOTE ]
[ QUOTE ]
I just want to take a minute to thank you for providing all of this information and your analyses Nate. You, Berge, and Mr. K have all been excellent posters the past x weeks/months leading up to this and all three of you deserve to be praised. All of the information you share is greatly appreciated.

[/ QUOTE ]
Seconded. I might enjoy Baseball Prospectus more, but this is so much more helpful.

Would anybody like to speculate how much it would cost for a company like Party to relocate to one of these safer areas? I imagine that if they ban US players in the short-term and then move later on, they'll lose much of their American business permanently.

[/ QUOTE ]

Although this is pure speculation, I cant imagine it would be too hard to relocate what needed to be relocated before the bills teeth take hold, making a seemless transition as obviously banning US players once will create a stigma that will definitely hurt them in the long run.

What exactly would they need to move anyways, just some offices? Servers? Will they need to set up different banks (as I think Stars and a few others use some Scottish bank which I imagine falls within extraditable territory).

Sorry if this is just rambling and incoherent, Ive been trying to absorb this stuff all day and the wine is kicking in.

Re: The heart of the matter: extradition
 

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[ QUOTE ]
Great post Nate.

I am no expert on international law, but these poker companies are legal entities carrying out legal business in many countries around the world.

Just because the US takes a dislike to it does not mean that the US law applies to these companies in any way or form. It is totally irrelevant (imo) that these companies may or may not accept US customers. The US has no power over them and its as simple as that really.

The US can only bring charges/action against entities under its control (ie its own citizens or businesses with a physical US presence).

A UK Court would laugh at an extradition request for someone who has not committed a crime punishable in UK law AND without even leaving the UK to commit said "crime".

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I thought that was what happened with the Natwest situation. Isn't it? I don't know the details.

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Yes, I'd imagine that the Natwest situation weighs large on the minds of UK-based gaming execs. Good background here.

Re: The heart of the matter: extradition
 

Iran and North Korea become offshore gaming server havens. They certainly won't be extraditing anyone to the U.S. Of course then I suppose the whole "online gambling funds terrorists" thing might begin to have a shred of validity...

Re: The heart of the matter: extradition
 

France is one major country that I can think of that isn't a fan of extradicting to the US. i don't know what their take is on internet gambling though

Re: The heart of the matter: extradition
 

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France is one major country that I can think of that isn't a fan of extradicting to the US. i don't know what their take is on internet gambling though

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This may be wrong, but I believe the only way France will not extradite anyone is because they may face the death penalty. however, if that is not a danger I believe they extradite fairly easily with the US.

Re: The heart of the matter: extradition
 

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France is one major country that I can think of that isn't a fan of extradicting to the US. i don't know what their take is on internet gambling though

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Online gaming would have to be illegal in France for them to be required to send anyone to the USA as part of an extradition. All the extradition treaties we sign include language that we will only extradite to other countries for offenses that are also offenses here. They put the same clause in their side. In addition, they are also able to no extradite on moral grounds if the death penalty is involved. But no country we have an extradition treaty with will send us someone in their jurisdiction for breaking a law in the US unless it would also be a violation of law there.

Re: The heart of the matter: extradition
 

The fact is that the "crimes" committed by Party or whoever are not punishable in UK law. It is legal for their business to operate in the UK. Nothing the US can say or do will change this fact. This is not the same as the allegations of financial crime as per Natwest three etc.

Why do you think the US had to wait for BetonSports director and whoever else they try to nab to come on US soil? These directors operate legal businesses in their own jurisdictions and would not be given up by extradition.

If I am a PartyPoker shareholder will I get arrested next time Im in US?

Re: The heart of the matter: extradition
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Great post Nate.

I am no expert on international law, but these poker companies are legal entities carrying out legal business in many countries around the world.

Just because the US takes a dislike to it does not mean that the US law applies to these companies in any way or form. It is totally irrelevant (imo) that these companies may or may not accept US customers. The US has no power over them and its as simple as that really.

The US can only bring charges/action against entities under its control (ie its own citizens or businesses with a physical US presence).

A UK Court would laugh at an extradition request for someone who has not committed a crime punishable in UK law AND without even leaving the UK to commit said "crime".

[/ QUOTE ]

I thought that was what happened with the Natwest situation. Isn't it? I don't know the details.

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Yes, I'd imagine that the Natwest situation weighs large on the minds of UK-based gaming execs. Good background here.

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Nate,

NatWest is completely irrelevant. They were violating a UK law as well as an American one. Internet Gambling is 100% legal in the UK and extradition requires that the act is illegal in both countries.

That isn't the case here and I can't see in a million years a UK court allowing an extradition for something that isn't illegal in the UK.

Re: The heart of the matter: extradition
 

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Iran and North Korea become offshore gaming server havens. They certainly won't be extraditing anyone to the U.S. Of course then I suppose the whole "online gambling funds terrorists" thing might begin to have a shred of validity...

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This is the most likely outcome in my opinion. Online poker for U.S. players isn't going to go away. Instead, it will move from being provided by legitimate sites like PartyPoker to being provided by illegitimate sites of dubious origin. Our government is so [censored] stupid.

I hope all of you guys get out there and vote. The republicans have about 3x as much campaign money as the Dems and the only way the will be defeated is if grass-roots peoples like us get out there and vote.

Re: The heart of the matter: extradition
 

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France is one major country that I can think of that isn't a fan of extradicting to the US. i don't know what their take is on internet gambling though

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This may be wrong, but I believe the only way France will not extradite anyone is because they may face the death penalty. however, if that is not a danger I believe they extradite fairly easily with the US.

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the US has repeatedly asked for Roman Polanski to be extradicted from his home in Paris and the french government has refused numerous times. I'm not sure if France does this on most things, but from what I have seen and read they rarely extradict to the US

Re: The heart of the matter: extradition
 

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The fact is that the "crimes" committed by Party or whoever are not punishable in UK law. It is legal for their business to operate in the UK. Nothing the US can say or do will change this fact. This is not the same as the allegations of financial crime as per Natwest three etc.

Why do you think the US had to wait for BetonSports director and whoever else they try to nab to come on US soil? These directors operate legal businesses in their own jurisdictions and would not be given up by extradition.

If I am a PartyPoker shareholder will I get arrested next time Im in US?

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word.

As far as Natwest:

http://www.kino.de/pix/newspics/181944_7.jpg

Re: The heart of the matter: extradition
 

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If I am a PartyPoker shareholder will I get arrested next time Im in US?

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No, one of the key benefits of a corporation is that it frees owners from legal liability under normal circumstances.

Re: The heart of the matter: extradition
 

Good post and thanks. I hadn't considered the extradition aspect. Now that you've brought it to our attention I think that other countries will not tolerate the pursuit of their business people as criminals when the activity is legal in the host country. For instance I don't think the Brits would tolerate the U.S. attempts to extradite an exec from Party for breaking U.S. laws. The Brits might discourage the exec privately but I don't see the Brits allowing a public pursut of this. IMO it's political suicide for Brit pols. If Great Britain is the most likely to extradite I think the execs have little to worry about. However, I can understand why they're concerned.

Re: The heart of the matter: extradition
 

I have written to Peter Mandelson, the European Commissioner for External Trade, to ask for clarification on their position on this.

Given previous debates over bananas, scottish woollen textiles, I also think this has the potential to be a sizeable issue.

The angle I emphasised was the carve out of US based interests (in particular online horse betting) from the legislation, which reflects protectionism rather than a moral imperative (which sadly is your own business).

Not sure whether it is worth other Europeans doing this? I am angry about this legislation, so dread to think the impact on you guys. Condolences, I'm afraid the US has just lost one of its few European supporters. I just don't know what your country stands for anymore.

Re: The heart of the matter: extradition
 

Nate - there have been a lot of news reports here in IK about this. You were correct in the directors simply fear ending up in American jails.

They have got some very poor legal advises that have potentially bust their company (certainly Party will no longer be the top dog - even if all this comes to nothing).

If I was their legal advisor I would tell them to issue a statment saying US financial laws do not apply to them and I would tell their directors not to visit US!

It is unreal that the directors would cripple their company voluntarily without a fight. It doesnt make sense for them to say "well we have a good presence in the rest of the world anyway" - 70% or more of their customers were from US and with the US casual player gone the customers from the rest of the world will be also.

Re: The heart of the matter: extradition
 

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Does anyone have

- a breakdown of where sites are located?
- even better, informed opinions on how extradition-friendly those countries are?

[/ QUOTE ]

party, pacific (888) - gibraltar (UK)
stars - isle of man (UK)
ongame - sweden
full tilt - USA (guess they are the most screwed here?)
paradise - UK (how come they dont cave same as party/888 then?)
crypto - canada
bodog - costa rica
ultimate - canada
absolute - canada(?)
b2b - sweden
wpx - antigua

Re: The heart of the matter: extradition
 

[ QUOTE ]
Nate - there have been a lot of news reports here in IK about this. You were correct in the directors simply fear ending up in American jails.

They have got some very poor legal advises that have potentially bust their company (certainly Party will no longer be the top dog - even if all this comes to nothing).

If I was their legal advisor I would tell them to issue a statment saying US financial laws do not apply to them and I would tell their directors not to visit US!

It is unreal that the directors would cripple their company voluntarily without a fight. It doesnt make sense for them to say "well we have a good presence in the rest of the world anyway" - 70% or more of their customers were from US and with the US casual player gone the customers from the rest of the world will be also.

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I can't believe Party rolled over so easily either. I don't play at Party very much nor do I own any stock of the parent company. With that said it seems like an incredibly dumb move from a business standpoint. If I was a shareholder I'd be outraged.

Edit: I also think that the execs at Party are relatively inexprerienced with running a high growth, high revenue business. Not sure about that as I don't know anything about previous management experience.