THIS PIECE OF LEGISLATION WONT WORK...PERIOD

[Berge20]

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Berge - it was one of the reasons why I wanted to make the post - to ask if anyone knows of the specific US legislation that prohibits US citizens from placing bets/playing poker using the internet?

This new legislation certainly doesnt prohibit it as I have argued. It refers to some "unlawful internet gambling" which it then kindly doesnt define other than refer to "any existing Federal and State law"

What exactly are these Federal or State laws (if any) that purport to make internet gambling illegal? If there are not any in existance then the maker of this bill (Frist) has produced a null law - completely ineffectual.

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I agree that this new language does not add any additional statute that covers exactly what Internet gambling is or is not, which may ultimately be its undoing.

However, I'm still not sure about the legal successes that could come from saying Internet gambling falls (or does not) under the wire act. That may be a court battle that has to cruise through the ranks if DoJ pursues this new law with any vigor.

Plus, as we are seeing...the actual statute may be less damaging to poker than what sites and banks will do on their own.

[adanthar]

Breaktwister,

I am a US lawyer as well. Although I do not practice in this field, I've done my research lately.

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Ok - lets examine this statement and the law in USA. Frisk is refering to the Wire Act 1961 when he says "internet gambling is illegal". However, The Wire Act DOES NOT MAKE INTERNET GAMBLING ILLEGAL. The Wire Act refers to penalties unpon betting <u>businesses</u> that operate within the USA.

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Yes, you are correct thus far. US citizens, as such, are still not prohibited from playing poker (but good luck finding a news outlet that will explain the difference.)

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Now onto the new regulations which, as Frisk declares himself, are designed to regulate financial institutions by getting them to block gaming tranactions. First of all this method is fundamentally flawed AS IT CAN ONLY APPLY TO US BASED FINANCIAL INSTITUTIONS.

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This is incorrect. It applies to any financial institution with any sort of physical presence, or possibly a substantial business presence (not necessarily the same thing) in the US. For example, the Royal Bank of Scotland's US branches cannot break this law in any way, *and* are potentially at risk even if only the English branches accept these bets, depending on the exact structure of their corporate firewall.

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<u>FLAWS</u>
For example, the definition of a <font color="blue"> "restricted tranaction" </font> refers to a tranaction which <font color="blue"> "the recipient is prohibited from accepting". </font>
Now, following common sense logic, if the receipiant of a transction is not based in the USA, how can the USA prohibit that party from accepting any tranactions?

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Easily. First, today's banks are interrelated to the point where most of them have some kind of US presence. Second, even if they do not, because the US will claim jurisdiction over these executives whenever a US citizen places such a bet, they are subject to arrest for violating US law whenever they touch US soil (see SportingBet).

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It therefore follows that the definition of a "restricted transaction" cannot be applied where the receipiant of a transaction is based outside the USA.

Therefore, if your USA based bank or credit card company refuses to make a foreign transction due to this new legislation then they are in breach of contract as this terrible piece of law (both in objective and drafting) clearly does not prohibit any such thing.

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A)is much too broad of a statement. For example, the US certainly can, and does, prohibit Hamas from receiving transactions from US soil, and punishes anyone that it finds doing this with prison time. (This is a very imperfect example, but nonetheless, what you are actually talking about is a jurisdictional question - and the US takes a very broad view of jurisdiction.)

B)is simply wrong. The primary (but not the only) reason is that the text of the bill itself clearly states that you cannot sue for refusal of service.

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The new law refers to <font color="blue"> "unlawful internet gambling" </font> which it defines as <font color="blue"> "any bet which involves the use of the internet and which is unlawful by any applicable Federal or State law". </font>

WHAT A LOAD OF GUFF!!!

This new law does not even define what "unlawful internet gambling" is! It simply refers to whatever existing law exists (if any) that purportedly already makes internet betting illegal. As above - the Wire Act does not apply to citizens not acting in the course of a business.

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1)Most states prohibit Internet gambling to one degree or another;

2)Federal law prohibits any sort of sports betting.

There *is* a viable challenge to this bill on the grounds that poker is a game of skill. Although legislative history refers to poker as covered by this bill, a judge could potentially disregard it (and many routinely do), so it is *possible* for a given court to find that playing poker does not count as either a sport or a game of chance. There is even some case law supporting this interpretation. However, I would not bet on this holding much water, because the judges that do not look on legislative history as important are exactly the social conservatives that would uphold the bill anyway.

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4) The law specifically does not prohibit any money tranaction to a company like Neteller.

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The sole question on this subject is whether Neteller facilitates interstate gambling. Arguing that it does not is just silly. Admittedly, if Neteller execs are fine with never setting foot on US soil again, they'll just go on as normal since they are pretty much unreachable, but if the soon to be drafted regulations wind up encompassing Neteller, no US bank will ever touch them.

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5) The law cannot stop US citizens making financial deposits to a non-US based institution. Any attempts to do so would be blocked by the World Trade Organisation.

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Yeah, Antigua already won that case. Guess what the US did?

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Quite why some non-US based companies are afraid of accepting business from US citizens is baffling. Have these big businesses not got any good lawyers?????

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They do. But most of them also have US contacts.

[JPFisher55]

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I also read the "Restricted Transactions" definition differently than you do.

My take is that it covers financial transactions initiated by US financial institutions that have an end at sites accepting illegal internet gambling.

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But Neteller and Firepay do not accept illegal internet wagers or bets. So how does this provision affect them. And they are not US financial institutions.

[Berge20]

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I also read the "Restricted Transactions" definition differently than you do.

My take is that it covers financial transactions initiated by US financial institutions that have an end at sites accepting illegal internet gambling.

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But Neteller and Firepay do not accept illegal internet wagers or bets. So how does this provision affect them. And they are not US financial institutions.

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I tend to agree with that, however if the regulations determine that those sorts of intermediaries facilitate an end run around the law then it may be upon the US insitutions not to deal with them.

[schroedy]

Andathar:

I think that the WTO case with Antigua is not parallel to a possible case involving the EU.

Otherwise, I mostly agree.

[breaktwister]

reply to berge

re: restricted transactions

The key point here is that the legislation defines a "restricted transaction" as one where <font color="blue"> "the recipient is prohibited from accepting under section 5363". </font>

If PartyPoker was the receipient of a potential transaction from your credit card company - would this be a "restricted transaction" according to the legislation? NO.

WHY?
Because PartyPoker (or any non-US company) is not under the US legal jurisdiction and cannot therefore be <font color="blue"> "prohibited from accepting under s5363" </font> as is required in order to produce a "restricted transaction!

[JPFisher55]

"I tend to agree with that, however if the regulations determine that those sorts of intermediaries facilitate an end run around the law then it may be upon the US insitutions not to deal with them."

US banks do not deal with Neteller or Firepay. They process EFT's with the banks servicing these two companies. No person actually sees the EFT. Banning an EFT from a foreign bank would likely violate international banking transactions. I just don't believe that will happen.
In fact banning the processing of checks to and from Internet Gambling Sites is not reasonable. It is cost prohibitive and would prevent banks from meeting regulations requiring check processing to occur within certain time periods. When you deposit a check, no person examines it. I recently had an unsigned check go right through the US banking system.

[catalyst]

I'm pretty sure I will be able to get my money into poker sites once this bill is enforced. It seems like the work-arounds won't be unbearable or anything. I think the main problem is that the fish, many of whom are in the US, won't bother to run through hoops so they can blowoff money at these tables. Let's face it, most winning poker players rarely even make deposits, the fish are the ones frequently depositing, and it will be them running through these hoops each time.

[Berge20]

I suppose it depends where you read the "or" in the definition.

Edit - I'm off to get some other work done. Good discussion though.

[adanthar]

Part of what you're missing in your OP/response is found in Nate's thread on extradition, who phrased it better than I did. The other part of what you're missing is that while Party execs are offshore/untouchable, credit card companies almost all refuse to perform gambling deposits in the first place (this has to do with a longstanding US common law tradition that gambling debts are unenforceable in contract) and are now super duper immune to lawsuits anyway.