Few seem to have noticed how the new law \"fixes\" the Wire Act
 

The Executive branch has repeatedly stated that the Wire Act covers poker and casino games as well as sports betting.

So far the courts have rejected this theory. Therein lies a big practical problem for those who wish to prosecute offshore poker sites. The judge might dismiss the case without even hearing the evidence and create a damning precedent in the process. Then the Government might find that they couldn't even intimidate anyone anymore.

Everyone says the new law didn't change the legal status of online poker but as a practical matter this is not true for the sites. Ineffectual state laws against online poker have been de facto converted into Federal felonies. State XYZ may have a completely neglected law saying that operating an online poker game is a misdemeanor punishable by a $1000 fine. Maybe the DA has real crimes to fight and wouldn't prosecute even if the case was gift-wrapped for him.

Doesn't matter. The Feds can still bring Federal charges carrying a 5-year sentence against the site if they offer service in this state. A real law the judge can't ignore. No more fretting over whether the Wire Act will stand up against poker in court.

I think this is a significant reason why some of the sites are reacting as they are.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

Of course. However, those who won't step foot on US soil have little to fear, as Antigua and Costa Rica (for example) would laugh at an attempt of extradiction.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
Of course. However, those who won't step foot on US soil have little to fear, as Antigua and Costa Rica (for example) would laugh at an attempt of extradiction.

[/ QUOTE ]

especially after the US laughed at the wto ruling...i bet these countries are just waiting for somethign to happen

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

If you read True Poker CEO's posts you will see that the new angle is not being in the "business of betting or wagering". I think it is quite telling that Party announced the US block right away but Pokerstars is still considering their options - they might be thinking they can beat the definition of Unlawful Internet Gambling, where Party clearly cannot.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

Ryno, this angle is nonsense. If what you suggest is the case, Party and others would have simply blocked US gamblers from accessing their casino games.

Stars may be able to distance themselves from prosecution by taking their business offshore, appointing new managers, etc etc but that's doubtful, at least in the short term.

Stellar's post is spot on. This intention of this law is very clear, and the language regarding "games subject to chance" is directly targeted to make the law apply to poker, where before it did not.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
This intention of this law is very clear, and the language regarding "games subject to chance" is directly targeted to make the law apply to poker, where before it did not.

[/ QUOTE ]
No, it doesn't make the law apply to poker where before it did not (other than through he mechanism that the OP mentioned -- by converting state crimes into federal crimes).

The "games subject to chance" language is in the section defining gambling. So poker is gambling; big deal. The law does not prohibit transfering funds in connection with Internet gambling. It prohibits transfering funds in connection with unlawful Internet gambling. "Unlawful" means already unlawful. The UIGEA does not expand the scope of what constitutes unlawful gambling.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
"Unlawful" means already unlawful. The UIGEA does not expand the scope of what constitutes unlawful gambling.

[/ QUOTE ]

This is what I. Nelson Rose says also.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

Let's be clear about this, as evidenced by Ryno's comments above, some of you still think TruePokerCEO knows what he's talking about and amazingly, still trust the guy. As Stellar says, the effect of this law is to broaden the scope of the wire act; it doesn't make gambling itself illegal, only breaking other laws related to internet gambling (i.e. state laws or the wire act). It effectively gives them the power to prosecute under federal law, if a current law has been broken.

Let's have a look at who it applies to:

This is the definition of a bet or wager:

[ QUOTE ]
(1) BET OR WAGER- The term `bet or wager'--

`(A) means the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game <u>subject</u> to chance , upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome;

[/ QUOTE ]

Now here's the killer in this legislation, and the reason True Poker CEO is either incompetent, or a liar (take your pick):

[ QUOTE ]
`Sec. 5367. Circumventions prohibited

`Notwithstanding section 5362(2), a financial transaction provider, or any interactive computer service or telecommunications service, may be liable under this subchapter if such person has actual knowledge and control of bets and wagers, and--

`(1) operates, manages, supervises, or directs an Internet website at which unlawful bets or wagers may be placed, received, or otherwise made, or at which unlawful bets or wagers are offered to be placed, received, or otherwise made; or

`(2) owns or controls, or is owned or controlled by, any person who operates, manages, supervises, or directs an Internet website at which unlawful bets or wagers may be placed, received, or otherwise made, or at which unlawful bets or wagers are offered to be placed, received, or otherwise made.'.

[/ QUOTE ]

Sites that continue to accept US players ARE BREAKING THE LAW. If someone says otherwise, they are a liar. The text you read above is the reason Party and others with actual lawyers on their staff have pulled out of the US market, and quickly.

The only people who can get around this are ones who live in places without extradition treaties with the US, but they are still breaking the law. If they tell you otherwise, do no listen to another word they say.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

I agree with Stellarwind about the purpose of the law. The definition of a bet includes games subject to chance. But S5363 says "no person engaged in the business of betting or wagering...", and Pokerstars does not bet or wager with its customers. You have to admit that poker-only sites could at least have a case here.

FWIW I don't know why Party does not turn off their casino games to US players. Maybe they figure the "business of..." could easily be interpreted to include hosting a poker game even if you have no interest in the outcome. But True Poker CEO has come right out and made the argument that I am making here, with (I would hope) some legal counsel.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

Just to be really, really, clear on this...the act of two people playing poker against each other constitutes an unlawful bet or wager. Sites that provide a poker service fall under sec 5367:

"operates, manages, supervises, or directs an Internet website at which unlawful bets or wagers may be placed, received, or otherwise made, or at which unlawful bets or wagers are offered to be placed, received, or otherwise made;"

By facilitating the placing of bets and wagers, they are guilty under this act and the applicable state or federal law.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
Sites that continue to accept US players ARE BREAKING THE LAW.

[/ QUOTE ]
Only if they were already BREAKING THE LAW. Thus, the UIGEA does not update the Wire Act. It does not criminalize any gambling activity at all. (It criminalizes money transfers in connection with gambling activity, but only to the extent that such gambling activity was already illegal under other state or federal laws. The Act explicitly states in several places that it does not narrow or expand the scope of any other anti-gambling laws.)

If you're saying that the Act gives some federal teeth to previously ineffectual state anti-gambling laws, yes, it may do that.

But it does not update the Wire Act.

Updating the Wire Act is next on Leach's to-do list, but he hasn't done it yet.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
Just to be really, really, clear on this...the act of two people playing poker against each other constitutes an unlawful bet or wager.

[/ QUOTE ]
In some states it does. Not in all states. And not under any federal law (including the UIGEA).

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
Only if they were already BREAKING THE LAW. Thus, the UIGEA does not update the Wire Act. It does not criminalize any gambling activity at all.

[/ QUOTE ]
Um yes. Reread what I wrote, that's exactly what I said.

[ QUOTE ]
it doesn't make gambling itself illegal, only breaking other laws related to internet gambling (i.e. state laws or the wire act). It effectively gives them the power to prosecute under federal law, if a current law has been broken.

[/ QUOTE ]

Also note the definition of a bet or wager. This will have an effect on the interpretation of the Wire Act by the courts ( as Stellar pointed out)

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

Missed S5367, because I thought that was meant to preempt a gambling site starting a financial service company that is a direct portal to their gambling facility. Still though, you did not bold the "if such person has actual knowledge and control of bets and wagers", and True Poker does not.

It's thin, don't get me wrong, but I still see how a poker-only site could think they could sweat this law.

Also I agree with you that a site like Party (if they continued to accept US customers) are clearly breaking the law whereas it was not clear with the Wire Act (and certainly this is why only sports book CEOs have been arrested to this point).

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

Control is not defined, but I think operating the software that allows for betting comes right under this definition. They also control whether someone can bet, and how much, as well as providing direct funding for your bets and wagers (i.e. your account/balance with the poker site), which is explicitly covered under another section. There's no wiggle room here. It's specifically designed to target online poker, and is very clear.

The term "control", in my opinion, is simply there to narrow it down from people who have just "knowledge" of the activity (which can't be illegal in itself).

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

If a site accepts our money and our bets and wagering though and is as you say breaking the law we (individual players in the U.S.) are still not breaking the law. Am I correct in this? So as long as sites decide to stick around and break the law we might as well continue to play poker since we will be doing nothing illegal. Correct?

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
So as long as sites decide to stick around and break the law we might as well continue to play poker since we will be doing nothing illegal. Correct?

[/ QUOTE ]
It depends on what state you're in. In many states, playing poker for money is illegal. (This is not affected one way or the other by the new federal legislation.)

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

Don't dismiss the OP's point too quickly. Although the House-passed amendment to the Wire Act was discarded, the Act which did pass both bodies does create a new federal crime.

His analysis is accurate that playing internet poker appears to be clearly illegal in some States. However, the Act still does require that a site be engaged in the "business of betting or wagering" to fall within its Section 5363 purview. This is a similar issue to the Wire Act not covering "poker'. A potential prosecution would have to cover why the legislation mentions sportsbooks and casinos specifically, but not poker, and adopts a "business model" criteria for coverage which does not cover purely poker sites.

Interestingly, the Act limits a State to seeking civil injunctive relief against restricted transactions. However, enforcement against Financial Institutions seems to require the promulgation of Regulations under Section 5364 and enforcement against regulated payment systems is a Federal regulatory matter. ... hence the up to 270 day window Neteller and others are looking at currently.

I am interested in what PStars decides of course, but the difference between Party acting immediately and PStars weighing options may be due to the lesser level of scrutiny afforded private companies.

Seems likely that some litigation will follow the Regs being promulgated in any event.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

Doesn't really matter which side of your Hobson's Choice I pick, I am either incompetent or a liar.

Except, Phil .... Could you explain how a poker site is somehow involved in the EXEMPTION provided by Section 5362(2). I kind of thought that exemption only applied to financial institutions, interactive computer services, or telecomunications services.... which of these is a poker site?

The section 5367 Non-circumvention language you cite is there to prevent one of these three types of businesses, otherwise expressly exempted, from also having 'actual knowledge and control of bets and wagers". It means that a sportsbook or online casino, which would otherwise be engaged in the business of betting or wagering cannot, by calling itself an interactive computer service, escape Section 5363 by reason of an express exemption. A purely-poker site does not have to avail itself of a Section 5362(2) exemption, because it is not covered in the first place.

There are no guarantees in statutory construction, but there is such a thing as strict construction of criminal statutes. Congress could have amended the Wire Act, but they did not.

It is getting tiresome to be called a liar by you .... I'll settle for "incompetent", I guess.

(I practiced law for almost 20 years, and have tried cases and argued statutory interpretations in appellate courts at the state and federal level, variously for the government, gaming clients, and other people facing regulatory issues, but I did NOT win every argument, so call me "incompetent" if it makes you feel better.)

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
By facilitating the placing of bets and wagers, they are guilty under this act and the applicable state or federal law.

[/ QUOTE ]

Your point is not really accurate. They are guilty under this act only if there is an applicable state or federal law. You are assuming that the courts will hold that the Wire Act applies to poker, but in the past they have held that it only applies to sports betting. You may be right, the courts may change their ruling, but no one knows what the courts are going to say.

Okay, you\'re \"really, really clear\" now, Phil, except for the law
 

Phil, your reasoning ignores the language of the Act.

First, you opine that "Just to be really, really, clear on this...the act of two people playing poker against each other constitutes an unlawful bet or wager." Really ? What part of this law or any federal law makes all playing poker over the Internet "really, really," clearly unlawful .... Bootstrap Phil ?

Next, you ignore the structure of the Act:

Section 5363 is the "prohibition"

Section 5362 expressly exempts three types of businesses from being within the definition of "business of betting or wagering". If you are claiming that one of these three types of businesses includes poker sites, then thanks for the express exemption and on to Section 5367.

Nevertheless, you go ahead and assume that 'Sites that provide a poker service fall under Sec 5367".

(I am missing which of the three types of businesses EXEMPTED by Section 5362(2) you are assuming is a poker site and is expressly exempt from the Act, I do not share your assumption that Section 5362(2) provides poker with an express exemption.... so Section 5367 would not apply to take away the express exemption.

Section 5367 only applies to three types of businesses, which are otherwise expressly exempt from Section 5363, the prohibition.

(Again, thanks Phil. You seem to prove the argument that a business which is NOT "engaged in the business of betting or wagering" falls outside of Section 5363. Otherwise why would the drafters hang an express exemption for three types of businesses upon their exclusion from that phrase's reach ?)

Assuming nevertheless that poker sites ARE exempted expressly, why do you keep skipping over the Section 5367 language about "actual knowledge and control of bets and wagers" ?

You may have something useful here, Phil ... if a site IS exempted by Section 5362(2), which you assume as a basic premise, then that exemption is NOT taken away if the Players and not the site, have control of the game's bets and wagers .... which sounds like poker to me ... you know, players making bets against each other and the House not making any bets.

Similarly, if a poker site tidies up its Internet Website, and relies upon the downloaded client, you have a good formula for an Express Exemption, so long as all the website does is offer the client for a download.

Finally, you again ignore the language in Section 5367 which only removes the express exemption if "unlawful" bets or wagers are involved. If poker is not unlawful, then the exemption through Section 5362(2) remains for whatever businesses are covered therein...... which you assume means poker. No bootstrap here Phil, this Act, however you want to torture it, does NOT make internet poker illegal.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
Also note the definition of a bet or wager. This will have an effect on the interpretation of the Wire Act by the courts ( as Stellar pointed out)

[/ QUOTE ]
I certainly did not intend to say that and I don't think it is true.

Do you really think sites \"control\" what players bet or wager ?
 

I don't get your drift, Phil. You "think operating the software that allows for betting comes right under this definition" of control. Pretty fatalist of you. Ever hear of free will ?

Does Mason "control" what you write in your posts because he offers the access to this forum ? Don't you control what words you spew forth ?

Maybe it is Microsoft which you think "controls" what you write because you are using a Windows operating system ?

Re: Do you really think sites \"control\" what players bet or wager ?
 

[ QUOTE ]
I don't get your drift, Phil. You "think operating the software that allows for betting comes right under this definition" of control. Pretty fatalist of you. Ever hear of free will ?

Does Mason "control" what you write in your posts because he offers the access to this forum ? Don't you control what words you spew forth ?

Maybe it is Microsoft which you think "controls" what you write because you are using a Windows operating system ?

[/ QUOTE ]

Valid points.

Re: Do you really think sites \"control\" what players bet or wager ?
 

[ QUOTE ]
I don't get your drift, Phil. You "think operating the software that allows for betting comes right under this definition" of control. Pretty fatalist of you. Ever hear of free will ?

Does Mason "control" what you write in your posts because he offers the access to this forum ? Don't you control what words you spew forth ?

Maybe it is Microsoft which you think "controls" what you write because you are using a Windows operating system ?

[/ QUOTE ]
Actually, I said far more than that. Thanks for quoting my position accurately and honestly.

So, by your own reasoning, sports books or online casino could claim exemption under "interactive computer services" and then claim they have no control over their punter's betting and wagering (because of free will, and all that [img]/images/graemlins/grin.gif[/img]). Perhaps you've found a loophole?

I'm writing a response to the rest of your (less ridiculous) points now.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
His analysis is accurate that playing internet poker appears to be clearly illegal in some States. However, the Act still does require that a site be engaged in the "business of betting or wagering" to fall within its Section 5363 purview. This is a similar issue to the Wire Act not covering "poker'. A potential prosecution would have to cover why the legislation mentions sportsbooks and casinos specifically, but not poker, and adopts a "business model" criteria for coverage which does not cover purely poker sites.

[/ QUOTE ]
If I were going to place an illegal wager I would lay odds against this theory holding up in court [img]/images/graemlins/wink.gif[/img]. But I'm not qualified to give a real legal opinion so I won't.

That said, the argument could still have an important practical effect. There is risk involved for the Government in prosecuting a pure poker site. Allowing a judge to interpret this law creates the possibility of something bad happening that would terribly embarrass everyone concerned. Once again we seem to be coming back to the idea that the early targets will be sports bookmakers. Poker may once again move to the back of the list.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
The Executive branch has repeatedly stated that the Wire Act covers poker and casino games as well as sports betting.

So far the courts have rejected this theory. Therein lies a big practical problem for those who wish to prosecute offshore poker sites. The judge might dismiss the case without even hearing the evidence and create a damning precedent in the process. Then the Government might find that they couldn't even intimidate anyone anymore.

Everyone says the new law didn't change the legal status of online poker but as a practical matter this is not true for the sites. Ineffectual state laws against online poker have been de facto converted into Federal felonies. State XYZ may have a completely neglected law saying that operating an online poker game is a misdemeanor punishable by a $1000 fine. Maybe the DA has real crimes to fight and wouldn't prosecute even if the case was gift-wrapped for him.

Doesn't matter. The Feds can still bring Federal charges carrying a 5-year sentence against the site if they offer service in this state. A real law the judge can't ignore. No more fretting over whether the Wire Act will stand up against poker in court.

I think this is a significant reason why some of the sites are reacting as they are.

[/ QUOTE ]

They are exposed to states decriminalizing it and rendering it obsolete if they prosecute in this manner, well, whether they do or not. Correct? Go North Dakota!!

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

Firstly, the term "business of betting or wagering" is not defined in the act, nor was it defined in the original Wire Act. However, I see no basis for why poker would not be included. Previously, courts have failed to include it solely on the language that states "contest of chance", which they struggled over, and eventually took strictly to refer to sports betting. See the text of those Wire Act rulings. The new language is "game subject to chance", a very important difference.

Even forgetting that, 5362(2) can easily be argued to apply to poker sites, it is very clear language. With regard to this, you asked:

[ QUOTE ]
Except, Phil .... Could you explain how a poker site is somehow involved in the EXEMPTION provided by Section 5362(2). I kind of thought that exemption only applied to financial institutions, interactive computer services, or telecomunications services.... which of these is a poker site?

[/ QUOTE ]
The relevant passage is:

(2) BUSINESS OF BETTING OR WAGERING- The term `business of betting or wagering' does not include the activities of a financial transaction provider, or any interactive computer service or telecommunications service.

A poker site is clearly covered by the definition of "interactive computer services" in the act, defined by section 230(f) of the (updated) Communications Act of 1934 (47 U.S.C. 230(f)), which states:

(2) INTERACTIVE COMPUTER SERVICE.--The term ''interactive
computer service'' means any information service, system, or access
software provider that provides or enables computer access by multiple
users to a computer server, including specifically a service or system that
provides access to the Internet and such systems operated or services
offered by libraries or educational institutions.

The case law deciding what is classified as an "Interactive Computer Service" is very broad, and the courts have repeatedly held that any organized system that "enables computer access by multiple users to a computer server" fits this definition.

Thus, the DOJ can nab you for providing an "interactive computer service", to which 5367 applies. I'm not sure what your point is here. This section was included specifically to stop ISPs and others from providing gaming services, and it can be equally applied to anyone using a server to allow "unlawful bets or wagers".

[ QUOTE ]
Section 5363 is the "prohibition"

[/ QUOTE ]
Yes, and comes into force if 5362(2) and 5367 applies.

[ QUOTE ]
...the language in Section 5367 which only removes the express exemption if "unlawful" bets or wagers are involved. If poker is not unlawful, then the exemption through Section 5362(2) remains for whatever businesses are covered therein...... which you assume means poker.

[/ QUOTE ]
I agree completely, and if you read what I said carefully, and I said as much. Perhaps my language wasn't clear.

I do suggest that this legislation will change the court's currently borderline (and nearly arbitrary) interpretation that the Wire Act doesn't apply to online poker. In previous judgements they have looked to the legislature for guidance, and finding none, have gone for an extremely strict interpretation of the exact language. But that is pure speculation on my part.

[ QUOTE ]
(I practiced law for almost 20 years, and have tried cases and argued statutory interpretations in appellate courts at the state and federal level, variously for the government, gaming clients, and other people facing regulatory issues, but I did NOT win every argument, so call me "incompetent" if it makes you feel better.)

[/ QUOTE ]
I do not have a law degree, but I can read plain text, and I do run my own (not internet related) business. I know for a fact that you have given misleading and reckless legal opinion to affiliates with no concern for the consequences, in order to get them to work for your site. I've linked it in your TruePoker thread. That concern for money over basic integrity is why I'm having a go at you.

The fact is that some of your arguments just don't stand up to scrutiny. Nor do they stand up to common sense. I challenge you to explain why the biggest sites (with excellent legal advice) have decided to cut 3/4 of their revenue by dropping US players, if this law has no effect on the legality of running a poker site.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
I challenge you to explain why the biggest sites (with excellent legal advice) have decided to cut 3/4 of their revenue by dropping US players, if this law has no effect on the legality of running a poker site.

[/ QUOTE ]

I'm sorry, but this argument is just fundamentally flawed. You have no way of knowing how "excellent" Party's legal advice is. For one thing big companies lose legal cases all the time. Big tabaco and many, many, many industries had "excellent legal advice" and misteped time and time again. MLB had "excellent legal advice" and lost to a small company called CDM over who owns baseball stats. Secondly, Party has made a lot of bad decisions throughout it's history, and we all know that. Thirdly, as a listed company, there are all kinds of reasons why Party might have pulled out. We don't know that the reasons are good, sound, or even based on the "excellent legal advice." It could be as simple as their founders not wanting to take a chance of getting arrested in the U.S., even if they thought most likely they could win their case. It could be not wanting to deal with potential investor issues down the road. Finally, I always hate the argument "A has smart lawyers and they're doing step B, so obviously step B is correct." MAke your own logical arguements, and don't just say "if Party is pulling out, pulling out is the correct legal thing to do." I always hate that line of argument, because it gives no possibility to a big corporation being wrong, when in fact they are wrong ALL the TIME, probably as much as they are right (in PArty's case).

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
Sites that continue to accept US players ARE BREAKING THE LAW. If someone says otherwise, they are a liar. The text you read above is the reason Party and others with actual lawyers on their staff have pulled out of the US market, and quickly.


[/ QUOTE ]
These sites are not breaking the law. They are foreign companies on foreign soil. What do United States laws have to do with them?

There are some Iranian laws that United States citizens break every day. As long as they are broken on US soil, what is the difference? Anyone ever read any books by Salmon Rushdie? You can be executed for that. There is zero chance that the US would extradite anyone to Iran for that crime, and the same zero chance that Costa Rica or Antigua will extradite someone to the US to face any charges.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

"sites" is a plural. More than Party have bailed.

To the best of my knowledge, the only ones that have explicitly stated they're staying are in legal havens (such as Costa Rica) where they can escape the reach of US law.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
These sites are not breaking the law. They are foreign companies on foreign soil. What do United States laws have to do with them?

[/ QUOTE ]
By accepting US customers, they break US law. However, some have claimed that operating a poker site does not break US law (TruePoker also claimed that being a US based affiliate for TruePoker does not break US law). It's these people that I'm responding to.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

This is a good, healthy discussion, and the type we need to have here in the forum. More importantly, we have people focusing on the text of the bill (sooon to be law), and basing their arguments directly on that text -- this as opposed to some sham article they read in CP, on an industry run website, or drawn from the imaginary fantasy land where evertyhing is fine that still resides in many players' minds.

On the substance, I'd only remark that for poker, that language regarding "games subject to chance" is going to be a problem. As the bill was drafted and various versions circulated, that section changed a few times as I understand it, and some revisions included a different phrase: "games of chance." The difference between that language and the language that made it into the final bill will be tricky to deal with if folks seek to distinguish poker from roulette as far as the law is concerned.

Also, on the discussion as to how 5362, 5363, and 5367 interact with one another and how each will be interpreted, I gather the Department of Justice will use the most expansive/aggressive interpretation it can justify and then step back from that if and when the courts force them to do so.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
Also, on the discussion as to how 5362, 5363, and 5367 interact with one another and how each will be interpreted, I gather the Department of Justice will use the most expansive/aggressive interpretation it can justify and then step back from that if and when the courts force them to do so.

[/ QUOTE ]

This is probably true.

The good news is that the banking regulations are going to be written by the Treasury Department and the Fed, which means they're likely to be the bare minimum consistent with the text of the legislation.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
[ QUOTE ]
Also, on the discussion as to how 5362, 5363, and 5367 interact with one another and how each will be interpreted, I gather the Department of Justice will use the most expansive/aggressive interpretation it can justify and then step back from that if and when the courts force them to do so.

[/ QUOTE ]

This is probably true.

The good news is that the banking regulations are going to be written by the Treasury Department and the Fed, which means they're likely to be the bare minimum consistent with the text of the legislation.

[/ QUOTE ]

Good point. Treasury and the Fed are notoriously business friendly, and I think the regulations will be ultimately written in a way that uses a light regulatory touch. Nonetheless, Stellarwind's point about the structure of the act provides a sufficient incentive for major cites to deny US players despite the fact that US players may end up with viable means to deposit (thanks to loose/light banking regs). From the standpoint of gaming opponents, they did a better job than most are giving credit for as far as structuring this legislation to achieve their ends.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

[ QUOTE ]
[ QUOTE ]
I challenge you to explain why the biggest sites (with excellent legal advice) have decided to cut 3/4 of their revenue by dropping US players, if this law has no effect on the legality of running a poker site.

[/ QUOTE ]

I'm sorry, but this argument is just fundamentally flawed. You have no way of knowing how "excellent" Party's legal advice is. For one thing big companies lose legal cases all the time. Big tabaco and many, many, many industries had "excellent legal advice" and misteped time and time again. MLB had "excellent legal advice" and lost to a small company called CDM over who owns baseball stats. Secondly, Party has made a lot of bad decisions throughout it's history, and we all know that. Thirdly, as a listed company, there are all kinds of reasons why Party might have pulled out. We don't know that the reasons are good, sound, or even based on the "excellent legal advice." It could be as simple as their founders not wanting to take a chance of getting arrested in the U.S., even if they thought most likely they could win their case. It could be not wanting to deal with potential investor issues down the road. Finally, I always hate the argument "A has smart lawyers and they're doing step B, so obviously step B is correct." MAke your own logical arguements, and don't just say "if Party is pulling out, pulling out is the correct legal thing to do." I always hate that line of argument, because it gives no possibility to a big corporation being wrong, when in fact they are wrong ALL the TIME, probably as much as they are right (in PArty's case).

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To add to an otherwise comprehensive set of reasons for Party pulling out:

1. Party is run by professional managers who have their future careers to think about, whereas most of the companies who have not yet announced a withdrawal (ignoring the sports guys) still have significant founder involvement. A founder with a significant shareholding may take some risks because the reward could be substantial; a manager with a small stake is a lot less likely to risk his liberty and future ability to get a job.

2. Party presumably has a board of directors that includes several independent non-execs, who are even less likely than the professional managers to want to risk their necks for the (usually) small stake that a non-exec gets.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

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On the substance, I'd only remark that for poker, that language regarding "games subject to chance" is going to be a problem. As the bill was drafted and various versions circulated, that section changed a few times as I understand it, and some revisions included a different phrase: "games of chance." The difference between that language and the language that made it into the final bill will be tricky to deal with if folks seek to distinguish poker from roulette as far as the law is concerned.


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Apologies if I sound ignorant, but now I'm confused ... if the UIGEA doesn't expand the definition of gambling but instead relies on the Wire Act and existing state laws, why is the definition of bet / wager in the UIGEA relevant? Surely all that matters is whether or not the Wire Act / state law applies (in which case it's the definitions therein that matter)?

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

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The good news is that the banking regulations are going to be written by the Treasury Department and the Fed, which means they're likely to be the bare minimum consistent with the text of the legislation.

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Good point. Treasury and the Fed are notoriously business friendly, and I think the regulations will be ultimately written in a way that uses a light regulatory touch.


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As a matter of interest ... while it may take around 100-200 days to draft the regulations, surely financial institutions will be given a reasonable time period in which to implement them? Anybody have any idea how long this will be?

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

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That said, the argument could still have an important practical effect. There is risk involved for the Government in prosecuting a pure poker site. Allowing a judge to interpret this law creates the possibility of something bad happening that would terribly embarrass everyone concerned. Once again we seem to be coming back to the idea that the early targets will be sports bookmakers. Poker may once again move to the back of the list.

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I think this is a very insightful and important point. I'd be shocked if the government went after the poker sites first because cases against poker-only sites would be much more complicated and riskier than cases against sports boomakers, and the government will (or at least should) be concerned about creating bad precedent. In law school they teach that "bad facts make bad law," and for the government a case against poker sites would involve bad facts.

Re: Few seem to have noticed how the new law \"fixes\" the Wire Act
 

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I think this is a very insightful and important point. I'd be shocked if the government went after the poker sites first because cases against poker-only sites would be much more complicated and riskier than cases against sports boomakers, and the government will (or at least should) be concerned about creating bad precedent. In law school they teach that "bad facts make bad law," and for the government a case against poker sites would involve bad facts.

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So basically a site like Stars could sit around and wait for other sites to lose, and then withdraw? (and the .gov presumably won't launch a new case if they've already stopped?)