Online Gambling Is Illegal in the US
 

All the arguments over Federal legislation miss the point.

Gambling legislation is primarily the domain of the states, not the federal government. That's why you may be able to gamble in Las Vegas, but not in Omaha.

Even where gambling is legal - Las Vegas, for example - it's legal only to the extent it's specifically licensed by the state. Every casino on the strip has a license from Nevada. If it didn't have a license from Nevada, it wouldn't be legal to gamble there.

It's not any more legal for Party to offer games to Nevadans online, than it would be for Party to set itself up on the strip, without bothering to get a license from Nevada. The fact that Party has a license from Gibraltar (or wherever) makes not one gnat's ass worth of difference, as far as American law is concerned.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
It's not any more legal for Party to offer games to Nevadans online, than it would be for Party to set itself up on the strip, without bothering to get a license from Nevada. The fact that Party has a license from Gibraltar (or wherever) makes not one gnat's ass worth of difference, as far as American law is concerned.

[/ QUOTE ]

For the players, sure.
For the site, their location obviously helps.

Re: Online Gambling Is Illegal in the US
 

America doesn't rule the world though.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
Gambling legislation is primarily the domain of the states, ...


[/ QUOTE ]
True enough.

[ QUOTE ]
Even where gambling is legal - Las Vegas, for example - it's legal only to the extent it's specifically licensed by the state.

[/ QUOTE ]
I don't believe this is quite accurate. The state may outlaw all gambling by it's citizens, or some specific forms, or allow others only to be operated by licensees. Some states, for instance allow gambling at a home game, no license required.

If a state doesn't generally outlaw gambling by it's citizens, and it doesn't specifically outlaw online gambling by it's citizens, then online gambling may well be legal in that state, or it may be in a legal grey area where maybe an old law would be determined to apply in court, or maybe not.

[ QUOTE ]
It's not any more legal for Party to offer games to Nevadans online, than it would be for Party to set itself up on the strip, without bothering to get a license from Nevada.

[/ QUOTE ]
Unless Nevada has passed laws specifically outlawing offshore companies from offering games in cyberspace to Nevadans then it's unlikely that Party's operations offshore are specifically covered by existing law.

Nevada has outlawed online gambling by it's citizens, if I'm not mistaken, but whether they've outlawed Party's offer is another question. I do know that many states have not yet passed legislation specifically concerning online gambling.

Party is offering games from their servers offshore in a locale where it is perfectly legal to do so. That offer extends to US citizens, but the offer isn't occuring in the US. And Party does not host games in the US. So, a law saying you can't host games in Nevada doesn't really apply.

B.

Re: Online Gambling Is Illegal in the US
 

Well, give George Bush time, then we will rule the World!!!!!!!!

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
[ QUOTE ]
Gambling legislation is primarily the domain of the states, ...


[/ QUOTE ]
True enough.

[ QUOTE ]
Even where gambling is legal - Las Vegas, for example - it's legal only to the extent it's specifically licensed by the state.

[/ QUOTE ]
I don't believe this is quite accurate. The state may outlaw all gambling by it's citizens, or some specific forms, or allow others only to be operated by licensees. Some states, for instance allow gambling at a home game, no license required.

[/ QUOTE ]

That's true, but gambling at Party - or any online casino - is not a "home game."



[ QUOTE ]
If a state doesn't generally outlaw gambling by it's citizens, and it doesn't specifically outlaw online gambling by it's citizens, then online gambling may well be legal in that state, or it may be in a legal grey area where maybe an old law would be determined to apply in court, or maybe not.

[/ QUOTE ]

What state are you talking about?

If there's a state that doesn't generally prohibit gambling, please tell me which one it is.

[ QUOTE ]
[ QUOTE ]
It's not any more legal for Party to offer games to Nevadans online, than it would be for Party to set itself up on the strip, without bothering to get a license from Nevada.

[/ QUOTE ]
Unless Nevada has passed laws specifically outlawing offshore companies from offering games in cyberspace to Nevadans then it's unlikely that Party's operations offshore are specifically covered by existing law.

[/ QUOTE ]

I'm sorry, but this is a misconception.

What you're arguing is similar to saying that although stealing is against the law, it's legal as long as you do it online.

That's simply not the law.

Online gambling is a form of gambling. If gambling is prohibited, that prohibition applies to gambling on a computer.

[ QUOTE ]
Nevada has outlawed online gambling by it's citizens, if I'm not mistaken, but whether they've outlawed Party's offer is another question. I do know that many states have not yet passed legislation specifically concerning online gambling.

Party is offering games from their servers offshore in a locale where it is perfectly legal to do so. That offer extends to US citizens, but the offer isn't occuring in the US. And Party does not host games in the US. So, a law saying you can't host games in Nevada doesn't really apply.

B.

[/ QUOTE ]

Whether US law applies to Mr. Dikshit, in Gibraltar, is an interesting question, and one I don't know the answer to.

It does apply to US citizens, gambling in the US, even if they're doing it on their computers.

It's worth noting that online casino owners do not make trips to the US, and that at least one operator, who did make that mistake, was arrested, and went to jail. (And got a 2 year prison sentense, if I remember correctly.)

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
America doesn't rule the world though.

[/ QUOTE ]

http://img255.imageshack.us/img255/9738/orly4tm.jpg

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
What state are you talking about?

If there's a state that doesn't generally prohibit gambling, please tell me which one it is.

[/ QUOTE ]
For instance California, IINM, doesn't generally prohibit gambling, instead prohibiting gambling on specific games, and on 'percentage' games, etc ... .

The way most online sites take a percentage of the pot may make them illegal in California, but it seems that playing on WPX, rake free, may be legal in California. ?

http://www.gambling-law-us.com/Artic...california.htm

[ QUOTE ]
Online gambling is a form of gambling. If gambling is prohibited, that prohibition applies to gambling on a computer.

[/ QUOTE ]

I agree. After looking into it a bit more, an individual placing a bet online is almost certainly going to be considered to be placing it within the state he is located at the time of the bet.

The jurisdiction of the state over a website operator seems to depend on the extent which the site is interactive and targets the occupants of the state, and it seems that given the interactive nature of the sites, the states could probably claim jurisdiction. Enforcement, extradition, etc ..., are different matters.

Ben <-- gambling illegally in NC where it's a misdemeanor.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
All the arguments over Federal legislation miss the point.

Gambling legislation is primarily the domain of the states, not the federal government. That's why you may be able to gamble in Las Vegas, but not in Omaha.

Even where gambling is legal - Las Vegas, for example - it's legal only to the extent it's specifically licensed by the state. Every casino on the strip has a license from Nevada. If it didn't have a license from Nevada, it wouldn't be legal to gamble there.

It's not any more legal for Party to offer games to Nevadans online, than it would be for Party to set itself up on the strip, without bothering to get a license from Nevada. The fact that Party has a license from Gibraltar (or wherever) makes not one gnat's ass worth of difference, as far as American law is concerned.

[/ QUOTE ]

You know of all the posts on on line gambling, yours makes the most sense.
Alot of posters seem to make the mistake of claiming to gamble off-shore. As long as they sit infront of there computers, its not off shore.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
Gambling legislation is primarily the domain of the states, not the federal government.

[/ QUOTE ]
Your statement is true, but also misses the point. The reason the Federal Government CAN be involved is because this is more than just gambling. It's International Commerce, and therefore qualifies as International Trade. States can control gambling all they want, but they may not be enough to stop online gaming. Any Federal Law supercedes state law. The Federal Gov't could make online gaming illegal by making it a form of Illegal Trade. Actually, though, international courts have upheld the rights of us to participate in the "trade" of online gaming, and the US has chosen to neither appeal nor snub their nose at the Int. courts. Until they choose to do so, State Laws prohibiting online gambling are in a grey, and difficult to enforce area (as they may be superceded by Federal Trade laws, which are currently operating under the international court's decision that says we can participate in this type of trade.)

Hope that made sense.

Re: Online Gambling Is Illegal in the US
 

I've been thinking about this more. This thread opened my eyes a little bit on the issues involved.

On the one hand we have Federal regulation of online gaming. Currently that is pretty much non-existant. The Wire Act is the closest thing they've got, and that addresses the business of offering sports bets over telephone lines. They have busted one of the owners of WSEX online sports-book using this, IINM. But, it doesn't address the individual bettor, and it doesn't address offering/playing poker, again IINM.

Currently efforts are afoot to change that state of affairs and make clear federal restrictions on on offering online gambling, and on moving gambling money around. Hypocritically the changes will, in fact, allow intrastate online gambling.

State law, on the other hand, varies by state, but in most states it is probably already illegal for Party Poker to be offering raked games to you, and for you to play them. In NC, where I live, there is a general ban on gambling, Indian reservations and state lottery excepted, so when I place a bet online, or in a home game, I'm committing a misdemeanor. Operating a game for profit is a more serious offence, and the sites are probably violating those related laws by advertising to me, emailing, swapping money, and operating the games I play in NC. Enforcement is problematic, though.

Similar laws are probably in place in most states, which would make offering raked games to you in the state illegal. Some states allow raked games if properly licensed. I wonder how it would go if Party Poker offered California to buy a license, and they changed their rake scheme so that it's no longer a 'percentage game'.

I wonder if there are any states that make offering and operating raked games illegal, but playing in as a participant is not illegal? If that were the case, then the online player may not be breaking a law, while the operator is.

Some states allow unraked home games. Perhaps playing on WPEX, an unraked site, would be legal in these states?

Love to hear other's thoughts and any corrections. Also interested in what the law is in other states about playing in raked home games.

B.

Re: Online Gambling Is Illegal in the US
 

Texas gambling law:

[ QUOTE ]
§ 47.02. Gambling

(a) A person commits an offense if he:

(1) makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest;

(2) makes a bet on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate; or

(3) plays and bets for money or other thing of value at any game played with cards, dice, balls, or any other gambling device.

(b) It is a defense to prosecution under this section that:

(1) the actor engaged in gambling in a private place;

(2) no person received any economic benefit other than personal winnings; and

(3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.

[/ QUOTE ]

Violation of this section is a Class C misdemeanor, which carries a maximum $500 fine (no jail time). It's the equivalent of a traffic ticket. (Although, under Texas law, police are free to take you to jail and hold you to bail, even on a traffic ticket, if they want.)

If you were gambling at home, and there was no rake or other "economic benefit", you could raise that as a defense at your trial.


Interestingly, someone who promotes gambling, or "participates in the earnings of a gambling place," commits a Class A misdemeanor - which carries up to one year in jail, and up to a $4000 fine.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
[ QUOTE ]
(b) It is a defense to prosecution under this section that:

(1) the actor engaged in gambling in a private place;

(2) no person received any economic benefit other than personal winnings; and

(3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.

[/ QUOTE ]

If you were gambling at home, and there was no rake or other "economic benefit", you could raise that as a defense at your trial.


[/ QUOTE ]
So, it appears plausible that playing online poker at home at WPEX or other rakefree site is legal in Texas. That's cool.

Hmm. I've heard Austin is cool, maybe a change of scenery is needed. I'll have to look into other laws.

[ QUOTE ]
Interestingly, someone who promotes gambling, or "participates in the earnings of a gambling place," commits a Class A misdemeanor - which carries up to one year in jail, and up to a $4000 fine.

[/ QUOTE ]

Affiliates would surely fall under this, and I wonder if a DA wouldn't try to stick traditional rakeback under this law as well: those with rakeback are benefitting disproportionately from the business, as compared to those who don't have it?

B.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
All the arguments over Federal legislation miss the point.

Gambling legislation is primarily the domain of the states, not the federal government.

[/ QUOTE ]

Returning to your original quote, I think we can see that the Federal government enacting a prohibition on online interstate or intercountry gambling would, in fact, change the state of gambling law dramatically. While Texas law can be read to allow private online gambling on a rake-free site, the Feds would strip that priveledge from Texans.

The Goodelatt bill and other similar efforts to crack down on online gambling are, in fact, yet another power grab by the federal government. Whatever happened to states rights?

Existing state laws that prohibit gambling usually are not brought to bear against people gambling in the privacy of their homes. With rare exceptions, if you wanted to play poker with your friends, or bridge, or gin rummy, etc ..., then you were able to do so with no fear of prosecution.

The Feds intend to come into our homes and spy on our games. That is downright Orwellian!

Benjamin

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
[ QUOTE ]
What state are you talking about?

If there's a state that doesn't generally prohibit gambling, please tell me which one it is.

[/ QUOTE ]


[/ QUOTE ]

Colorado, as long as you don't charge a rake.

Re: Online Gambling Is Illegal in the US
 

Benjamin, the Goodelatte bill, to my understanding, is aimed at preventing banks from funding internet gambling. I don't think they're looking to start prosecuting individual gamblers.

Any state in the US could - if it wanted to - license an internet casino to offer gambling to people inside the state. One of the Dakotas (the cold one, if I remember right) was considering it, at least for a little while.

I don't thnk any foreign gambling operation would be interested in applying for such a license though. All of them are already offering games to Americans in all the states. Getting a license in one state would probably be counter-productive.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]

If there's a state that doesn't generally prohibit gambling, please tell me which one it is.

[/ QUOTE ]

NY does not generally prohibit gambling; it generally prohibits operating gambling establishments. Many states similarly make an explicit distinction between playing poker (which is fine) and running the game (which is not).

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
Affiliates would surely fall under this...

[/ QUOTE ]

I think it would be hard to make this stick. I believe the writers envisioned "promoters" pushing illegal gambling in their jurisdiction. How can they govern an internet site that markets to anyone on the globe with an internet connection?

If it got right down to the nitty gritty, affiliates could probably just have a terms of use that said "Online gambling is illegal in some areas. If you're in one of those areas, click here to exit this site immediately." So on and so forth...

That would put the liability then on the visitor, no?

Re: Online Gambling Is Illegal in the US
 

I'm the guy from WSEX who went to prison.

First, there is no federal law against placing a bet, online or otherwise.

I could write a book here but I just want to make a few points right now. In the early stages of my case, we found cases going back to the telegraph about "Where a bet takes place?" The courts in the early 20th century ruled that the bets took place where they were received. I will try and dig up the cases.

Moving forward to today. The Appellate Body of the WTO ruled that the US has made commitments to Antigua in the area of gambling services. The AB ruled that the US needs to allow Antiguan remote gaming companies access to consumers in the US market. They ruled that the application of Wire Act against Antiguan operations was in violation of the United States' commitments under the GATS.

For details see:

www.AntiguaWTO.com

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
I'm the guy from WSEX who went to prison.

[/ QUOTE ]
Hi JC,
Thanks for sharing what you've learned here. BTW thanks for the rakefree poker at WPEX!

[ QUOTE ]
First, there is no federal law against placing a bet, online or otherwise.

[/ QUOTE ]
Yeah, my state has laws against it, though.

[ QUOTE ]
I could write a book here but I just want to make a few points right now. In the early stages of my case, we found cases going back to the telegraph about "Where a bet takes place?" The courts in the early 20th century ruled that the bets took place where they were received. I will try and dig up the cases.

[/ QUOTE ]

This is interesting. It goes against common sense a little bit, though, don't you think? I mean, I'm sitting in my office in NC clicking 'bet'. It's hard to argue that I'm not betting in NC, IMO.

But the law doesn't always make common sense. The gambling law site I referenced earlier in the thread spoke as if the action were definitely occuring where both parties physically were.

Definitely interested in more information on the subject.

B.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
(b) It is a defense to prosecution under this section that:

(1) the actor engaged in gambling in a private place;

(2) no person received any economic benefit other than personal winnings; and

(3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.

[/ QUOTE ]

If you were gambling at home, and there was no rake or other "economic benefit", you could raise that as a defense at your trial.


[/ QUOTE ]
So, it appears plausible that playing online poker at home at WPEX or other rakefree site is legal in Texas. That's cool.

[/ QUOTE ]

I doubt a court would consider a commercial website like WSEX a "private place".

Re: Online Gambling Is Illegal in the US
 

I need to find the briefs but the court said something like this, it would be silly to think that a wager placed by telegraph with one of the gambling houses of London took place anywhere other than London.

As far as the underage stuff, I think in WSEX's 10 years in business, there have been less than 10 cases, maybe less than 5 of underage gambling. It's really not a widespread problem. If it's done on a credit card without permission, the card holder can dispute the charges and the cc company will automatically side with the card holder. I tend to believe that if a teenager gets ahold of their parent's credit card, there are many more stops they will make before online gambling.

I also think under the Republican theory of limited government and personal responsiblity, parents shouldn't depend on government to monitor their children. They need to take some responsibility.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
The gambling law site I referenced earlier in the thread spoke as if the action were definitely occuring where both parties physically were.

[/ QUOTE ]

Here's the article dealing directly with this issue. http://www.gambling-law-us.com/Artic...where-here.htm

B.

Re: Online Gambling Is Illegal in the US
 

That's pretty much the party line these days. I just think it is interesting that there was a time when that was not the way the courts saw things.

Today's courts tend to be very result oriented. Most, not all but most know where they want to go with a decision and reverse engineer things from there.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
I doubt a court would consider a commercial website like WSEX a "private place".

[/ QUOTE ]

But, the state court only has jurisdiction over the gambling/gambler because of their physical location within that state. Where is the bettor playing cards, physically? In his private office or spare bedroom.

If you try to say that he is playing in the public space of WPEX's website, then you run into problems with asserting any jurisdiction at all, because that website is in Antigua.

B.

Re: Online Gambling Is Illegal in the US
 

Hi, Mr. Cohen. Thanks for posting. (I'd forgotten you sometimes post here.) I'd imagine you know more about Federal law in regards to internet gambling than just about anyone. Personally I'd love to see you write a book.

FWIW, I do agree with you about the distinction between placing a bet (ie, being a consumer), and running a business. Federal law generally prohibits the latter.

It's worth it for folks to remember, though, that state law is just as much law as the federal variety - and that every state either prohibits gambling outright, or limits it to state-owned or state-licensed facilities. And no internet casino/sportbook/poker room has a license from any American state.

I'm honestly not trying to hurt your business (I'm assuming here you still own WSEX). Hell, I gamble everyday - and won one of your tournaments just the other night. It's my personal belief that the (legal) risks of gambling on the internet (as a player) are extraordinarily small - to the point of not being worth worrying about.

But I do think people should understand the legal status of what they're doing, if they're going to do it.




[ QUOTE ]
I'm the guy from WSEX who went to prison.

First, there is no federal law against placing a bet, online or otherwise.

I could write a book here but I just want to make a few points right now. In the early stages of my case, we found cases going back to the telegraph about "Where a bet takes place?" The courts in the early 20th century ruled that the bets took place where they were received. I will try and dig up the cases.

Moving forward to today. The Appellate Body of the WTO ruled that the US has made commitments to Antigua in the area of gambling services. The AB ruled that the US needs to allow Antiguan remote gaming companies access to consumers in the US market. They ruled that the application of Wire Act against Antiguan operations was in violation of the United States' commitments under the GATS.

For details see:

www.AntiguaWTO.com

[/ QUOTE ]

Re: Online Gambling Is Illegal in the US
 

WTO rules allow foreign-based companies to offer services that are legal in their jurisdictions to US residents (this is what the Antigua v US WTO case is all about). NONE of the Online poker companies are breaking US law because the services they offer do not take place in US territory.

If anyone is breaking the law it would be:

A) the US resident
B) the internet provider (if server based in US)
C) financial institutions (if US-based) dealing directly with an Internet Poker Site

Of course, there is no US federal law SPECIFICALLY prohibiting Internet gambling at the moment.

We live in a world of sovereign states. It should be beyond obvious that US law does not apply to business done outside the US.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
We live in a world of sovereign states. It should be beyond obvious that US law does not apply to business done outside the US.

[/ QUOTE ]
Ah, but that's the question. Where is the business done? At least part of the business is done in the US, in whichever state the customer is in.

The legal analysis I linked to earlier in the thread states that when an offshore business actively engages a customer in the state through advertising, email, exchanging funds, etc ... then the state has jurisdiction over that business. And the author cited cases to back it up. Enforcement is a different issue.

So, unless you can cite US state or federal case law to back up your position, I'm going to have to go with the guy that does cite it. That's my naive approach. [img]/images/graemlins/smile.gif[/img]

B.

Re: Online Gambling Is Illegal in the US
 

First, thank you for the rake-free poker JC!

Second,
[ QUOTE ]
Some states allow unraked home games. Perhaps playing on WPEX, an unraked site, would be legal in these states?

[/ QUOTE ]

In my state, Minnesota, sadly, rake-free or not, we are making a "bet or a wager" online, and that is against current state law.

However, unorganized home cash games are still hunky dory tho, so as long as we dont post or email folks about a "regular" cash homegame, then we are in the clear on that.

Re: Online Gambling Is Illegal in the US
 

All gambling operations that offer or accept illegal wagers to or from Americans within the borders of the US are breaking US law, and any services they provide to Americans inside America are in fact taking place within US territory.

Google "Jay Cohen" as a case in point.

Or, for that matter, "Manuel Noriega."

Not that I'm comparing Mr. Cohen to Noriega. I'm just pointing out, that as a matter of law - American law - you don't have to be living in the US, to be in violation of US law.


Edit: There are several Federal laws that prohibit internet gambling. Mr. Cohen was arrested, tried, and convicted because of (at least) one of them. If by "specifically," you mean they don't contain the word "internet," you're probably right. (For the most part, the internet wasn't even around when they were written.) But a law doesn't have to have the word "internet" in it to apply to the internet. If (for example) a law criminalizes "transmitting" illegal wagers, it doesn't matter how they're transmitted - whether by telephone, telegraph, or carrier pidgeon.

Re: Online Gambling Is Illegal in the US
 

The Wire Act only covers sportsbetting through telephone lines. It is quite specific in it's wording.

Mr Cohen's (entirely bogus) conviction was based on the fact that he was running a sports betting operation in Antigua and his customers were using telephone lines (remember the days of dial-up?) located in the US to place bets.

Re: Online Gambling Is Illegal in the US
 

[ QUOTE ]
The Wire Act only covers sportsbetting through telephone lines. It is quite specific in it's wording.



[/ QUOTE ]

Not quite. While it is true that the Wire Act in its plain language applies to only sports wagering, it does not specify telephone lines. It is actually very broadly worded (gr?) with the term "wire communications facility."

We did not argue at my trial that the internet did not at some point pass through a wire communications facility. It didn't pass the laugh test. I was charged with 8 counts in my case. Counts 3, 4, and 5 involved internet bets exclusively.

Moving forward to the present and the WTO matter, the Department of Justice takes the position that the Wire Act applies to ALL internet wagering, not just sports. How can they do this? Because they said so.

The 5th Circuit stated in a civil case that the Wire Act only applied to sports and not casino games. When the WTO lawyers brought this up in meetings with the DOJ, the DOJ's response was the DOJ was not involved in that case, the DOJ thinks the 5th Circuit is wrong, and therefore the DOJ is not bound by that federal appellate decision. I can't make this up.