So, are online gamblers criminals now?
 

I get the sense from reading most of our resident experts' reaction to this bill that most think that there is nothing in it indicating that those who place wagers online could be subect to arrest.

I just finally read the whole section of the P-Security bill related to online gambling for the first time, and it seemed to me explicitly clear that the bill made placing a wager illegal in 5363 (even though stopping casinos from receiving wagers was clearly the bill's primary intent). 5366 suggests that anyone who violates 5363 is subject to criminal prosecution, with fines and/or up to 5 years' jail time. (Note: I am not a lawyer or legal professional of any sort)

I realize that many of us are confident that poker will be interpreted by the courts as a game of skill, and thus ultimately not be subject to this law, but does this mean that people depositing money online to play blackjack could actually face arrest? Maybe I'm not looking hard enough, but I really don't see anything in the bill or FAQ that suggests otherwise, while the FAQ and search feature on this board turns up a whole bunch of irrelevant threads when I look for discussion of the criminalization aspects of the law (and the few that mention it seem to be posters' "gut" interpretations of the law).

So, let's put poker aside for a second -- is depositing to a site to play some blackjack now a very risky proposition?

Re: So, are online gamblers criminals now?
 

Huh? Following is 5363 in its entirety. I don't understand how it could be read as making placing a wager illegal:

`` 5363. Prohibition on acceptance of any financial instrument for unlawful Internet gambling
``No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling--
``(1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card);
``(2) an electronic fund transfer, or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of such other person;
``(3) any check, draft, or similar instrument which is drawn by or on behalf of such other person and is drawn on or payable at or through any financial institution; or
``(4) the proceeds of any other form of financial transaction, as the Secretary and the Board of Governors of the Federal Reserve System may jointly prescribe by regulation, which involves a financial institution as a payor or financial intermediary on behalf of or for the benefit of such other person.

Re: So, are online gamblers criminals now?
 

Right. Here's the problem: Online gamblers are engaged "in the business of betting or wagering," agree? Maybe you don't. But if they are, then online gamblers may not accept "an electronic fund transfer, or funds transmitted by or through a money transmitting business; any check, draft, or similar instrument...;" seems to include any which way a casino would be paying out.

Are we all leaning on a belief that online gamblers will not be considered to be in the business of betting or wagering?

Re: So, are online gamblers criminals now?
 

Sorry, you are completely wrong with regards s5363. That section is entitled "Prohibition on acceptance of a financial instrument for unlawful Internet gambling".

It applies to persons "engaged in the business of betting or wagering" who wish to take financial transactions from customers as part of their business.

It doesnt apply to persons wishing to place bets. The legislation is clearly aimed at criminalising those running betting businesses online.

I find it an interesting piece because the prohibition of s5363 clearly cannot apply to non-US based business.

Therefore the further sections which refer to "restricted transctions" could be argued as not applicable to non-US based businesses. How can the US place a prohibition on a company which is outside its laws? It cannot do so. s5363 does not apply to companies outside US legal jurisdiction.

Re: So, are online gamblers criminals now?
 

[ QUOTE ]
Sorry, you are completely wrong with regards s5363. That section is entitled "Prohibition on acceptance of a financial instrument for unlawful Interbet gambling".

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No need to be sorry -- I'm not a lawyer, and I certainly hope I am reading it wrong.

Re: So, are online gamblers criminals now?
 

"I find an interesting piece because the prohibition of s5363 clearly cannot apply to non-US based business. '

Why would you think that ? What if the statute said "No one named Pablo Escobar can sell cocaine for improtation by US citizens ? Wouldn't Pablo be guilty of a crime under US law by doing so.... If not, tell that to Gen. Noreiga's lawyers.

Re: So, are online gamblers criminals now?
 

In fact the wording of the s5263 definition "engaged in the business of betting or wagering" could turn out to be vital.

There is a thread on here somewhere from a few weeks ago with the CEO of TruePoker. He was of the view that his company was not involved in the business of betting or wagering as they do not actually get involved in the bets or wagers, in contrast to an online casino where you are betting against the house.

I agree with him. The poker sites are acting only as a money holding agent between two parties who wish to place bets on the cards. The sites obviously need to be paid for this service and they take a rake. It is akin to an escrow service where a third party holds the money until the transaction (or in this case bet or wager) is complete.

Re: So, are online gamblers criminals now?
 

[ QUOTE ]
In fact the wording of the s5263 definition "engaged in the business of betting or wagering" could turn out to be vital.

There is a thread on here somewhere from a few weeks ago with the CEO of TruePoker. He was of the view that his company was not involved in the business of betting or wagering as they do not actually get involved in the bets or wagers, in contrast to an online casino where you are betting against the house.

I agree with him. The poker sites are acting only as a money holding agent between two parties who wish to place bets on the cards. The sites obviously need to be paid for this service and they take a rake. It is akin to an escrow service where a third party holds the money until the transaction (or in this case bet or wager) is complete.

[/ QUOTE ]

Fair enough, and you're probably right IMO, but my question was about online gambling, putting aside the question of poker.

Re: So, are online gamblers criminals now?
 

[ QUOTE ]
Online gamblers are engaged "in the business of betting or wagering," agree? Maybe you don't.

[/ QUOTE ]I don't. Both in this instance and in other places in the Act in which the phrase is used (e.g., 5362(1)(D)) it denotes an online site.

I have noted elsewhere ( Does the UIGEA apply to poker-only sites?) that the definition of "bet or wager" makes poker-only sites not subject to 5363, but it is easy to imagine a court hand-waving that objection away.

Re: So, are online gamblers criminals now?
 

OK Milton - let me give you an example. Lets say I run a business in the UK legally selling X (insert any other legal commodity of your choice). The USA decides it doesnt like X and wants to ban it by placing a prohibition on businesses accepting money or financial instruments in exchange for X.

Does that mean that I, running a legal business in the UK, have to stop selling X in and from the UK? No - of course it doesnt. The law simply wouldnt apply to me. USA laws have no jurisdiction over businesses based elsewhere. Very simple.

If they wanted to ban online gambling they simply could have worded the legislation to say that financial tranactions to "all or any" gaming/gambling sites are prohibited. The fact is that they havent done this.

They have tried to define a "restricted" transaction as one where the recipient is prohibited as accepting under s5363.

Now - from my argument above - s5363 cannot and does not apply to non-US based businesses, therefore no transactions are actually restricted by this law to non-US based businesses.

Its wierd but true - this law does not do what it is set out to do because of poor wording and definition.

And yes - I am a lawyer.