how this Act arguably expands state laws

[Wynton]

The more I think about it, the more I realize that there is a lot of understandable confusion about how our new law is supposedly premised upon existing state laws. Here's my modest attempt at clarification.

First, here are two assumptions, which I think are all valid:

(1) Most states have NO laws directly addressing internet gambling.
(2) Most states have laws directly prohibiting running a gambling establishment (including a poker room) (and the remainder have laws regulating it strictly).

With that background, consider the legislative history. Simply put - as I mentioned elsewhere - the legislators differed whether internet gambling was already illegal under the Wire Act (a position hotly disputed by most scholars). Still, the history is replete with comments from legislators that internet gambling is already illegal under either the Wire Act or state laws.

How can the legislators so easily say that state laws already ban internet gambling? The reason, I think, is because they have intentionally blurred the line between internet gambling and ALL traditional gambling. And they have done so for rhetorical purposes.

In other words, it is easier for Congress to assume the pretense of states-rights advocate if they assert that they are merely giving teeth to already-existing state laws.

Logically, there is merit to that claim, though it is somewhat misleading. To the extent that a state outlaws gambling, one can plausibly argue that extending that prohibition to the internet helps protect that state ban; for the internet prohibition will further a general state policy against its citizens gambling (or its citizens running a gambling operation). On the other hand, the sloppiness of that kind of argument overlooks the fact that the general state laws against gambling never contemplated the existence of the internet. Moreover, it is simply disingenuous to pretend that a federal law that adds an internet prohibition does not materially change a state law that merely addresses brick and mortar gambling.

Now consider the the language Congress has actually adopted. The statute defines "unlawful internet gambling" as follows:

"to place, receive or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet, where such bet or wager is unlawful under any applicable Federal or State law in the State or tribal lands in which the bet or wager is initiated, received or otherwise made."

This may seem clear to you, but to my lawyer-eyes it's got ambiguity all over it. Does this language mean that there must be an already-existing federal or state law that has made INTERNET BETS illegal, or just that there must be an already-existing law that makes the GAMBLING BETS in general illegal. Moreover, does the law presuppose already existing laws that outlaw the placing of the bet (by the player) or the receipt of the bet (by the gambling establishment).

In practice, I believe that the feds will claim that this definition of unlawful internet gambling refers to state laws that ban the operation of gambling businesses generally, and NOT merely state laws that ban internet gambling operations specifically. And the reason I think they will make this claim is largely because few states address internet gambling at all.

All of this is premised, of course, upon my assumption that most states do not have laws directly addressing internet gambling.

Let me know if any of this makes sense (or is coherent).

[benfranklin]

[ QUOTE ]

Simply put - as I mentioned elsewhere - the legislators differed whether internet gambling was already illegal under the Wire Act (a position hotly disputed by most scholars). Still, the history is replete with comments from legislators that internet gambling is already illegal under either the Wire Act or state laws.



[/ QUOTE ]

The bill does not address what is illegal and what is not. It does not change the legality of anything. It addresses the enforcement of laws already in place.

There is little or no dispute that the Wire Act makes sports betting over the internet illegal. The recent arrests of foreign company officers in this country involved off-shore sports books.

It is certainly illegal to operate an online poker site in the US. It is very much in dispute whether international online poker is illegal.




[ QUOTE ]
Does this language mean that there must be an already-existing federal or state law that has made INTERNET BETS illegal, or just that there must be an already-existing law that makes the GAMBLING BETS in general illegal. Moreover, does the law presuppose already existing laws that outlaw the placing of the bet (by the player) or the receipt of the bet (by the gambling establishment).

[/ QUOTE ]

The title of the bill is the Unlawful Internet Gambling Enforcement Act of 2006. Its sole purpose is to increase the power of government to enforce existing laws against unlawful internet gambling. As to the states, it says that if intrastate internet gambling is not unlawful in a given state, then this law does not apply to bank transfers made for that purpose.

Currently, any state can authorize internet gambling, as long as the online casino and the customers are all physically located in that state. This bill does nothing to change that.

[JPFisher55]

Wynton, I agree with you on this one. I have researched the laws of Missouri and cannot find any law that bans gambling on the Internet. Yet, several sources say it is illegal in Missouri.
This and other issues leads me to conclude that there will be alot of litigation over this law. But it does expose operators of offshore internet gambling sites to federal prosecution if they visit the US. The federal government might lose, but this law enhances the threat and its related costs.

[TruePoker CEO]

"Does this language mean that there must be an already-existing federal or state law that has made INTERNET BETS illegal .... ?"

Yes.

Many states, around 41, do not have such an Internet law. Many States' gaming laws are tied to forbiding whatever gambling operation or activity is prohibited phyisical location, or "establishment" within the State.

Rather han respect States' Rights, Congress has attempted to limit them. A State could allow players to play on the Internet expressly, but Congress had attemtped to qualify any such effort. So, the best States Rights level response should be to pass a generally permissive poker law ... DOJ would be hard pressed to argue that the law is void, because in the absence of a law an activity is permitted. (There is no common law criminal law, except maybe for Louisiana. Criminal law is statutory.)

[TruePoker CEO]

The Act relates only to State laws with an Internet element, is one of construction at two levels;

1. UIGE says expressly it is not 'altering, limiting, or extending any ... State law ... prohibiting, permitting or regulating gambling within the United States."

This would mean the UIGE Act was not writing an "Internet prohibition" into an existing State law where one did not exist. Any other reading would "alter or extend" a State's laws. There is no common law criminalizing playing poker.

2. At the State level, some laws are on the books which expressly prohibit players from gambling on the Internet. Most States, 41 or so, do not have such Internet specific laws. In those States, generally, prohibitons or regulations of gambling are specifically tied to locations, establishments, buildings, or activity "within" the State.

Interestingly, if a State expressly allowed for Internet poker to be played, then that clearly would suffice to overcome this Act with respect to that State's residents. ... In the absence of an express prohibition however, players arguably could not violate a State "common law" because there is none.... (Check your State law if you are worried.)

[benfranklin]

[ QUOTE ]


Rather han respect States' Rights, Congress has attempted to limit them. A State could allow players to play on the Internet expressly, but Congress had attemtped to qualify any such effort.

[/ QUOTE ]

A state can allow its residents to play on the internet at a site that is located in that state. This bill does not change that. No state can allow its residents to do anything that is contrary to federal law. The courts have clearly ruled that interstate or international sports betting is illegal.

Nevada can, and always could, legalize internet sports betting at Nevada casinos by Nevada residents. It cannot legalize internet sports betting at Nevada casinos by California residents, or by residents of other countries. This bill does not change that.

This bill does not change the legality of any activity, and does not affect the ability of a state to allow or prohibit any activity. The bill specifically says that it does not apply to any legal intrastate activity.

While there is no doubt that interstate and international internet sports betting is illegal, it is highly questionable as to whether or not internet poker is covered by the same law. This bill does not address that issue either. It simply provides additional enforcement power against illegal internet activities. It does not say specifically that those activities are. Some, including Party, are interpreting that definition of illegal activities to include poker. Many do not make that assumption. In either case, it is beyond the scope of this bill.

[benfranklin]

[ QUOTE ]

Interestingly, if a State expressly allowed for Internet poker to be played, then that clearly would suffice to overcome this Act with respect to that State's residents. ...

[/ QUOTE ]

Only if the site is located in that state, and only if the site blocked access to non-residents, domestic and foreign. All of the above assumes that interstate online poker is illegal, which is highly questionable.

Internet sports betting certainly is illegal, but a state could allow its residents to bet at a site in the state, if that site blocked non-residents.

[John21]

Nevada's Law:

NRS 465.093 Placing, sending, transmitting or relaying wagers to another person prohibited under certain circumstances; penalty.

1. Except as otherwise provided in NRS 465.094 (this deals with race and sports books), a person, alone or with others, shall not knowingly:

(a) From within this state, place, send, transmit or relay through a medium of communication a wager to another person or an establishment that is located within or outside of this state; or

(b) From outside of this state, place, send, transmit or relay through a medium of communication a wager to another person or an establishment that is located within this state.

2. A person who violates the provisions of this section is guilty of a misdemeanor

The question I have is sending funds to a site wagering?

[TruePoker CEO]

"All of the above assumes that interstate online poker is illegal, which is highly questionable.'

You are preaching to the choir.

[benfranklin]

[ QUOTE ]
"All of the above assumes that interstate online poker is illegal, which is highly questionable.'

You are preaching to the choir.

[/ QUOTE ]

No, I am reporting events in the real world. US courts have affirmed that the Wire Act applies to sports betting. No court has ever ruled that it applies to other forms of gambling.

The recent highly publicized arrests of foreign operators involved off-shore sports books. I am not aware of any operators of non-sports online sites being prosecuted. Many in the legislative and executive branches of government have expressed opinions that poker is illegal under currently law, but none have yet tried to enforce such applications of the law.