Useful legal analogy re Internet versus other "legal" gambling

[Legislurker]

the $3 price tag comes with the risk of fund seizure/locking.
there is a trail to follow. And in the money laundering world, HU NL game with a 25/down seat charge is something a poker room would spread for you where you throw cash at each other in unlimited amounts, then just stuff it in your pocket.

[DeliciousBass]

[ QUOTE ]
You'd have to get creative to argue that online gambling is free speech, I think.

[/ QUOTE ]

Someone correct me if I'm wrong (I'm sure there is a correction to soon follow) but aren't corporations allowed to donate money to political candidates because the courts ruled that it was an expression of 'free speech' and protected by the constitution?

I would imagine that you could make the argument that how you spend your money is also a protected expression of free speech.

[davmcg]

[ QUOTE ]
As others have pointed out, it has nothing to do with free speech and everything to do with money laundering.

I would agree with the government's current contention that online gambling makes laundering money easier than B&M gambling -- especially poker. I mean, come on, there's no better or faster way I know of to pay someone a big chunk of money than in a HUNL game. It only costs $3 per $10,000.

The problem with the government's argument is that it is circular:

1. Online gaming isn't regulated.
2. Because online gaming isn't monitored by the government, it is more likely to be used for money laundering (duh...).
3. Ergo, unregulated online gaming should be illegal.

It's a Catch 22. If online gaming was regulated (and taxed, of course, to pay for its regulation), then the government could insist on controls and measures to be implemented that fight money laundering and various other forms of financial fraud.

With the debt this country is racking up, it's no doubt Congress is looking at the financial boon that awaits a legalized online gaming industry in the United States. But they have to wrestle with phooey like "morality" first.

Why they think this is their responsibility, I have no idea...

Legalize. Regulate. Tax. Monitor. Control. Just leave the issues of "morality" and "cultural welfare" out of it.

[/ QUOTE ]

I really wish that you people would read a bit about money laundering before spouting off.

The traditional definition of money laundering is the three stage process of placement, layering and integration. I say traditional because legislative changes (not sure what exactly maybe Patriot Act) meant that any cash transaction in relation to a crime automatically could also be money laundering, even though there was no attempt to hide the origin of the cash.

Placement, getting cash into the financial system, is by far the most difficult stage of the process and as online casinos don't handle cash they can't be utilised for this purpose. Clearly B&M can and offer a facility to move the cash into the financial system by cheque or bank transfer.

OK there is some argument that online poker could be of some use in the layering (multiple transactions to obscure original source) and integration (transaction(s) that present funds as legally acquired), but virtually any commercial transaction can be used for these purposes, many with far less transparency than fully recorded hands of poker.

[MiltonFriedman]

That anyone would believe that the motivation and intent of the UIGEA wa to prevent moneylaundering OR that, as such, it is justified in curbing US players' rights is sad.

As pointed out:

1. As online casinos don't handle cash they can't be utilised for moneylaundering, period. Western Union, Moneygram, et al take cash and send it overseas all day long. The argument that 'online poker could be of some use in the layering (multiple transactions to obscure original source) and integration (transaction(s) that present funds as legally acquired)" applies with equal force to ANY online auction or sales site or money transfer service.
2. REQUIRING that US players use their domestic banking facilities to deposit/cashout, rather than PROHIBITING that activity, would actually do more to combat any perceived potential moneylaundering, as the US banking system has Know-Your-Customer rules in place.

Online poker service providers would jump at the second idea.

Milton

[MiltonFriedman]

The case line you cite, I think is Buckley v. Valeo (sp?)and discusses corprations' right to political free speech, it tossed out a ban on "soft money" in campaigns.

[oldbookguy]

Let me say, I am just an ordinary man who looks at things in an ordinary way, a simplistic view of things you might say.

In looking at issues I look to common sense and applied reasoning.

This issue to me is really no different that eBay and cap guns. For instance, I am in West Virginia and I wish to sell an old Wyatt Earp cap gun on eBay. Trouble is this toy is old and not like modern toy cap guns that have those orange removable plugs in the end. Well, California law says ALL toy guns must have this, no matter the age carrying the federal Law that all new toy guns must have these orange caps.

Now, since eBay is located in California, no matter where I am, California law must be followed since the transaction takes place on eBay’s server located in California even if my buyer is in West Virginia and pays me in cash, I must still follow California law, no toy vintage gun auctions without that orange cap.

Now, poker sites servers are located not in California or even in the United States, therefore I must follow the laws governing where the server is located. Simplistic, yes, correct, no, the government now says the transaction takes place where I am located, not the server location.

The latter argument was successfully argued in International Internet gaming cases in the past.

Now, the UIGEA, if looked at closely seems to contradict this. How? It states transactions MUST be made AND received in the same state, with the operative word being received. Now however, the UIGEA passed by congress is in a sense acknowledges transactions are to be considered to be completed where they are received (must be made and received in the same state), contradicting the earlier cases in that the DoJ argued the transaction was considered made where the transaction was placed with no concern of where it was received.

Simplistic, yes, correct though? Perhaps lawyers can complicate this simplistic view and find us an answer.

obg

[MiltonFriedman]

Damaniac,

I happen to believe that the iMEGA lawsuit has no chance of success for a variety of reasons, especially standing and ripeness. However, hypothetically, the "speech" angle is a pretty good one.

I am not angling for a decision that regulation would be a per se violation, only that a ban is a violation when other forms of the activity are allowed.

How is Internet gambling distinguishable from interactive video games ... the fact that people bet on it ? That makes betting the evil. However, people also can bet on skill games all day, online and nationally. Plus, 48 of 50 States allow in-person gambling.

The express concern about sports betting and online casinos under the UIGE Act was NOT betting, but the use of credit and the financial services where such activity was ALREADY illegal.

The video games caselaw arguably undercuts application of the UIGEA in the 48 States where betting itself is not banned.

(FWIW, expect the iMEGA to add the argument in a supplemental brief to the Court.)

[oldbookguy]

[ QUOTE ]
How is Internet gambling distinguishable from interactive video games ... the fact that people bet on it ? That makes betting the evil. However, people also can bet on skill games all day, online and nationally.

[/ QUOTE ]


Milton, I really think this is our best shot at limiting the regulations or even IMEGA being successful.

I have had a few e-mails back and forth with them early on and at first they were not interested in the 'SKILL' gaming angle though I was told down the road they may look at it and add it as an argument as well. I think it would only be helpful if they do.

obg

[JPFisher55]

[ QUOTE ]
Let me say, I am just an ordinary man who looks at things in an ordinary way, a simplistic view of things you might say.

In looking at issues I look to common sense and applied reasoning.

This issue to me is really no different that eBay and cap guns. For instance, I am in West Virginia and I wish to sell an old Wyatt Earp cap gun on eBay. Trouble is this toy is old and not like modern toy cap guns that have those orange removable plugs in the end. Well, California law says ALL toy guns must have this, no matter the age carrying the federal Law that all new toy guns must have these orange caps.

Now, since eBay is located in California, no matter where I am, California law must be followed since the transaction takes place on eBay’s server located in California even if my buyer is in West Virginia and pays me in cash, I must still follow California law, no toy vintage gun auctions without that orange cap.

Now, poker sites servers are located not in California or even in the United States, therefore I must follow the laws governing where the server is located. Simplistic, yes, correct, no, the government now says the transaction takes place where I am located, not the server location.

The latter argument was successfully argued in International Internet gaming cases in the past.

Now, the UIGEA, if looked at closely seems to contradict this. How? It states transactions MUST be made AND received in the same state, with the operative word being received. Now however, the UIGEA passed by congress is in a sense acknowledges transactions are to be considered to be completed where they are received (must be made and received in the same state), contradicting the earlier cases in that the DoJ argued the transaction was considered made where the transaction was placed with no concern of where it was received.

Simplistic, yes, correct though? Perhaps lawyers can complicate this simplistic view and find us an answer.

obg

[/ QUOTE ]

If you read the pleadings at www.freejaycohen.com, you will find that Jay used this exact legal argument in his trial and appeal for violating the Wire Act. Both the trial court and the court of appeals ignored his argument bys stating that the rule that a bet originates, placed and received in the jurisdiction to which the money is transmitted only applies to tax and contract law; not criminal law.
It amazes me that the US judicial system comes up with such rulings when the politics demand it.

[oldbookguy]

[ QUOTE ]
If you read the pleadings at www.freejaycohen.com, you will find that Jay used this exact legal argument in his trial and appeal for violating the Wire Act. Both the trial court and the court of appeals ignored his argument bys stating that the rule that a bet originates, placed and received in the jurisdiction to which the money is transmitted only applies to tax and contract law; not criminal law.
It amazes me that the US judicial system comes up with such rulings when the politics demand it.

[/ QUOTE ]

Yes, I have read those arguments and reasoning by the courts. Now, however, it looks like the UIGEA passed by congress is actually making a distintion with the made AND received rule, that there is a difference perhaps now where as before the prevailing thought was as argued in the WSEX case ruling.

Could a good lawyer could successfully argue this point making moot the earlier rulings based on other law?

As a note the eBay cap gun rules are more recent than the WSEX case with this rule of local law in California being the guiding laws that control the sales there being only about 2 years old.

obg