Online Gambling Is Illegal in the US

[Benjamin]

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.

[LinusKS]

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.

[Benjamin]

[ 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.

[Benjamin]

[ 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

[acpawlek]

[ 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.

[LinusKS]

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.

[Wynton]

[ 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).

[coachkf]

[ 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?

[Jay Cohen]

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

[Benjamin]

[ 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.