Frank to introduce bill.....

[TheEngineer]

Permafrost,

My discussion on the fact that governments cannot give rights is primarily philosophical. Individuals ceded their rights to gamble to the states back in the 1600s. There's no question that states control gambling within their borders. I've commented on that several times.

The issue at question is the offering of Internet gambling across state lines. States can offer Internet gambling contained within their borders to their hearts' content (the DOJ may not concur, but it's unlikely they'd do anything about it were a state to move forward with it). However, it appears this gambling cannot cross borders, either state or national. This requires an act of Congress, just as the horses needed the IHRA of 1978.

Also, the ambiguity of current law is scaring off many banks and sites, especially as the DOJ persists with an extreme view of the scope of the Wire Act. And, the U.S. recently expressed its view that all offshore gambling is banned in the U.S. in withdrawing from the gambling sector of GATS.

This ambiguity really has to be clarified at the federal level, IMO.

[permafrost]

[ QUOTE ]
Permafrost,


The issue at question is the offering of Internet gambling across state lines. This requires an act of Congress, just as the horses needed the IHRA of 1978.


[/ QUOTE ]

If IHRA was passed before states had legalized racing and parimutuel betting, I would be surprised. But we agree, enabling laws would work. But first you have to have a few states make internet gambling (or poker) legal, then you talk to the Feds. Until you get a fair amount of states actively wanting Fed regulation, you have a hard time passing said regulation.

And the IHRA has no Fed Directors, Fed licensing, Fed taxes, etc.; but if they do, I hope someone corrects me.

[permafrost]

[ QUOTE ]
As for HR 4777, I can only read the text of the bill, and it makes playing a felony. Goodlatte has no love for us

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Here is a quote that contradicts you.

At a hearing last year about HR4777.

"Mr. GOODLATTE. Mr. Scott, if I might respond to that. We have
had this discussion before, and I certainly understand your point
of view. But the fact of the matter is—as Mr. Ohr indicates, we
have always at the Federal level focused on supporting the States
and targeted the entities offering gambling services. But virtually
every State has their own regulations regarding what individual bettors may or may not do. And so we are simply supporting their
efforts in that regard.
We don’t think there needs to be a Federal law in conjunction, in addition to the State laws that already target the individual bettors.
Mr. SCOTT. Okay."

Now, you need to find a quote backing up your Fed felony claim; or show me in HR4777 the part proposing making players into Fed felons.

[TheEngineer]

[ QUOTE ]
Now, you need to find a quote backing up your Fed felony claim; or show me in HR4777 the part proposing making players into Fed felons.

[/ QUOTE ]

Goodlatte has discussed federal penalties for players (in-state, regulated games would be fine, if such a thing ever exists). Here he is offering up a federal crime against players in SAFE H.R. 695 (1998):

http://findarticles.com/p/articles/m..._5/ai_20116821
[ QUOTE ]
The SAFE Act, H.R. 695, which would allow US manufacturers to freely export encryption products, sailed through the House Commerce Committee last September 25 on a 44 to six vote.

Stroud said the SAFE Act, which has 250 co-sponsors, should easily pass the Rules Committee, where 11 of the 13 committee members are co-sponsors.

The Internet gambling legislation would prohibit Internet gambling, Goodlatte said, and would "keep children from `borrowing' the family credit card, logging on to the family computer, and losing thousands of dollars all before their parents get home from work.

"Having a casino in one's home will only encourage gambling addicts and spark the interest of children," Goodlatte said. "It is time to shine a bright light on gambling in this country and bring a quick end to illegal gambling on the Internet."

The legislation also states that anyone convicted of running an Internet gambling business shall be liable for a substantial fine and up to four years in prison, and those who place bets with virtual casinos are liable under the legislation for a fine and up to six months in prison.


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Also, Washington state made playing a felony, so it's not unprecendented for our opponents to go after us like that. This was not repealed this year, so the state thinks this is okay.

[TheEngineer]

[ QUOTE ]
[ QUOTE ]
Permafrost,


The issue at question is the offering of Internet gambling across state lines. This requires an act of Congress, just as the horses needed the IHRA of 1978.


[/ QUOTE ]

If IHRA was passed before states had legalized racing and parimutuel betting, I would be surprised. But we agree, enabling laws would work. But first you have to have a few states make internet gambling (or poker) legal, then you talk to the Feds. Until you get a fair amount of states actively wanting Fed regulation, you have a hard time passing said regulation.

And the IHRA has no Fed Directors, Fed licensing, Fed taxes, etc.; but if they do, I hope someone corrects me.

[/ QUOTE ]

The issue here is that states could legalize it, but then they couldn't offer services outside their borders. So, North Dakota, for example, could legalize Internet gambling, but they may struggle to have enough players. This solution requires several states to legalize Internet gambling, then to develop sites within each state, then to lobby for an interstate compact with Congress. I do agree 100% we should be working toward legalization at the state level, in addition to anything else we're doing. States control gambling with their borders.

The benefit of federal legislation is that it establishes a legal framework. This would expedite the process.

Horses don't have the stuff you described, but they were already heavily regulated at the state level. Had states legalized Internet gambling by now, we'd be having a much different discussion.

[TheEngineer]

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That being said, I agree that gambling juristictionally belongs with the states (the DOJ doesn't, by the way...they believe the Wire Act covers intrastate gambling as well).

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The DOJ does not believe any such thing.

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Are you just here as a naysayer? Seriously, you think IGREA is a terrible bill that will screw us royally via a double-cross, yet you believe the DOJ, Goodlatte, and Kyl are on our side? WTF? I used to respect your contrarian opinion, but now I'm not so sure. I really don't get it. How many site operators does the DOJ have to arrest? How many threatening speeches to Goodlatte and Kyl have to give?

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I don't follow how my correcting your misinformation means that I think DOJ, etc. are on our side. Did I say Barney's boondoggle is a doublecross? No, it is upfront in it's attempt to control your gambling.

And I am not into needing your respect. Read and be enlightened, or not.

[/ QUOTE ]

What misinformation did you correct? I've corroborated everything I've stated as fact, and I've prefaced that which I didn't with "IMO".

I've shown that Goodlatte proposed making placing of interstate or international bets a federal crime. I've shown that the DOJ thinks the Wire Act covers all interstate gambling, including even the horses. I think we can all agree that, even without the Wire Act, interstate gambling between states that legalized it would likely require some federal involvement. As the Wire Act isn't going anywhere, the skill argument would probably have to go through the Supreme Court before the DOJ or the states would care, and they could still change their laws to cover that. We should definitely pursue this, of course, but we should be prepared for the victory with some sort of political support for our position, so we still have to write and call our congressmen (state and federal). After all, they'll be the ones needing a law, not us.

As for working with the states to legalize it at that level, we all agree, 100%. No one told Tuff Fish that CA wouldn't be allowed to offer in-state Internet poker. It's a given that they can. The issue is expanding beyond that. HR 4777 clearly intended to ban interstate gambling (its purpose is "To amend title 18, United States Code, to expand and modernize the prohibition against interstate gambling, and for other purposes."). If it gets reintroduced and passed, states will clearly not be permitted to legalize poker and offer it across state lines. Our "good offense" with IGREA is a great defense against this. As Goodlatte may be less likely to introduce a bill like HR 4777 next year (an election year), this may buy us time.

No matter what, the solution is a political one. We have to generate support at the federal and the state levels, no matter what, right? Supporting IGREA accomplishes the first goal. Writing in opposition to UIGEA does as well. Writing to newspapers and posting on blogs does, too. That's what we're talking about.

[permafrost]

[ QUOTE ]
[ QUOTE ]
Now, you need to find a quote backing up your Fed felony claim; or show me in HR4777 the part proposing making players into Fed felons.

[/ QUOTE ]

Goodlatte has discussed federal penalties for players (in-state, regulated games would be fine, if such a thing ever exists). Here he is offering up a federal crime against players in SAFE H.R. 695 (1998):

http://findarticles.com/p/articles/m..._5/ai_20116821
[ QUOTE ]
The SAFE Act, H.R. 695, which would allow US manufacturers to freely export encryption products, sailed through the House Commerce Committee last September 25 on a 44 to six vote.

Stroud said the SAFE Act, which has 250 co-sponsors, should easily pass the Rules Committee, where 11 of the 13 committee members are co-sponsors.

The Internet gambling legislation would prohibit Internet gambling, Goodlatte said, and would "keep children from `borrowing' the family credit card, logging on to the family computer, and losing thousands of dollars all before their parents get home from work.

"Having a casino in one's home will only encourage gambling addicts and spark the interest of children," Goodlatte said. "It is time to shine a bright light on gambling in this country and bring a quick end to illegal gambling on the Internet."

The legislation also states that anyone convicted of running an Internet gambling business shall be liable for a substantial fine and up to four years in prison, and those who place bets with virtual casinos are liable under the legislation for a fine and up to six months in prison.


[/ QUOTE ]

Also, Washington state made playing a felony, so it's not unprecendented for our opponents to go after us like that. This was not repealed this year, so the state thinks this is okay.

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Agreed, I saw a similar "up to six months" quote from 1997. That is not your "5 years in prison" Fed felony claim from HR4777.

Yes, it is not unprecedented for a state to use its police powers. This Washington felony (and a lot of anti-gambling laws elsewhere) is on the books and won't go away by talking to Washington DC. I really wish it were that simple. It is probable that other states will try to create player felonies and that needs opposition there, not Wash DC.

The state player felonies don't lead me to believe that the Feds have a player felony goal.

[TheEngineer]

[ QUOTE ]
Agreed, I saw a similar "up to six months" quote from 1997. That is not your "5 years in prison" Fed felony claim from HR4777.

Yes, it is not unprecedented for a state to use its police powers. This Washington felony (and a lot of anti-gambling laws elsewhere) is on the books and won't go away by talking to Washington DC. I really wish it were that simple. It is probable that other states will try to create player felonies and that needs opposition there, not Wash DC.

The state player felonies don't lead me to believe that the Feds have a player felony goal.

[/ QUOTE ]

A few of us were posting recollections we had about Goodlatte talking about making placing bets into federal crimes. To me, six months in prison (not jail, but "prison") and a fine is sucky enough that I think the point I was trying to make is still valid. Even if not, Goodlatte clearly tried to prohibit interstate gambling with HR 4777, which would have significantly hurt any plan that focused only on states (especially small ones), so it seems fair that we have to work on the federal and the state level here.

I'm not trying to be a dick, really. It just seems you keep poking holes in the federal approach without ever posting something like "please write to your governor or your state rep" at the end of it.

As for federal player felonies, who knows? You've provided some worst-case analyses of IGREA....it seems extrapolation of the DOJ's behavior in combating drug use shows precedent for this type of stuff. It doesn't mean it will happen, but it's not impossible or unprecedented.

Anyway, we all agree with you that we have issues at the state level. That's never been a question. Unfortunately, there's really no way for individual states to regulate or tax offshore Internet casinos, so there's little reason for them to invite them in. Something like IGREA could provide states with some level of comfort that the sites are licensed and regulated by the government. Licensing also opens the door to allow domestic sites to open. And, as it's opt-out rather than opt-in, the onus is on the states to reject it. Anyway, in recognition of our discussion and of the issues you presented, item #3 of this week's Action Items is to write to our state reps. We do need to get the ball rolling here, no doubt.

[permafrost]

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What misinformation did you correct?

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You said [ QUOTE ]
(the DOJ doesn't, by the way...they believe the Wire Act covers intrastate gambling as well).


[/ QUOTE ] That is not true. Perhaps you meant interstate. I thought my reference was clear but maybe not.

Good post,BTW. I do think that states can now legalize, license and regulate internet poker and still do that later under an unlikely expanded wire act. It was unclear if you meant an expanded wire act precluded that. They won't be able to offer it for interstate play without Fed enabling rules in any case.

[TheEngineer]

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That is not true. Perhaps you meant interstate. I thought my reference was clear but maybe not.

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I did mean intrastate, but I don't have a quote handy. I recall the DOJ had sent a warning to Nevada concerning the legality of some in-state remote gambling. I don't recall the details.

I wasn't trying to make much of this, as I mentioned that I didn't believe the DOJ would do anything even if they felt a state couldn't have in-state gambling. I always felt states controlled gambling within their borders, regardless of medium. Goodlatte has been consistent in stating he has no issues with in-state Internet gambling, and that his legislation would not preclude this.


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Good post,BTW.

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Thanks!

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I do think that states can now legalize, license and regulate internet poker and still do that later under an unlikely expanded wire act. It was unclear if you meant an expanded wire act precluded that. They won't be able to offer it for interstate play without Fed enabling rules in any case.

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I agree 99.9%. In fact....QFT.

Not sure about the "unlikely" part of the Wire Act expansion. Goodlatte gained traction last time. We should we wary of that, really. Before, these politicians didn't even know we existed. They're starting to hear from us now. Hopefully we'll all do our part and make it very unlikely.