Myths about UIGEA from "semi-pro"

[Wynton]

I didn't want to get drawn into this particular debate because I think that the vast majority of what Bill wrote is clearly correct; and what he was correct about was more important than where there is room for debate. Still, I'll address a couple of quick things:

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Admittedly, it does not matter in some states that expressly declare poker gambing and thus usually illegal (Washington for example), or in states that prohibit games with ANY chance (Tennesee) or in states that prohibit betting money even on skill games (Vermont is one).

So playing poker is legal in some states at least. And thus PLAYING poker on the interent is ALSO legal in those states.

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Last time I researched this, which was over a year ago, I came to the same basic conclusion. I did not count how many states used one particular test. It was enough for me to know that they used different tests, and that poker plainly qualified as gambling in many places. I do not think it is particularly fruitful for us to debate, here, which test prevails in most places.

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As to the regulation issue, while it is legal for states to outright prohibit any kind of gambling activity by its own citizens, it is not legal for them to require INTERSTATE/INTERNATIONAL online sites to be regulated in their state. This is so by the virtue of the Constitution's Commerce Clause which requires interstate commerce to be regulated only by the Feds.

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This is an oversimplification. The feds can preempt state regulation of interstate activity. But it does not follow that the states are prohibited - in the absence of such pre-emption - from any regulation of companies doing interstate business.

[Uglyowl]

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Well stated Skallagrim.

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Well done sir

[whangarei]

Some thoughts on a few of his myths, the rest seem pretty Ok to me (some stuff already stated):

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Myth: Democrats in office are good for online poker

Fact: Just because Republicans passed the UIGEA doesn’t mean that Democrats love gaming. Some of the biggest opponents to online gaming are powerful Democrats like Sen Dianne Feinstein of California ...

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Is this really a myth? Do people believe this? The takehome message is the Republicans and Frist in control in 2006 were very bad for online poker. Of course we have no way of knowing, but if the Dems had control last year I don't think Feinstein would have gotten the bill passed, since the Dems have no nanny state values agenda that they are beholden to.

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Myth: Poker is a game of skill

Fact: While the statement is sorta-kinda true most legal definitions of games of skill include the Dominant Factor test. Basically if luck predominates (e.g. 51% or more) in a contest then it is not a game of skill. As we all know, poker results are highly impacted by luck. I’ve been in hands as a 93% favorite and been sucked out on.

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As others have pointed out this is silly. I could beat Tiger Woods on a hole of golf too (assuming we played many holes). I am not a lwayer, but I don't see why courts would not view the long term in determining predominance, at least a long enough term that the recreational player sees.

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Myth: We have 270 days

Fact: The UIGEA went into effect the second President Bush signed it. The 270 days was for the Treasury to put together a plan (e.g. recommendations) for enforcing what was in it. And even then, the law said that the Treasury had to submit recommendations *within* 270 days.

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In terms of the banking regs I think it's been shown elsewhere on these forums that we have likely much longer than 270 days, with several stages of review/appeal, delays in implementation, etc. Of course aggressive prosecution may shorten U.S. online poker viability less than 270 days, but that is not really the "myth' Bill was attempting to debunk.

[Skallagrim]

" As to the regulation issue, while it is legal for states to outright prohibit any kind of gambling activity by its own citizens, it is not legal for them to require INTERSTATE/INTERNATIONAL online sites to be regulated in their state. This is so by the virtue of the Constitution's Commerce Clause which requires interstate commerce to be regulated only by the Feds.



This is an oversimplification. The feds can preempt state regulation of interstate activity. But it does not follow that the states are prohibited - in the absence of such pre-emption - from any regulation of companies doing interstate business. "

Not quite correct - Pre-emption is when the states have regulated in-state commerce and there are Federal regs covering the same subject. The analogy for my point is perhaps, interstate trucking - each state can say what weight limits, highway speed, etc, is allowed in the state. But OHIO cant require that a company based in Iowa get a Ohio license before transporting goods through Ohio. (And where federal regs cover things like amount of sleep a trucker must get, states cant make their own laws that differ - thats pre-emption).

[Wynton]

Skallagrim,

It is boring for most people to watch lawyers argue, so I don't want turn this into a debate about terms of art.

My point simply was that your earlier comment implied that the Commerce Clause absolutely prohibits states from regulating companies involved in the business of internet gambling, and I think that is, at best, misleading.

[Skallagrim]

True wynton, lets leave it at this: States can ban internet gambling, states can set laws about some gambling being illegal and other gambling not (like age limits or poker vs slots) but states cant, IMHO, say to an out of state site: you are illegal here simply because you havent registered with our gaming commssion - some states try to do exactly that.

[JPFisher55]

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True wynton, lets leave it at this: States can ban internet gambling, states can set laws about some gambling being illegal and other gambling not (like age limits or poker vs slots) but states cant, IMHO, say to an out of state site: you are illegal here simply because you havent registered with our gaming commssion - some states try to do exactly that.

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Read a line of federal cases known as the 'dormant commerce clause" cases. States can't tax and regulate ecommerce from outside their state without federal statute.

[Skallagrim]

JPFisher is absolutely right too - so to be clear, dont confuse "regulation" with "legality." If a state statute says online poker is illegal in this state - thats allowed even under the dormant commerce clause; conversly, if a state says only online poker thats licensed by our regulatory board (with all its rules) is legal, that violates the dormant commerce clause - its a small point but it does affect a few states (Nevada primarily).

[JPFisher55]

Skallagrim, I am not sure that a state can outlaw online poker except for the operation of poker website in the state.

[Skallagrim]

JP - I dont know of anything that stops a state from passing a law that says "its a crime to play poker on the internet." That is different from a law saying "if you play poker on the internet it must be at a site licensed by us or its illegal." If you have a theory about why they cant pass the first type of law LET ME KNOW! I respect your opinion.