Beyond UIGEA, regs, Kyl et al., etc.

[permafrost]

[ QUOTE ]
All of these represent a slow tightening of the screws, and there is no reason to assume that the regulations will simply rubber stamp the current halfway house arrangement. Here are some general insights that I here quite often from other people in the industry which may be of interest:

1. The regulations as published may be ineffective in wording, but the implementation of zero risk strategies by banks with any links to the US markets is a massive (if the the fundamental) concern. It would be infeasible for the gaming operators to end up relying on the few banks with no US presence (as it would make shutting the payment flow down simple).
2. The owners of some of the major sites do not have a limitless appetite for risk, and that appetite is directly proportional to business sustainability in other markets. I don't work for any of the big companies, but I think it is common knowledge that you will see Pokerstars leaving before the likes of FullTilt. The question is then what the implications of a cascade of new players will have on any remaining payment options at the remaining sites.
3. There are 'unknowns' in the UIGEA, specifically the site blocking provisions. Again, these are technologically impractical, but the reality remains that they don't have to operate perfectly to do huge damage. If you can knock out access to a site for even a day or so, you are going to put a lot of pressure on the owners and force a lot of casual players to ask questions.

I am therefore one of a large group of people in the industry who think the publication of the regulations will be the end of poker (as it currently exists).

[/ QUOTE ]

Nice summary. I think the site blocking aspect needs more discussion. I have read that it won't work. But being less than expert about "interactive computer services", I don't see why it wouldn't. Now you, an industry insider, admit it is diffucult, but possible. Other opinions, please?

[ QUOTE ]


I am also one of the people in the industry who thinks that once the bloodshed is over, a new dawn awaits. I have personally been working in a small team of specialists for the past six months on new products which specifically respond to the UIGEA. I expect that my company will have something available by early 2008, and I fully expect some other 'new poker' initiatives to appear by then as well.



[/ QUOTE ] For 3 or 4 months you have teased us with this; and now tell us it is 8 or 9 months away. Will the "new dawn" (are you in the marketing dept.?) ever quit awaiting? Will it be okay under all the other laws facing internet gambling businesses?

[permafrost]

[ QUOTE ]
the poker industry is NOT outlawed under Federal law.


[/ QUOTE ]
But the unlawful poker industry is outlawed under Federal law.

[ QUOTE ]
I also think you WILL see US Brand Name operators handling poker by early 2009.

[/ QUOTE ]
That is a great goal if you mean lawful internet poker sites dealing in some states. Tell us how we get there?

[permafrost]

[ QUOTE ]
Put another way, Internet Gambling is lawful

[/ QUOTE ]

Swell! Let's get a partnership together. Start some sites before the news gets out and the rush starts.

[MiltonFriedman]

Quote: "the poker industry is NOT outlawed under Federal law."

Your nonsense response ?

"But the unlawful poker industry is outlawed under Federal law. "

A perfect tautology, permafrost. This is like arguing with a four-year-old. There is no Federal law outlawing internet poker. It is bootstrapping nonsense to retort that Federal law does outlaw "unlawful poker"

What federal statute makes internet poker "unlawful" ? What Court case under what law supports that proposition ? Not the UIGE Act, not the Wire Act.

[MiltonFriedman]

You are a bit late..... ever hear of PStars, FTP, Absolute ? Newer sites like Cake are popping up all the time.

There is a market inefficiency created by the perception among the public capital markets that online poker is illegal in the United States.

I would suggest that private capital is not so constrained and has moved in to serve the perfectly lawful market for poker online in most states of the United States.

Keep beating the drum, permafrost, it drives the inefficiency that makes capitalists like FTP, PStars and Absolute money where Party fled.

[oldbookguy]

To answer your first quote I refer you to the FRB:
A quote from the 2006 report to congress from the FSRB; "The act generally
defines “unlawful Internet gambling” as
transmitting a bet by any means that
involves the use, at least in part, of the
Internet and 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.

To the second, well, the second is relevant to the first, there is no underlying Federal Law concerning Internet Casinos and only laws in 11 states prohibiting Internet Wagering Specifically (see skill gaming sites that follow the laws prohibiting this for the states).

Thus, if there is no Federal or state law specifically making it illegal, then it by default is legal.

obg

[Skallagrim]

MF and OBG are correct in their interpretations: If it aint explicitly illegal under a state law (unless its sports betting under the wire act) it aint illegal at the federal level and the UIGEA does not apply to the activity.

But what is illegal under state law? That question is a lawyer's dream because in most states the answer is NOT KNOWN. I have commented on this before and the difficulty it presents.

I comment again only because I want to point out that it is dangerous for OBG to say "only laws in 11 states prohibiting Internet Wagering Specifically (see skill gaming sites that follow the laws prohibiting this for the states)."

This 11 state bit is only one opinion on the law, not a statement of fact. I disagree with the 11 state list; some states on there shouldnt be, some state not on there should, IMHO.

I'll give one example: NY has no law whatsoever making it illegal to gamble. All its laws are against the providers of the games, including online providers. But if the online provider exists in Costa Rica, and the NY resident is violating no law when he bets from NY, how does that comport with the UIGEA (a UIGEA "illegal bet" is one thats illegal where its made or received - in NY the bet is made without violation of the law, and its accepted in CR without violation of CR law)? No one knows.

This is only one example, and its why the UIGEA is such a stupid law.

Skallagrim

[oldbookguy]

Thanks Skallagrim, I am relying on the 11 states as listed on the 'skills' sites, though I agree with you, some should be there that are not while others are that should not be.

Actually some skills sites list 14 states.

It really should read a minimum of 7 and up to 14 sates......

If memory serves correctly (too lazey to look at each state again) only 7 outright ban Internet wagering, while the other 4-7 are ambigious enough to warrent inclusion.

The REAL question will be in determing where poker will fit in after all is said and done which is why in my view the Wexler Skill Games bill best fits poker players needs.

Without this bill it will be a state by state fight unless a Federal Court were to rule (as suggested to poker players by Sen. Kyl) if we want a skill exemption.

obg

[TheEngineer]

I heard from a reliable source today that the UIGEA regs may be delayed for 2 to 3 months. Let's use this delay to intensify our lobbying.

[JPFisher55]

I am not sure if that is good news or bad news.