Useful legal analogy re Internet versus other "legal" gambling

[erac22]

if the issue is money laundering, why not just stop all money transfers on sites? How could money be laundered if the only option was to send money from your bank account, to your online gamlbing account, then back to your bank account? The site I play on doesn't allow transfers, and I have no problem with this. It actually makes it more hacker proof and more secure. Surely this would solve the laundering problem, wouldn't it?

**I guess people could chip dump, but it seems that sites have software detection abilities to prevent this?

[yahboohoo]

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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.

[/ QUOTE ]
The fact is that NETeller and online gaming sites made it very easy for large sums of money to be transferred (once or many times) without the U.S. knowing about it. This could be (I repeat: COULD be) utilized by criminals, terrorists, or just average folks who want a "second economy" free of taxes. All these could be construed as attempts to "conceal the identity, source, and/or destination of money" -- or, in other words, money laundering.

When Uncle Sam sees large volumes of money going in one direction (online gaming) and can't figure out who is getting how much on the back end, it makes them very nervous.

[MiltonFriedman]

Look for iMEGA to add this week's video games analogy argument in a supplemental brief. I do not know if they plan to add a skill games example, which they should as this is a federal level case.

(However, I still feel iMEGA has fatal flaws in their positions and doubt these substantive arguments will be reached. They have never addressed the standing issues adequately and will not be able to show irreparable injury.)

[MiltonFriedman]

iMEGA email release today:

"Since the announcement of our date in court (Sept. 4th, in Trenton NJ), from a media standpoint, things seem very quiet for iMEGA. They are not, however, and I wanted to bring you up to speed on some of the inside work iMEGA has been engaged in.

Legal

-We've received no shortage of support (and advice) from interested parties in the legal community. While most of this is rhetorical (and, at times, editorial), we've consulted with a number of very good attorneys to help beef up the substance behind our challenge. Most of our consultation have been gratis, so we've been able to hold our legal bills more or less constant for the time being, while enjoying the benefit of some otherwise very expensive counsel.
...

-The defendants (US DoJ, the FTC and the Fed Reserve) have yet to respond to our brief. Only the Fed has publicly acknowledged being a defendant in our suit ...


-We're crafting a "leave-behind" document for visits with members on the Hill, in part to address the very-public letter-writing campaign this week by Focus on the Family, and their affiliated groups. These address their baseless statements and scare tactics (such as the "iGaming is a front for terrorism" saw). Given the expert testimony we have to back this up, it will be a very compelling counter to FotF's efforts.

...

But, let's be clear: everyone is waiting to see how things start to play out as of Sept. 4th. Other parties will sit on the fence until they are sure this is a worthy challenge, so it's up to our Legal Team to make that happen in court. They know this, and they are continuing to build the case, especially given recent decisions they feel strengthen and broaden their arguments versus UIGEA (example: US District Court Judge Whyte's overturning of the California Video Game law).

...

[Legislurker]

That email alone is more communication than we have had from the PPA in 18 months. I am willing to move them up from joke status to longshot status. I guess I can give them $100 or something.

[oldbookguy]

I still do not see a first Amendment case in the UIGEA, poker is not banned from being played, in-fact it states it may.

It is a commerce issue, it may not be played for real money, that is what it seeks to ban.

Since UIGEA states federal and state laws banning unlawful internet gambling and there is no federal law (see MC wire act case) it would have to ban poker Internationally relying on state laws.

So, the question, I believe, should be framed; Do states have the legal authority to regulate or ban International commerce?

If that argument can be won (NO), then even the few states that have laws against Internet Wagering will be restricted to banning that activity within their borders and since there are no Poker Sites with the borders of a state and no transaction will be received within that border.....

obg

[JPFisher55]

[ QUOTE ]

(However, I still feel iMEGA has fatal flaws in their positions and doubt these substantive arguments will be reached. They have never addressed the standing issues adequately and will not be able to show irreparable injury.)

[/ QUOTE ]

I agree about the standing issue and the irreparable harm. But I don't think that winning the TRO (or preliminary injunction) is that important to the iMEGA case. Actually, if regs are issued, then the iMEGA might gain standing.
I guess their legal stratedgy confuses me. Why not wait until the regs come out and then sue.

[MiltonFriedman]

I agree about a Commerce Clause argument, which is combined with a 1st Amendment argument in the ACLU v. Gonzales Child Porn Act permanent injuction cases. It never hurts to have a First Amendment argument to add to the Commerce Clause reasoning. Remember, a injunction involves an equitable judgement by the Court. It is much stonger to be able to say, I want to exercise my First Amendment rights (in commerce) than to say I want to sell yellow margarine in Wisconsin or ship goods via truck through Missouri.

Yes, the real argument is commerce clause based, and a "dormant" commerce clause at that, but adding free speech bolsters its equitable appeal.

[MiltonFriedman]

Ironically, I think they are going to lose, with or without more money. They need help, in the form of real plaintiffs with real injuries to real lawful activity, more than they need more money.

[oldbookguy]

Agreed, they need Internet Players themselves as part of the suit.

It would help the case of they were to begin signing up players and seek perhaps class action status?

obg