Why I still play poker online (the legal reasons)

[kidpokeher]

I notice we're starting to see a lot of "online poker illegal?" threads creeping up. To answer these threads, I thought I would share some information I have found; not from some random message board poster or a gaming site, but from attorneys devoted to gaming law and even the U.S. courts.

First, the breakdown of UIGEA as interpreted by attorneys devoted to gaming law. If the feds kick down my door for donking off some chips online, I'm calling these guys:

http://www.firstamendment.com/breaki...the_UIGEA.html

Some excerpts:

The Wire Wager Act, or simply the “Wire Act,”[30] is most often cited as the basis for criminalizing online gambling operations. The Department of Justice has, in fact, successfully used this Statute to convict an individual of operating an online sports betting business established in Antigua.[31] However, the Wire Act has never been successfully applied to any form of gambling aside from sports betting. In fact, the United States Fifth Circuit Court of Appeal has concluded that the Wire Act does not apply to Internet casino gambling that does not involve sports betting.[32]

Read in its narrowest sense, the UIGEA may only apply to gambling transactions that are prohibited by a specific state’s law. The act of placing a bet online is not specifically prohibited by federal law.[43]

All state laws that seek to regulate global commerce such as Internet gambling may be unconstitutional under the “dormant” Commerce Clause of the United States Constitution.[44] Under this argument, state laws which regulate national (or international) commerce are unconstitutional, since such commercial activity should only be regulated at the federal level. The reasoning behind this legal principle relates to the need for efficient and uniform execution of commercial transactions over state lines. It would be unreasonable to require a merchant to anticipate and comply with a hodgepodge of inconsistent state laws when attempting to engage in commerce at the national level. For this reason, industries such as the railroads and airlines are generally only subject to national, as opposed to state, regulation.

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I thought the case referred to in footnote 32 was interesting in particular so I looked it up:

http://pub.bna.com/eclr/1321a.htm

Basically, the 5th Circuit Court of Appeals found MasterCard could not be held liable because their credit cards were being used to deposit to gaming sites. Some excerpts:

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However, even a summary glance at the recent legislative history of internet gambling legislation reinforces the Court's determination that internet gambling on a game of chance is not prohibited conduct under 18 U.S.C. §1084. Recent legislative attempts have sought to amend the Wire Act to encompass "contest[s] of chance or a future contingent event not under the control or influence of [the bettor]" while exempting from the reach of the statute data transmitted "for use in the new reporting of any activity, event or contest upon which bets or wagers are based.'" See S.474, 105th Congress (1997). Similar legislation was introduced the 106th Congress in the form of the "Internet Gambling Prohibition Act of 1999." See, S. 692, 106th Congress (1999). That act sought to amend Title 18 to prohibit the use of the internet to place a bet or wager upon "a contest of others, a sporting event, or a game of chance..."Id. ."Id. As to the legislative intent at the time the Wire Act was enacted, the House Judiciary Committed Chairman explained that "'this particular bill involves the transmission of wagers or bets and layoffs on horse racing and other sporting events." See 107 Cong. Rec. 16533 (Aug. 21, 1961). Comparing the face of the Wire Act and the history surrounding its enactment with the recently proposed legislation, it becomes more certain that the Wire Act's prohibition of gambling activities is restricted to the types of events enumerated in the statute, sporting events or contests. Plaintiffs' argument flies in the face of the clear wording of the Wire Act and is more appropriately directed to the legislative branch than this Court.

Plaintiffs fail to allege the identity of the games that they played, i.e. games of chance or sports related games. Pleading such matters is critical when their right to relief hinges upon the determination of whether Internet casino gambling is legal. That being said, the Court cannot simply assume that plaintiffs bet on sporting events or contests when they make no such allegation in their otherwise extremely thorough complaints.

The sole reference to "sports betting" is a conclusory allegation that the alleged enterprise engaged in sports betting. See Bradley petition at ¶ 88, Thompson petition at ¶ 77. However, nowhere does either plaintiff allege personal participation in sports gambling. Such an allegation is not enough to survive a motion to dismiss where there is no claim that plaintiffs themselves, or the defendants they have sued, participated in sports gambling. Since plaintiffs have failed to allege that they engaged in sports gambling, <u>and internet gambling in connection with activities other than sports betting is not illegal under federal law</u>, plaintiffs have no cause of action against the credit card companies or the banks under the Wire Act.5
Since the Court finds that the Wire Act does not prohibit internet casino gambling or defendants' association therewith, there can be no mail or wire fraud. Plaintiffs' fraud claims depend upon a finding that the gambling activities and debts were in violation of U.S, and state law and that the defendants therefore misrepresented the debts as legal, as explained in the previous sections. However, plaintiffs' attempt to advance this theory fails because the debts themselves are not illegal. Moreover, even if the debts were illegal, defendants' representations with respect to those debts do not provide a basis for a mail or wire fraud claim because "it is the general rule that fraud cannot be cannot be predicated upon misrepresentations of law." See Meacham v. Halley, 103 F.2d 967, 971 (5th Cir. 1939); see also Alien v. Westpoint-Pepperel, Inc., 945 F.2d 40 (2d Cir. 1991).

As far as violations of other federal laws are concerned, the finding that defendants' activities did not violate The Wire Act or other law moots any other federal cause of action. As defendants have not violated the Wire Act, Mail Fraud, Wire Fraud or applicable state statutes, defendants can have no liability under other federal laws. Therefore, the Court will dispose of these claims in a summary fashion.

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My opinion only for what it's worth (nothing) - If you bet on sports online you may be in trouble, but I don't know. Since I don't bet on sports, I'll let others argue the issue. If you live in a state that has declared online gambling illegal, you may be in violation of state law, but even that is presently a giant grey area of the UIGEA that the lawyers above feel may be ruled unconstitutional. Finally, the opinion of the courts as referenced above clearly states that "internet gambling in connection with activities other than sports betting is not illegal under federal law."

So there you go. Disclaimer: I'm not an attorney, consult your own, blah, blah...

[Skallagrim]

New around these parts, aint ya Kid?

Skallagrim

[MiltonFriedman]

Props to the OP for his writing about the Mastercard Litigation in a cogent, succinct manner.

There was not some GS-14 DOJ flunky writing the quoted opinion, it was the United States Court of Appeals for the 5th Circuit ... i.e. a Court one step below the US Supreme Court.

The Mastercard Litigation dismissal is clear... online gambling, other than sports betting is NOT illegal under the Wire Act or other federal statutes.

Recently, Senator Kyl opined that poker players should look to the Courts to get poker included as a "game of skill" under the UIGEA. At least at the federal law level, that is not needed. Online Poker is not illegal under federal law. Only a bootstrap violation of an applicable State law could arguably give rise to any claim of a UIGEA violation .... Let's see what the Regs say when they come out.

[Legislurker]

The only problem I have reading things like this is the hope it brings. Lol. Then, I get depressed because Im making a fraction of what I used to and I'm powerless waiting on something to happen.

[JPFisher55]

Problem is that a lot of the poker websites, especially Party Poker, and ewallets did not want to risk prosecution by the DOJ. So they left the US market. And the DOJ refuses to go after pure online poker sites or ewallets to set up a test case.
However, I think that unless the DOJ eventually goes after a pure online poker business, more poker only ewallets will be established and some online poker websites will reenter the US market.
Of course, other events could change the present situation.

[pokahcrazy8b]

The playing aspect is not illegal. It is the depositing aspect that is.

[RoundGuy]

[ QUOTE ]
The playing aspect is not illegal. It is the depositing aspect that is.

[/ QUOTE ]
You're a retard -- but I guess a higher authority already figured that out.

[Legislurker]

[ QUOTE ]
[ QUOTE ]
The playing aspect is not illegal. It is the depositing aspect that is.

[/ QUOTE ]
You're a retard -- but I guess a higher authority already figured that out.

[/ QUOTE ]

I don't think the UIGEA can criminalize anything pre-Regs? Is the law applicable now without them? I guess I should know this but Im having a brainless day.

[Skallagrim]

To answer your question legislurker:

There were 2 key components to the UIGEA. The first one made it a federal crime for anyone "in the business of betting or wagering" to accept money for "unlawful internet gambling." That provision, whatever it applies to, became law last October.

The law also says that while financial service providers are not included in the above provision, they must comply with the upcoming regs to avoid transfer of money to "unlawful internet gambling." One assumes that the licenses needed to be a financial service provider (at least in the US) would be pulled for failing to comply with the regs.

There was a 3rd component for Internet Service Providers to block sites, but almost everyone agrees that component is blatantly unconstitutional.

Skallagrim