Impending Regulations/Reality Check

[Sephus]

if the bank stops dealing with epass make a deposit to a poker site and request a paper check.

[Sephus]

[ QUOTE ]
can someone please explain to me, since i dont have vast knowledge in this subject, how PAPER CHECKS and things like Western Union and MONEYGRAM will be affected by the regs. because from what i have heard PAPER CHECKS are not addressed and the way the WESTERN UNIONS of the world operate, it seems near to impossible to trace....i kind of feel like the worst was over from 6-9 mos. ago when the likes of NETELLER and FIREPAY left the market.....like i said i am not the most knowledgeable on the subject but i really fervently feel the worst is behind us....

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nobody KNOWS. we will KNOW a lot MORE when the ACTUAL REGULATIONS come OUT.

[WichitaDM]

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can someone please explain to me, since i dont have vast knowledge in this subject, how PAPER CHECKS and things like Western Union and MONEYGRAM will be affected by the regs. because from what i have heard PAPER CHECKS are not addressed and the way the WESTERN UNIONS of the world operate, it seems near to impossible to trace....i kind of feel like the worst was over from 6-9 mos. ago when the likes of NETELLER and FIREPAY left the market.....like i said i am not the most knowledgeable on the subject but i really fervently feel the worst is behind us....

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nobody KNOWS. we will KNOW a lot MORE when the ACTUAL REGULATIONS come OUT.

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Well i think what he means is that paper checks were specifically excluded in the language of the original bill. that is as long as there is a us facing site, we at the very worst can still withdraw paper checks...

[oldbookguy]

We have a hint at what the regs may be and in a way the trouble drafting them.
This is a quote from the Federal Reserve Board Report to Congress earlier this year for 2006:
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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.

[/ QUOTE ]

It can be read in full on page 146-147 of the report @
http://www.federalreserve.gov/boardd...06/pdf/fro.pdf

Three things we have going for us:
1. Two federal courts have ruled casinos are not covered by the 1961 Wire Act
2. Only 11 states have specific Internet prohibitions
3. Since there is real debate and assorted rulings of skill v luck and 'Skill' sites are not covered by the UIGEA.

As Sen. Kyl put it in a press release concerning the Wexler / Frank bills 'If you want poker considered a game of skill (such as solitaire, hearts, spades, et al) go to court.....

The () is mine not his words but those games are considered 'Skill" and may be played online. See MSN, YAHOO! and AOL Games, Skill / Cash Compititions.

obg

[JPFisher55]

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JP, I think your last line regarding the scaring of the banks is my major concern. Could the regs conceivablely come out this week and specifically single out Epassporte since they are one of the main providors of funding for the Big 2 poker sites? Then in turn the banks might be scared from dealing with Epassporte and overnight not accept transfers from Epassporte or allow the usage of the Epassporte card at their ATM machines. Thus "trapping", if you will, my money at Epassporte. Remember overreation by Party Poker and Neteller was unexpected by most of the 2p2 community last year.

I know the easy answer is hey Redbeard if you are that worried just get your money off of there. But if I do that I'm basically down as far as poker playing goes for a while until I can get onto the sites. And that may be some time off as the regulations could conceiveable not come out for a month or more. (Though I trust Berge greatly and would tend to lean toward any comments he has had and those indicated last week that the regs could easily be out in the next week to ten days.)

[/ QUOTE ]

Actually Redbeard, you will have some time between when the regulations are issued for comment and when the official regulations become law.
Actually, I am less worried about regulations that specifically target online poker or Epassporte, etc. These regulations can be challenged in court as too broad under the UIGEA or the constitution. Also, specific regulations provide clear standing for those firms directly mentioned or affected.
It's the more general regulation like don't deal with any unlawful gambling site or unlawful ewallet. The term unlawful is undefined and might scare banks into not dealing with lawful firms like Epassporte because of the uncertainity over what is lawful. It is harder to challenge such a regulation. Because such general regulations do not specifically affect firms such as Epassporte, it makes it harder for such firms to show standing to challenge them. It is harder to challenge general regulations as too broad under the UIGEA or under the constitution because they are vague. They allow the DOJ to claim that the general regs mean something that they may not without providing an easy means to challenge them in court.

The present situation reflects this problem. The DOJ has targeted the online sportsbetting industry and ewallets, including Neteller, that serviced them. The DOJ states that all online gambling is unlawful despite clear case law that has ruled otherwise. Numerous online poker sites have still left the US market out of fear, despite the lack of any prosecutions against online poker, because of the DOJ statements and the UIGEA.

Right now, unless the DOJ actually prosecutes or threatens some firm in the online poker industry it is hard to challenge the UIGEA in court because it is hard to show standing. The general nature of the UIGEA is going to present standing, and other, problems for iMEGA in its litigation against Gonzalez et. al.

I think and hope that Epassporte will not be so easily intimidated unlike Party Poker etc. which were easily intimidated.

[Skallagrim]

I cant add much to what JP has said and I generally agree with his analysis. The regs will probably avoid the real issues (this is typical of government), and those issues will ultimately be the subject of court proceedings.

The real concern for players is just how much the banks and ACH processors will panic - I also dont see ePassporte panicking (they seem to be setting up their litigation strategy already) and expect we will see other "poker only" money transfer companies. There is too much money in online poker for NO ONE to take the court challenge (iMEGA notwithstanding, I just doubt they have procedurally got themselves in the right place - and they are not making poker specific arguments).

Skallagrim

[permafrost]

[ QUOTE ]
Actually, I am less worried about regulations that specifically target online poker or Epassporte, etc. These regulations can be challenged in court as too broad under the UIGEA or the constitution. Also, specific regulations provide clear standing for those firms directly mentioned or affected.
It's the more general regulation like don't deal with any unlawful gambling site

[/ QUOTE ]

Since UIGEA is about prohibiting funds going to unlawful gambling businesses, my speculation is that the regs will name a fairly large number of these businesses as ones that shouldn't be sent funds. You can't ask a financial business to block something and not give them names, etc. The list may even be state specific. There will likely be a lot of other things in the regs, but a list of unlawful businesses is highly possible.

It would pleasantly surprise me if no poker dealing sites make the list. I doubt financial companies will be named unless they are also running/owning unlawful gambling.

If this list is given, does it give an unlawful business standing for a court challenge of UIGEA; and what would that look like?

[Skallagrim]

Still depends on the specific regulations permafrost.

If the regulations tell my bank it is now "illegal" for them to send my money to ePassporte then both ePass and myself have standing to challenge those regulations in court (and I, for one, will definitely do so - online poker is NOT illegal under NH law in my professional legal opinion). Same is true for FTP.

The DOJ knows that, I believe, and therefore will not likely specify "banned" sites. Or maybe they will only specify sportsbetting sites (a great result for us). Or maybe they will exempt states like NH (though online casino games are possibly illegal in NH, offline certainly are...I have said before it gets complex). We shall see.

Skallagrim

[xxThe_Lebowskixx]

what about moneygram? where does this stand when the regs come out?

[JPFisher55]

I hope that the DOJ and FRS fall into the trap of naming specific firms, even games etc. If they don't name anyone that only deals with online poker then we have our de facto exemption. If they do name any firm in the online poker business, and not sportsbetting, then we have our definitive litigation.
Somehow I doubt that even the federal government and the Bush administration is that foolish. I fear that the regulations will always be right around the corner but never quite make it to publication or be so general that they do not change the status quo.