Online Gambling Is Illegal in the US

[Xhad]

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(b) It is a defense to prosecution under this section that:

(1) the actor engaged in gambling in a private place;

(2) no person received any economic benefit other than personal winnings; and

(3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.

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If you were gambling at home, and there was no rake or other "economic benefit", you could raise that as a defense at your trial.


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So, it appears plausible that playing online poker at home at WPEX or other rakefree site is legal in Texas. That's cool.

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I doubt a court would consider a commercial website like WSEX a "private place".

[Jay Cohen]

I need to find the briefs but the court said something like this, it would be silly to think that a wager placed by telegraph with one of the gambling houses of London took place anywhere other than London.

As far as the underage stuff, I think in WSEX's 10 years in business, there have been less than 10 cases, maybe less than 5 of underage gambling. It's really not a widespread problem. If it's done on a credit card without permission, the card holder can dispute the charges and the cc company will automatically side with the card holder. I tend to believe that if a teenager gets ahold of their parent's credit card, there are many more stops they will make before online gambling.

I also think under the Republican theory of limited government and personal responsiblity, parents shouldn't depend on government to monitor their children. They need to take some responsibility.

[Benjamin]

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The gambling law site I referenced earlier in the thread spoke as if the action were definitely occuring where both parties physically were.

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Here's the article dealing directly with this issue. http://www.gambling-law-us.com/Artic...where-here.htm

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[Jay Cohen]

That's pretty much the party line these days. I just think it is interesting that there was a time when that was not the way the courts saw things.

Today's courts tend to be very result oriented. Most, not all but most know where they want to go with a decision and reverse engineer things from there.

[Benjamin]

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I doubt a court would consider a commercial website like WSEX a "private place".

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But, the state court only has jurisdiction over the gambling/gambler because of their physical location within that state. Where is the bettor playing cards, physically? In his private office or spare bedroom.

If you try to say that he is playing in the public space of WPEX's website, then you run into problems with asserting any jurisdiction at all, because that website is in Antigua.

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[LinusKS]

Hi, Mr. Cohen. Thanks for posting. (I'd forgotten you sometimes post here.) I'd imagine you know more about Federal law in regards to internet gambling than just about anyone. Personally I'd love to see you write a book.

FWIW, I do agree with you about the distinction between placing a bet (ie, being a consumer), and running a business. Federal law generally prohibits the latter.

It's worth it for folks to remember, though, that state law is just as much law as the federal variety - and that every state either prohibits gambling outright, or limits it to state-owned or state-licensed facilities. And no internet casino/sportbook/poker room has a license from any American state.

I'm honestly not trying to hurt your business (I'm assuming here you still own WSEX). Hell, I gamble everyday - and won one of your tournaments just the other night. It's my personal belief that the (legal) risks of gambling on the internet (as a player) are extraordinarily small - to the point of not being worth worrying about.

But I do think people should understand the legal status of what they're doing, if they're going to do it.




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I'm the guy from WSEX who went to prison.

First, there is no federal law against placing a bet, online or otherwise.

I could write a book here but I just want to make a few points right now. In the early stages of my case, we found cases going back to the telegraph about "Where a bet takes place?" The courts in the early 20th century ruled that the bets took place where they were received. I will try and dig up the cases.

Moving forward to today. The Appellate Body of the WTO ruled that the US has made commitments to Antigua in the area of gambling services. The AB ruled that the US needs to allow Antiguan remote gaming companies access to consumers in the US market. They ruled that the application of Wire Act against Antiguan operations was in violation of the United States' commitments under the GATS.

For details see:

www.AntiguaWTO.com

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[blueodum]

WTO rules allow foreign-based companies to offer services that are legal in their jurisdictions to US residents (this is what the Antigua v US WTO case is all about). NONE of the Online poker companies are breaking US law because the services they offer do not take place in US territory.

If anyone is breaking the law it would be:

A) the US resident
B) the internet provider (if server based in US)
C) financial institutions (if US-based) dealing directly with an Internet Poker Site

Of course, there is no US federal law SPECIFICALLY prohibiting Internet gambling at the moment.

We live in a world of sovereign states. It should be beyond obvious that US law does not apply to business done outside the US.

[Benjamin]

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We live in a world of sovereign states. It should be beyond obvious that US law does not apply to business done outside the US.

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Ah, but that's the question. Where is the business done? At least part of the business is done in the US, in whichever state the customer is in.

The legal analysis I linked to earlier in the thread states that when an offshore business actively engages a customer in the state through advertising, email, exchanging funds, etc ... then the state has jurisdiction over that business. And the author cited cases to back it up. Enforcement is a different issue.

So, unless you can cite US state or federal case law to back up your position, I'm going to have to go with the guy that does cite it. That's my naive approach. [img]/images/graemlins/smile.gif[/img]

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[ragecg]

First, thank you for the rake-free poker JC!

Second,
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Some states allow unraked home games. Perhaps playing on WPEX, an unraked site, would be legal in these states?

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In my state, Minnesota, sadly, rake-free or not, we are making a "bet or a wager" online, and that is against current state law.

However, unorganized home cash games are still hunky dory tho, so as long as we dont post or email folks about a "regular" cash homegame, then we are in the clear on that.

[LinusKS]

All gambling operations that offer or accept illegal wagers to or from Americans within the borders of the US are breaking US law, and any services they provide to Americans inside America are in fact taking place within US territory.

Google "Jay Cohen" as a case in point.

Or, for that matter, "Manuel Noriega."

Not that I'm comparing Mr. Cohen to Noriega. I'm just pointing out, that as a matter of law - American law - you don't have to be living in the US, to be in violation of US law.


Edit: There are several Federal laws that prohibit internet gambling. Mr. Cohen was arrested, tried, and convicted because of (at least) one of them. If by "specifically," you mean they don't contain the word "internet," you're probably right. (For the most part, the internet wasn't even around when they were written.) But a law doesn't have to have the word "internet" in it to apply to the internet. If (for example) a law criminalizes "transmitting" illegal wagers, it doesn't matter how they're transmitted - whether by telephone, telegraph, or carrier pidgeon.