November 14th: House Judiciary Committee Hearing Thread

[DeadMoneyDad]

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Is the 2% tax on deposits competitive with the tax rates of jurisdictions like Antiqua, Costa Rico and Isle of Man?

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I have no idea about other tax rates, but I would think the 2% tax would be more than offset by reduced costs to the sites from access to standard secure payment providers.

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A higher US compliant "tax" doesn't harm off-shore interests but simply raises the bar of entry for US based interests, infact favors such interests in an economic competiveness perspective.



D$D

[DeadMoneyDad]

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Plus, there is a clear distinction in the law. In most states gambling is a crime, "gaming" for money is perfectly legal. The distinction is most often based on whether the game is a game of predominantly chance, or a game of predominantly skill. The former is legally gambling, the latter is legally not.

Skallagrim

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More simply is if there is a built in advantage of the game.

In States where home poker is legal and other froms of private gaming are illegal, seems to point to the further desire of legislators to allow games of skill that do not automatically generate a profit for the operator. The later is seen as a pure profit motive overriding the ability of the individual to seek entertainment.

Porn is an interesting similarities, you can watch porn but if those who proift from the disrtibution or production are seen as "over profiting" or harming nearly anyone else the interests of the State overide personal freedoms.



D$D

[DeadMoneyDad]

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FoF can make a Biblical case against gambling by using a definition that incorporates attributes associated with the sins of Greed or Coveteousness. Casting lots is a red herring. Do we really want to try and argue that playing poker is the same as rolling some bones or flipping a roman coin?

Bottom line is we aren't going to convince most politicians to change their views by making a Biblical argument that God is 'neutral' regarding gambling. For the politicians that can be swayed, I doubt they would take our word over Dobson's.

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No the real point is that no single argument is going to win the day for us. Neither is any single method of action all gain from the synergy of all the others. A single tide to some degree raises all boats, well exect for those full of holes which are already sunk and thus are the only objects that in effect get "deeper", but only in relative terms if you can't breath underwater.


D$D

[kidpokeher]

Sorry to throw cold water on things but this article in AP seems to indicate the Treasury Dept is looking to move even further than the proposed regulations, turning the banks into cops and making them analyze checks and wire transfers.

Strange considering the proposed regulations stated this wouldn't be economically feasible.

http://www.chron.com/disp/story.mpl/ap/fn/5301747.html

[TheEngineer]

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Sorry to throw cold water on things but this article in AP seems to indicate the Treasury Dept is looking to move even further than the proposed regulations, turning the banks into cops and making them analyze checks and wire transfers.

Strange considering the proposed regulations stated this wouldn't be economically feasible.

http://www.chron.com/disp/story.mpl/ap/fn/5301747.html

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Thanks for posting that. Those are comments from the hearing.

I hope we'll all continue to post comments on the regs. Thanks.

[DeadMoneyDad]

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First, look at what gaming is and put it in context with everything she said then compare to gambling.

GAMING: verb, 3. a competitive activity involving skill, chance, or endurance on the part of two or more persons who play according to a set of rules, usually for their own amusement or for that of spectators.

Gambling: noun, 1. to play at any game of chance for money or other stakes.
2. to stake or risk money, or anything of value, on the outcome of something involving chance: to gamble on a toss of the dice.

Since we consider poker a game of skill with a chance factor as secondary, then gaming is correct.

obg

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More over IMO, when you hear a Congress person (or staffer) hesitate in choice of the two or use them incorrectly it is possible to use their own question or comment to smoothly make this point without seeming to be changing the subject almost no matter what the question.

[TheEngineer]

X-post: Here's my post-hearing letter to the Committee. I hope you'll all write to your congressman and senators about the hearing. Any opinions on the letter? Thanks.

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November 21, 2007

House Judiciary Committee
2138 Rayburn House Office Building
Washington, DC 20515

Dear Chairman Conyers and the House Judiciary Committee:

I am writing in response to the Committee’s Hearing on Establishing Consistent Enforcement Policies in the Context of Online Wagers. Specifically, I am writing concerning Rep. Bob Goodlatte’s statements that online gaming should be a state issue. I agree one hundred percent, which is why I disagree with Rep. Goodlatte position on this issue one hundred percent.

Rep. Goodlatte said he favors leaving gaming law under the purview of the states, even with regard to online poker. He said (to Ms. Annie Duke):
[indented in letter]“That is the whole point of the legislation that was passed, to enable individual states to enforce their laws regarding the laws that they have in those states.”

However, he readily admitted at this hearing that his goal is to take from states the right to allow their residents to play interstate or international Internet poker. He said (again, to Ms. Annie Duke):
[indented in letter]“But the fact of the matter is that I would like to have a ban on all interstate transactions with regard to betting. I would support any legislation that did that, but I will also support any legislation that goes as far as I can possibly take it to go, and that is exactly what the legislation we passed is.”

One notable aspect of Internet poker as it exists today is that a large number of players are drawn from across the globe. This provides economies of scale and competition between sites, both of which keep costs down and quality up. The large player pool also allows for a superior product, as there are always many games of various types and stakes from which to choose. Rep. Goodlatte advocates taking this right from the states. In its place, he proposes forcing states that do not wish to prohibit their residents from playing Internet poker to set up in-state operations that may be far inferior to and more expensive than those obtainable in the broader market. As states can already make interstate Internet poker illegal within their borders, a federal ban on interstate Internet poker is unnecessary. Rep. Goodlatte has a piece of paper signed by forty-eight state attorneys general stating that they do not regulate or license Internet gaming, but only a handful of those states actually prohibit Internet poker. If these states wished to not have interstate Internet poker, they would have passed legislation prohibiting it, especially if they wanted the federal government to take the unusual step of enforcing it.

Unlike bans like as the one Rep. Goodlatte advocates, both HR 2610, the Skill Game Protection Act (SGPA), and HR 2046, the Internet Gambling Regulation and Enforcement Act (IGREA) respect and enhance the traditional rights of states to legislate gaming within its borders. SGPA clarifies that the Wire Act does not apply to Internet poker and other games of skill, thereby allowing states to decide if they will permit its residents to play online poker or not. IGREA respects the rights of states to determine what gaming it permits within its borders by permitting states to opt out. States only stand to gain with passage of these pieces of legislation.

The bottom line is that I want to keep my right to play poker online. I am an American and I vote. Last year’s Unlawful Internet Gambling Enforcement Act of 2006 woke up millions of other poker players just like me. We will all vote for their freedoms in 2008. I encourage the members of the Committee to listen to the voters and support SGPA and IGREA.

Thank you for your consideration.

Sincerely,

TheEngineer

[TheEngineer]

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The PPA would welcome 2+2s thoughts on follow-up questions to specific panelist. These questions can be submitted by members of the Committtee and we already have some tee'd up who are willing to do so. One area we did not drill down deep enuff on in the hearing was the proposed regulations. Specifically, I would have liked a line of questions that forced the Treasury witness to respond to why they do not define "unlawful internet gambling" in the proposed regulations and why they felt that U.S. financial institutions (ie private industry) was in a better position to do so.

Further, I would like to see DoJ/Treasury follow Rep. Goodlatte's logic on states rights. It would seem to me that a federal bill and corresponding regulations (the UIGEA) which seeks to block "unlawful internet gambling" transaction unilaterally without consideration to whether a state has said an acitivty is unlawful does not protect states rights, but rather unsurps them.

Please know that we have a top notch crew in Washington working on your behalf. This hearing will not be the last movement on this issue before Congress leaves for the year.

Seperately, Annie and I met with a member of Congress after the hearing (he was not a member of the Committee) but important nontheless. He told us that after Iraq and Immigration, Internet poker was the issue his office had recieved the most mail/email/calls about. He will also be signing on as a cosponsor to Wexler/Frank/Berkeley this week. I only share this cause I believe it demostrates the power of individual contact with members of Congress. Let work together to build more sucess!

John A. Pappas
PPA, Executive Director

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Everyone: just a reminder to try to get some of this stuff. I wrote a reponse to Goodlatte's states' rights fallacy (posted earlier).

I'm going to go eat some turkey. Happy Thanksgiving everyone!

[DeadMoneyDad]

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Happy Thanksgiving everyone!

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D$D

[TheEngineer]

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Further, I would like to see DoJ/Treasury follow Rep. Goodlatte's logic on states rights. It would seem to me that a federal bill and corresponding regulations (the UIGEA) which seeks to block "unlawful internet gambling" transaction unilaterally without consideration to whether a state has said an acitivty is unlawful does not protect states rights, but rather unsurps them.

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My latest comment submittal:


November 22, 2007

Jennifer J. Johnson
Secretary, Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, N.W.
Washington, DC 20551

Dear Secretary Johnson:

I am writing in regard to the proposed regulations (Docket No. R-1298) implementing the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). It appears that the regulations as written would likely lead to overblocking of legal transactions, as was acknowledged by the authors of the regulations. This overblocking would result in federal usurpation of the right of the states to control gaming within their borders. As such, I ask that the regulations be modified to eliminate this unintended consequence of this legislation.

During the November 14th House Judiciary Committee’s Hearing on Establishing Consistent Enforcement Policies in the Context of Online Wagers, UIGEA proponent Rep. Bob Goodlatte (R-VA) stated that he favors leaving gaming law under the purview of the states. He said (while addressing the issue of Internet poker):

“That is the whole point of the legislation that was passed, to enable individual states to enforce their laws regarding the laws that they have in those states.”

It is clear that UIGEA was intended only to enforce existing federal and state laws, not to create a federal prohibition on Internet poker and other online non-sports gaming via ambiguous regulations. Unfortunately, the regulations as written do not give sufficient direction to financial institutions as to the types of transactions they are to prohibit. As a result, banks will likely block legal transactions.

A primary problem area is interstate Internet poker. Federal case law is relatively clear in this matter – per appeals court decisions in re MasterCard International Inc. and other cases, the Wire Act covers only sports betting. There is no other federal law banning interstate Internet poker. At the state level, only a handful of states prohibit Internet poker. As such, the regulations should be careful to not impact Internet poker in states that have chosen to not pass laws prohibiting its residents from playing Internet poker.

To preserve the rights of the states to determine what gaming they wish to permit within their states, I ask that the regulations specify that state laws enforced by UIGEA must be unambiguous in their application to the Internet and to the specific types of gaming banned by that state. Additionally, states desiring federal assistance in enforcing Internet gaming restrictions should be required to request this assistance in writing from the Secretary of the Treasury.

Our financial institutions deserve to know exactly what they are required to prevent, and our states should continue to have the right to choose what types of gaming they permit within their borders.

Thank you for your consideration.

Sincerely,


TheEngineer