The New US Gambling Laws: What Does It All Mean?

At the end of September 2006 the U.S. Senate introduced “The Unlawful Internet Gambling Enforcement Act 2006”. It wasn’t so much introduced as pushed through at the back end of the “Safe Port Act”, to which some commentators have taken exception. This has caused a flurry of anxiety and (some would say) hysteria among players, website owners and online gambling affiliates alike. But what does the new law actually mean? This article has a look at the facts behind the new legislation.

The first clue is in the wording of the Act itself; it is an enforcement Act. In other words it enforces previous and existing law where legality of gaming has already been established as a matter of precedent, and also the legality and illegality of different types of gaming already existing.

I could do much worse than directly quoting the wise words from Cardplayers legal counsel. He writes that the new bill

“attempts to make it more difficult to get money into a site by forbidding US financial Institutions from funding the type of online gambling that the law has previously made illegal. The new bill does not make online gaming illegal where it was not illegal before …The bill merely speaks to the mechanism by which an online account is funded.”

In other words the Act attempts to hinder Internet gambling sites by starving them of funds, by ordering the banks not to allow players to use their credit cards to play at those sites.

There is nothing about the activity itself being illegal (where it was not illegal before). And clearly, if the gambling sites in question are offshore, then by definition they are not subject to US legislation anyway. So the only way to get at these offshore sites is through the banks and the credit card companies.

The article I quote from goes on to cite the significance of the 1961 Wire Act, which was construed to have made sports betting illegal, but not games such as poker, on the grounds that the law was never enforced with regards to poker in the ten years that Internet gambling has existed. Instead, the 33 cases which were brought under the Wire Act were pursued by “deadbeat gamblers” who simply did not want to pay their gambling debts. The judge on that particular occasion, Stanwood R. Duvall Jr, threw out all 33 suits, so ruling that online poker was not within the reach of the Wire Act’s prohibition.

Now while the lawyers are busying themselves on working out the construction of what the new law actually means, it seems that players can make a few simple choices in order to protect themselves from what might be construed:

1. Open an account at an offshore Internet casino website;

2. Ensure the site is registered with a non-US company;

3. Ensure the site is hosted by a non-US company.

The vast majority of offshore Internet gambling sites still operate in US dollars, and they increasingly offer multiple currency choices. You can select which currency you wish to use before you play. Even so, it may be worthwhile remembering that, at the time of writing, there are approximately $1.87 to the Pound Sterling, and $1.26 to the Euro.

If the law goes further it may well be necessary to apply for a credit card issued by a non-US bank. But this is still something that is subject to speculation. We will have to see how the new law pans out in practice. In particular we will have to await the matter of how the law is construed and how precedent impacts upon it.

Peter Deakin is webmaster of Offshore Cas

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Politicians Want to Protect us From the Evils of On-Line Gambling Part 3

This is part 3 of a multipart series of articles regarding proposed anti-gambling legislation. In this article, I continue the discussion of the reasons claimed to make this legislation necessary, and the facts that exist in the real world, including the Jack Abramoff connection and the addictive nature of online gambling.

The legislators are trying to protect us from something, or are they? The whole thing seems a little confusing to say the least.

As mentioned in previous articles, the House, and the Senate, are once again considering the issue of “Online Gambling”. Bills have been submitted by Congressmen Goodlatte and Leach, and also by Senator Kyl.

The bill being put forward by Rep. Goodlatte, The Internet Gambling Prohibition Act, has the stated intention of updating the Wire Act to outlaw all forms of online gambling, to make it illegal for a gambling business to accept credit and electronic transfers, and to force ISPs and Common Carriers to block access to gambling related sites at the request of law enforcement.

Just as does Rep. Goodlatte, Sen. Kyl, in his bill, Prohibition on Funding of Unlawful Internet Gambling, makes it illegal for gambling businesses to accept credit cards, electronic transfers, checks and other forms of payment for the purpose on placing illegal bets, but his bill does not address those that place bets.

The bill submitted by Rep. Leach, The Unlawful Internet Gambling Enforcement Act, is basically a copy of the bill submitted by Sen. Kyl. It focuses on preventing gambling businesses from accepting credit cards, electronic transfers, checks, and other payments, and like the Kyl bill makes no changes to what is currently legal, or illegal.

In a quote from Goodlatte we have “Jack Abramoff’s total disregard for the legislative process has allowed Internet gambling to continue thriving into what is now a twelve billion-dollar business which not only hurts individuals and their families but makes the economy suffer by draining billions of dollars from the United States and serves as a vehicle for money laundering.”

There are several interesting points here.

First of all, we have a little misdirection about Jack Abramoff and his disregard for the legislative process. This comment, and others that have been made, follow the logic that; 1) Jack Abramoff was opposed to these bills, 2) Jack Abramoff was corrupt, 3) to avoid being associated with corruption you should vote for these bills. This is of course absurd. If we followed this logic to the extreme, we should go back and void any bills that Abramoff supported, and enact any bills that he opposed, regardless of the content of the bill. Legislation should be passed, or not, based on the merits of the proposed legislation, not based on the reputation of one individual.

As well, when Jack Abramoff opposed previous bills, he did so on behalf of his client eLottery, attempting to get the sale of lottery tickets over the internet excluded from the legislation. Ironically, the protections he was seeking are included in this new bill, since state run lotteries would be excluded. Jack Abramoff therefore would probably support this legislation since it gives him what he was looking for. That does not stop Goodlatte and others from using Abramoff’s recent disgrace as a means to make their bill look better, thus making it not just an anti-gambling bill, but somehow an ant-corruption bill as well, while at the same time rewarding Abramoff and his client.

Next, is his statement that online gambling “hurts individuals and their families”. I presume that what he is referring to here is problem gambling. Let’s set the record straight. Only a small percentage of gamblers become problem gamblers, not a small percentage of the population, but only a small percentage of gamblers.

In addition, Goodlatte would have you believe that Internet gambling is more addictive than casino gambling. Sen. Kyl has gone so far as to call online gambling “the crack cocaine of gambling”, attributing the quote to some un-named researcher. To the contrary, researchers have shown that gambling on the Internet is no more addictive than gambling in a casino. As a matter of fact, electronic gambling machines, found in casinos and race tracks all over the country are more addictive than online gambling.

In research by N. Dowling, D. Smith and T. Thomas at the School of Health Sciences, RMIT University, Bundoora, Australia “There is a general view that electronic gaming is the most ‘addictive’ form of gambling, in that it contributes more to causing problem gambling than any other gambling activity. As such, electronic gaming machines have been referred to as the ‘crack-cocaine’ of gambling”.

As to Sen. Kyls claim about “crack cocaine”, quotes at http://www.alternet.org/drugreporter/20733/ include “Cultural busybodies have long known that in post this-is-your-brain-on-drugs America, the best way to win attention for a pet cause is to compare it to some scourge that already scares the bejesus out of America”. And “During the 1980s and ’90s, it was a little different. Then, a troubling new trend wasn’t officially on the public radar until someone dubbed it “the new crack cocaine.” And “On his Vice Squad weblog, University of Chicago Professor Jim Leitzel notes that a Google search finds experts declaring slot machines (The New York Times Magazine), video slots (the Canadian Press) and casinos (Madison Capital Times) the “crack cocaine of gambling,” respectively. Leitzel’s search also found that spam email is “the crack cocaine of advertising” (Sarasota, Fla. Herald Tribune), and that cybersex is a kind of sexual “spirtual crack cocaine” (Focus on the Family)”.

As we can see, calling something the “crack cocaine” has become a meaningless metaphor, showing only that the person making the statement feels it is important. But then we knew that Rep. Goodlatte, Rep. Leach and Sen. Kyl felt that the issue was important or they wouldn’t have brought the proposed legislation forward.

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