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THE GAMBLING BILL

In the light of the recent introduction of anti-gambling legislation in the US, most gambling sites are no longer accepting players from the US. We are therefore posting any relevant information we receive in this section.

(9th August 2008) - Speak Out Against UIGEA!

(12th May 2007) - Bill introduced to study online gambling

(1st November 2006) - Ultimate Bet accepting US Players

(29th October 2006) - Religious Agenda Behind Bill

(24th October 2006) - King.com accepts US residents

(22nd October 2006) - Dream Poker Restrictions

(13th October 2006) - VIP Poker Restrictions

(11th October 2006) - Absolute Poker Continues to Welcome US residents

(4th October 2006) - The Unlawful Internet Gambling Enforcement Act of 2006 Analysed.

We need your support to right this wrong. The Poker Players Alliance is a not-for-profit organization fighting for the rights of poker players to play an American Tradition in the venue of their choosing, either on-line or off-line. We provide both a voice and a service for poker players to defend poker, a game of skill.

Speak Out Against UIGEA!

There’s been a lot of interest lately concerning the UIGEA. (Not sure what the UIGEA is? You should know! But if not, check out the Wikipedia entry here.) 

Passed in 2006 as a “rider” to the Safe Ports Act, the UIGEA has been controversial from the beginning (even though it was voted for almost unanimously). It was attached to the Safe Ports Act by conservative Republican Senators Bill Frist and Jon Kyl, but its inclusion was voted for by almost every member of Congress.  

In recent weeks, some legislators have made efforts to overturn the bill — or at the very least, to clarify the nature of its vague wording. Massachusetts Representative Barney Frank has recently emerged as the default leader of this movement. His anti-UIGEA bill, HR 5767, has so far been defeated, but seems to have clued Congress in to the fact that many Americans dislike UIGEA.

Since then, Texas Republican Pete Sessions has introduced a bill that seeks to “clarify” UIGEA, claiming (with justification) that UIGEA is basically unenforceable because it relies on financial institutions to do the work of the Justice Department. However, some online poker players have spoken out against Sessions’ bill, stating that it’s not the proper solution to the problem. 

So, although no real progress has been made in the fight against the UIGEA, we are definitely seeing more legislators cluing in to the fact that it might help their popularity to try to get the law changed.

And this is where you come in: Congress acts on the will of the people, so don’t be afraid to send a letter (or letters!) to your representatives and let them know how unfair this bill is.

Rep. Shelley Berkley has introduced a bill calling for a one-year study of online wagering.

WASHINGTON, DC -- In another effort to roll back an Internet gambling ban, Rep. Shelley Berkley on Thursday introduced a bill calling for a one-year study of online wagering by the National Academy of Sciences.

"One of the advantages of this legislation is that it doesn't take a side," she said. "It doesn't say Internet gambling is good or bad. It says 'Let's study the issue.' "

But Berkley, D-Nev., acknowledged she wants to repeal the Internet gambling ban approved last year by Congress.

"It's very difficult to unring a bell once it has rung in Washington," Berkley said. "But the ban was sneaked onto a port security bill, and the people who voted for it, including myself, were not contemplating a ban on Internet gambling."

The measure was passed and signed into law in October.

Berkley's bill comes one week after Rep. Barney Frank, D-Mass., proposed legislation to repeal the Internet gambling ban and require the Department of Treasury to regulate the $13 billion online wagering industry. Berkely's approach differs radically from Frank's. Instead of taking a pro- or anti-gambling stance, Berkley's legislation asks for objective recommendations from the National Academy of Sciences.

"(Congress) is going to be told by the Justice Department that there's lots of money laundering out there and that organized crime is involved (in Internet gambling)," said Joseph Kelly, a professor of business law at Buffalo State. "Once you have a study that comes out and says 'Internet gambling can be safely regulated to ensure the suitability and solvency of all licensees, and under aged people can be kept out, etc.,' then I think there's a good chance of legislation such as Barney Frank's bill being taken very seriously."

Kelly also believes that when the U.K. begins issuing licenses this fall, the perceptions of many members of Congress may change.

"Great Britain's regulatory system has the reputation of being maybe the toughest in the world," Kelly said.

Berkley is a co-sponsor of Frank's bill and Frank has said Berkley's bill is "perfectly complementary" to his.

While Frank's bill has 11 co-sponsors so far, Berkley claims to have 60 co-sponsors, including Frank and Nevada's two other House members -- Reps. Dean Heller and Jon Porter, both R-Nev.

Other Berkley co-sponsors include Rep. John Conyers, D-Mich., the chairman of the House Judiciary Committee which is likely to review Berkley's bill, and Rep. Frank LoBiondo, a New Jersey Republican who represents casinos in Atlantic City.

Another bill, which would carve out an exemption from the ban for Internet poker players, is being drafted by Rep. Bob Wexler, D-Fla.

The National Research Council, a branch of the National Academy of Sciences, would conduct the Internet gambling study, according to Berkley's bill.

Among other things, Berkley's bill would:

* Assess the impact of the ban approved last year.

* Examine technological methods used by other countries which license and regulate Internet gambling.

* Analyze recent rulings on Internet gambling by the World Trade Organization.

Porter, who introduced a bill last year calling for an 18-month study of Internet gambling by a federal commission, said Berkley's bill is more specific.

"I would say this (Berkley's) bill has a better chance of passing because this time there will be more discussion and debate," Porter said.

UltimateBet is still taking U.S. bets

UltimateBet continues to be available for play by all members of the online community worldwide, including US players. The new US legislation, signed on Friday, October 13, does not prohibit the online community playing online poker. At UltimateBet, it’s business as usual. All players’ deposits are held safely in a segregated account at a Tier 1 legal institution.

Religious Agenda Behind Bill

Nobody wanted to listen when I was spouting off about Internet gaming being banned in the United States , but now unfortunately I get to tell you I told you so.

I didn't even know that the Unlawful Internet Gambling Enforcement Act had been passed. I thought it was still in committee and wasn't going to be looked at until after the November elections.

Wrong!

Republicans, that's right, Republicans, the ones who are supposed to pride themselves on staying out of your personal lives, have decided to act like Democrats and force their morality on you.

Therefore, the bill, which was sponsored by Robert Goodlatte (R-Va.) was snuck into a port security bill to assure its passage. Senate majority leader Bill Frist (R-Tenn.) was responsible for that.

If you would like to register your displeasure with either one of these idiots, here is their contact information.

Frist can be reached at (202) 224-3344 or email him repeatedly at http://frist.senate.gov/index.cfm?FuseActionfiltered=AboutSenatorFrist.ContactForm

Goodlatte can be reached at: (202) 225-5431 or email him repeatedly at http://www.house.gov/goodlatte/contact.htm

When it asks for your zip code, type in 24502-2269.

Not surprisingly, it is the same zip code of Jerry Falwell's church, the supposed Christian who wants to legislate our morality. Falwell believes that gambling is the work of the devil and that it should be banned.

Goodlatte, who I am sure has received financial contributions from Falwell, jumped high for him and got this bill passed.

So now when you sign on to play poker at some sites, you get a message telling you that playing online games for money is restricted and will be banned Nov. 13.

While some sites are working on ways to correct the problem, you can still do something about this travesty.

First, go to www.pokerplayersalliance.org and read up on the bill and what this organization is doing.

The Poker Players Alliance is a nonprofit membership organization comprised of poker players and enthusiasts from around the United States who have joined together to speak with one voice to promote the game, ensure its integrity, and, most important, to protect poker players' rights.

They are working on getting an exception to poker in the current law, since it is a game of skill and not luck.

The way the legislators set up this bill was by putting the onus on the banks. See, they couldn't get to the gambling sites, all of which are based in other countries, so they decided to force banks to keep track of your transactions.

Words like monitor and track are used in the legislation, and if this doesn't bother you it should.

It isn't like you can't continue to go to poker sites and play, you just won't be able to put any money into an account. How some people will get around this, especially those that live in states bordering Mexico and Canada, would be to set up a bank account in those countries.

That way they could use those accounts to transfer money, and it wouldn't be subject to any American regulations.

That is an extreme measure, and the Poker Players Alliance is still working on getting poker excluded from this bill. It is a hard fight, and everyone is needed. If you enjoy the game of poker, please join the organization. It is trying to ensure the game you love isn't taken away by congressmen with a religious agenda.

By John Reger
WagerWeb.com Contributing Writer

Author Bio: John Reger has been playing poker for more than 20 years in card clubs and casinos all over the world and has been playing online for five years. He lives in Southern California and works as a freelance writer covering sports, travel and entertainment.

King.com accepts US residents

King.com will accept U.S. residents as players and promises not to make any restrictions according to country of residence.

King.com, is the world’s largest skill gaming site, where money can be won by participation in tournaments.

Every month, King.com hosts more than 15 million games played and pays out more than US$3m to customers. King.com has millions of players from more than 50 countries and we think you will fit right in!

In Skill Gaming, players take part in tournaments where skill is decisive in determining the outcome. The players back themselves to win with small stakes, and the winner takes the pot.

Dream Poker Restrictions

DreamPoker has had to consider the effects of these unfortunate changes and so, has made the tough decision to block the following States from playing on our software:

Michigan, Wisconsin, South Dakota, Illinois, Washington, New York, Louisiana, Indiana, New Jersey, Oregon and Nevada.

This response is due to the current legislation in the above states being non-conducive to our operations. We are, however, still open to all players in the other 41 states and as a sign of solidarity and a token of our appreciation we’re inviting them to join in and enjoy our fantastic promotional line-up:

There’s the Lucky 7’s Freeroll taking place on Wednesday the 25th of October and Wednesday the 1st of November, with $7,000 up for grabs each day! With cash like this you can be sure of some great Poker.

On Sunday November 5th players will have the chance to compete in the biggie… the $275,000 Guarantee! This massive tourney is not to be missed and promises megabucks to the winning elite.

VIP Poker Restrictions

As a current member of the Microgaming poker network, VIP.com Poker regrets to inform you, effective immediately, that players that reside in the eleven U.S. States listed below will no longer be able to gain access to VIP.com Poker:

Michigan, Illinois, Louisiana, Oregon, Wisconsin, Washington, Indiana, Nevada, New York, New Jersey and South Dakota

The blocking of players from these select U.S. States is a result of Microgaming's response to the recent Unlawful Internet Gambling Enforcement Bill in the U.S. Affected States are those that have specific legislation banning online gambling or States that have represented that their conventional anti-gambling laws would cover online gambling.

VIP.com Poker sends its sincere apologizes to all players affected by this recent development and confirms that they are busy working to find a long-term solution that will allow players from around the globe access to their poker room.

VIP.com continues to provide all of their other services to all customers, including the quickest payouts in the industry, sports, casino and horse wagering, as well as 24/7 access for customers to their funds.

Absolute Poker.com - absolutely business as normal Wednesday Oct 11 2006 #

Absolute Poker – Absolute Poker Business as normal!

Absolute Poker is a privately held business and its executives today issued the following statement: "As the 4th largest online poker company we continue to welcome all Affiliates and their Poker Players!

Absolute Poker is Absolutely confident in its ability to continue to offer US players the very best in Online Poker with the fastest secure deposit and payout solutions, all new and existing players should be 100% confident in playing with the very best Absolute Poker."

The Safe Ports Act passed by the US Congress on September 30th neither prohibits nor makes it illegal for any US customer to play with Absolute Poker and therefore customers experience at Absolute Poker will not change. Our business continues to run as normal.

We will have continued updates and assessments of this situation, but we are confident again, that you will be able to continue to enjoy all of the offerings at Absolute Poker as you always have. We look forward to having you as an affiliate, and being a part of our site as we grow and experience new heights in the years to come.

Thank you for your continued support!!

Absolute Poker Affiliate Team

The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed

Copyright October 4, 2006, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, www.GamblingAndTheLaw.com.

By I. Nelson Rose
WagerWeb.com Contributing Writer

The Unlawful Internet Gambling Enforcement Act of 2006 was rammed through Congress by the Republican leadership in the final minutes before the election period recess. According to Sen. Frank R. Lautenberg (D-NJ), no one on the Senate-House Conference Committee had even seen the final language of the bill. The Act is title VIII of a completely unrelated bill, the Safe Port Act, HR 4954, dealing with port security. It can be found on pages 213 -244 of the Conference Report: http://www.saveonlinegaming.com/hr49543.pdf . It is based on the Leach and Goodlatte bills, HR 4411 and HR 4777, but there are some important differences.
The following is a detailed analysis of the Act. The section numbers that follow refer to new sections that have been added to title 31 of the U.S. Code:

5361 The Act begins with Congress’ findings and purpose. These include a recommendation from the discredited National Gambling Impact Study Commission, whose chair was the right-wing, Republican incompetent, Kay Coles James. Findings include the doubtful assertion that Internet gambling is a growing problem for banks and credit card companies. It correctly states that "new mechanisms for enforcing gambling laws on the Internet are necessary," especially cross-border betting.

The Act contains a standard clause that it does not change any other law or Indian compact. It repeats this many times, to make sure that no one can use the Act as a defense to another crime, or to expand existing gambling.

Most important, the Department of Justice is arguing before the World Trade Organization, in the dispute between the U.S. and Antigua, that all interstate gambling is illegal under the Wire Act. The DOJ insisted that any Internet prohibition passed by Congress not expressly authorize Internet betting on horse racing. The DOJ believes this will allow it to continue to argue that the Interstate Horse Racing Act does not do exactly what it says it does, legalize interstate horse racing.

5362 Definitions. Bet or wager includes risking something of value on the outcome of a contest, sports event "or a game subject to chance." The Act otherwise allows contestants to risk money on themselves. The "game subject to chance" restriction is designed to eliminate Internet poker.

The Act then confuses the issue of skill by stating that betting includes purchasing an "opportunity" to win a lottery, which must be predominantly subject to chance. Someone will figure out a way to create an opportunity to win, where the opportunity is subject to some chance. But the Act expressly prohibits lotteries based on sports events.

Betting includes instructions or information. This eliminates the argument overseas operators used that the money was already in a foreign country, so no bet took place in the U.S.

The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling. These include securities and commodities, including futures, that are traded on U.S. exchanges. Boilerrooms and bucketshops, selling foreign securities are gambling. Insurance is not.

Free games are not gambling. But there is a special provision that allows sites to offer points or credits to players only if these are redeemable only for more games. Operators of free games, where players can win valuable prizes, will have to stop giving points for wins that can be redeemed for cash. Free bingo, on the other hand, can still give small cash prizes paid out of the advertising budget.

Fantasy leagues are legal, but subject to detailed restrictions. A fantasy team cannot be "based on the current membership of an actual team." What they actually mean is a fantasy team cannot be composed merely of the players of a real team. There is no limit on the cost of entering, but prizes must be announced in advance, and not based on the fees paid by participants. Statistics must be derived from more than one play, more than one player, and more than one real-world event.

Being in the "business of betting or wagering" still does not include mere players. It also expressly does not include financial institutions involved in money transfers.

"Designated payment system" is a new term. It could have been labeled simply "target," as in "you are the target of a criminal investigation." It covers any system used by anyone involved in money transfers that the federal government determines could be used by illegal gambling. The procedure will be that the Secretary of the Treasury, Board of Governors of the Federal Reserve System and Attorney General will meet and create regulations and orders targeting certain money transfer systems.

"Financial transaction provider" is a very broad definition covering everyone who participates in transferring money for illegal Internet gambling. This expressly includes an "operator of a terminal at which an electronic fund transfer may be initiated," and international payment networks. This covers third party providers, like Neteller.

"Interactive computer service" includes Internet service providers.

"Restricted transaction" means any transmittal of money involved with unlawful Internet gambling.

"Unlawful Internet gambling" is defined as betting, receiving or transmitting a bet that is illegal under federal, state or tribal law. The Act says to ignore the intermediary computers and look to the place where the bet is made or received.

This does not completely solve the problem of Internet poker, or even Internet casinos. The Act does not expand the reach of the Wire Act, the main federal statute the DOJ uses against Internet gambling. Although the DOJ has taken the position that the Wire Act covers all forms of gambling, courts have ruled that it is limited to bets on sports events and races. State anti-gambling statutes have similar weaknesses, including the presumption that they do not apply if part of the activity takes place overseas. This new statute requires that the Internet gambling be "unlawful." But it would often be difficult to find a federal, state or tribal law that clearly made a specific Internet bet illegal.

Nevada and other states are expressly permitted to authorize 100 percent intrastate gambling systems. Congress required that state law and regulations include blocking access to minors and persons outside the state.

Tribes were given the same rights, with the same restrictions. Two tribes can set up an Internet gaming system, if it is authorized by the Indian Gaming Regulatory Act. This means that tribes can operate bingo games linking bingo halls on reservations. They can also link progressive slot machines, if their tribal-state compacts allow. But they cannot operate Internet lotteries and other games open to the general public.

It is interesting that Congress decreed that states can decide for themselves if they want to have at-home betting on horse racing, but not on dog racing. Congress also decreed that tribes can operate games that link reservations, even across state lines, but not the states themselves: State lotteries are not exempt, as they were in the House bill. This will lead to an inevitable fight over whether multi-state lotteries are legal, once players can buy tickets on the Internet, since they will be sold only in states where the sales are legal.

Congress had a little problem with the term "financial institution." To force casinos to report large cash transaction, federal law was changed to define "financial institution" as including large gambling businesses. Congress had to undo that definition, so that in this Act casinos go back to being casinos.

The other definitions are standard or are described above.

5363 "No person engaged in the business of betting or wagering may knowingly accept" any money transfers in any way from a person participating in unlawful Internet gambling. This includes credit cards, electronic fund transfers and even paper checks. But it is limited to Internet gambling businesses, not mere players. It also would not cover payment processors or ISPs, even under a theory of aiding and abetting.

Strangely, the Act clearly does not make it a crime to knowingly transmit funds for illegal gambling. For a law designed to stop the flow of money, it is bizarre to make it a crime only to receive the funds, but not to send them or transmit them: Neither the player nor the intermediary can be charged with this crime. The language of the Act even eliminates the possibility of charging financial institutions and computer hosts under a theory of aiding and abetting, since it explicitly states, in the definitions section, that being in the business of gambling does not include a "financial transaction provider," or an ISP.

5364 Federal regulators have 270 days from the date this bill is signed into law to come up with regulations to identify and block money transactions to gambling sites. At this writing, President Bush had not yet signed this bill, but he will. So the regs will go into effect by the beginning of July 2007.

The regs will require everyone connected with a "designated payment system" to ID and block all restricted transactions. So all payment processors are supposed to have systems in place to prevent money from going to operators of illegal Internet gambling. The first step will undoubtedly be to take the credit card merchant code 7995 and expand it to all money transfers. Visa created the 7995 classification in 2001 to avoid having its credit cards used for online gambling. The federal government will order banks and all others involved with electronic money transfers to cease sending funds to any Internet operator who has a 7995 credit card merchant code. Any financial institution that follows the regs cannot be sued, even if it wrongfully blocks a legitimate transaction.

The Act allows the federal regulators to exempt transactions where it would be impractical to require identifying and blocking. This obviously applies to paper checks. Banks have no way now of reading who the payee is on paper checks and cannot be expected to go into that business. Banks tried to defeat this bill, not because they cared about patrons’ privacy, but because they knew that it would cost them billions of dollars to set up systems to read paper checks.

The great unknown is how far into the Internet commerce stream federal regulators are willing to go. The Act requires institutions like Bank of America and Neteller to ID and block transactions to unlawful gambling sites, whatever they are. But, while Bank of America will comply, Neteller might not, because it is not subject to U.S. regulations. Will federal regulators then prohibit U.S. banks from sending funds to Neteller? And would they then prohibit U.S. banks from sending funds to an overseas bank, which forwards the money to Neteller?

For financial institutions within the U.S, the Act provides that exclusive regulatory enforcement rests with their federal regulators, like the Federal Reserve Board. The Federal Trade Commission is supposed to enforce regulations on everyone else. It is extremely doubtful whether the FTC. will ever try to do anything about the Netellers of the world, who are beyond regular U.S. regulatory control.

5365 Since there is no way to regulate overseas payment processors, the Act allows the U.S. and state attorneys general to bring civil actions in federal court. The courts have the power to issue temporary restraining orders, preliminary and permanent injunctions, to prevent restricted transactions. The only problem with this enormous power is that it is, again, practically useless against payment processors who are entirely overseas.

It is difficult to serve a company with the papers necessary to start a lawsuit, a summons and complaint or petition, if the company has no offices, or officers, in the U.S. Even if the papers for such a lawsuit can be served, there is normally no requirement that foreign countries enforce these types of orders. Other countries are particularly reluctant to enforce a T.R.O., which does not even require that the defendant be present. Preliminary injunctions are also often ignored, because they are issued without a full trial and can be modified at anytime by the trial judge. Neteller operates out of the Isle of Man. I do not know of any treaty or other law which would require the Isle of Man to enforce even a permanent injunction against one of its licensed operators.

The Act provides for limited civil remedies against "interactive computer services." An Internet service provider can be ordered to remove sites and block hyperlinks to sites that are transmitting money to unlawful gambling sites. ISPs are under no obligation to monitor whether its patrons are sending funds to payment processors or even directly to gambling sites. But once it receives notice from an U.S. Attorney or state Attorney General, the ISP can be forced to appear at a hearing to be ordered to sever its links.

But the statute has an interesting requirement: The site must "reside on a computer server that such service controls or operates." This would limit the reach of this statute to payment processors, affiliates and search engines that are housed on that particular ISP. The same problem of going after foreign operators and payment processors affects this section. Foreign ISPs are difficult to serve and not necessarily subject to federal court injunctions.

The greatest danger here would seem to be with affiliates. Any American operator can be easily grabbed. This includes sites that don’t directly take bets, but do refer visitors to gaming sites. If the affiliate is paid for those referrals by receiving a share of the money wagered or lost, it would not be difficult to charge the affiliate with violating this law, under the theory of aiding and abetting. Being a knowing accomplice and sharing in the proceeds of a crime make the aider and abettor guilty of the crime itself. The federal government could also charge the affiliate with conspiracy to violate this new Act.

The other danger lies with search engines. Although California-based Google does not take paid ads, punching in "sports bet" brings ups many links to real-money sites. This new Act expressly allows a federal court to order the removal of "a hypertext link to an online site" that is violating the prohibition on money transfers. But what prosecutor would want to be ridiculed internationally for trying to prevent Google from showing links?

The Act gives ISPs a little more security by declaring that they cannot be convicted of violating the Wire Act, unless, of course, the ISP is operating its own illegal gambling site.

This section of the Act ends with a limitation, that, frankly, makes no sense. It says that, after all the talk of getting court orders to prevent restricted transactions, "no provision of this subchapter shall be construed as authorizing" anyone "to institute proceedings to prevent or restrain a restricted transaction against any financial transaction provider, to the extent that the person is acting as a financial transaction provider." This could be a typo, since the bill was rushed through without an opportunity to even be read. Or perhaps it means that banks can be ordered to not transfer money to gambling sites, but only if they know about it. It is indecipherable.

5366 Criminal penalties: Up to five years in prison, and a fine. And barred from being involved in gambling.

5367 The Act naturally makes ISPs and financial institutions liable if they actually operate illegal gambling sites themselves.

Lastly, the Act requests, but does not require, the executive branch to try and get other countries to help enforce this new law and "encourage cooperation by foreign governments" in identifying whether Internet gambling is being used for crime. The Secretary of the Treasury is told to issue a report to Congress each year "on any deliberations between the United States and other countries on issues relating to Internet gambling." That report will go unread.

© Copyright October 4, 2006. Professor I Nelson Rose, Whittier Law School, Costa Mesa, CA is recognized as one of the world’s leading experts on gambling law. His latest books, Gaming Law: Cases and Materials and Internet Gaming Law, are available through his website, www.GamblingAndTheLaw.com.

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