Forum Moderators: phranque
Republican Senators attached the ban amendment to a bill on port security, ensuring that it would pass. The measure attempts to stop the money flow, by making it illegal for banks to process online gambling transactions. Banks protested that they have no way of knowing whether transactions are gambling-related or not. But that doesn't matter now, the bill now goes to the President, who will sign it.
Gambling affiliates are freaking out, as you might suspect.
I know someone else with an addiction to coffee. Should we ban people from drinking coffee?
1) Gambling hasn't been banned, it has been restricted.
2) Coffee may kill people with dicky tickers once in a while but it doesn't otherwise ruin lives.
As for credit cards, no they should not be banned, but I do believe the various companies should be obliged to share data and measures should be introduced to stop people running up debts that can literally force them into bankruptcy. Incidentally, if such measures existed already, then my objections to online gambling would be somewhat diminished.
Kaled.
For the US decision, here's good analysis from the UK's Daily Telegraph:[telegraph.co.uk ]
An enormous casino will be built in the UK to save Tony Blair's embarrassment over the GBP 700 million millenium dome.
An enormous casino will be built in the UK to save Tony Blair's embarrassment over the GBP 700 million millenium dome.
As much as I don't like Tony Blair - the Millenium Dome was intially the idea of the Conservative Party. The Labour Party carried on with the idea, therefore both parties must share the blame in that fiasco.
A story about the Catseye
The cat's eye reflector was the brainchild of a man who hit the brakes to avoid hitting a cat and avoided driving off a cliff as a result.
And why is this story relevant? Simple, it doesn't matter what the reasons are behind this decision, it's the effect that counts.
There have been many indignant posts whinging about motives and civil liberties but I don't remember reading a single cogent argument explaining how/why this decision is going to make people's lives worse.
Kaled.
Because the people that gamble will continue to do so only in even shadier business than they do now. Currently we had public companies offering internet gambling to US. Now we will only have rogue companies offering internet gambling to the US. So for the millions of americans that enjoy responsable internet gambling, now they will have to deal with rogues.
*note: rogues have always existed, but if any american did some reaserch they could get legit internet gambling. Now, only the rogues will serve americans.
a, Perhaps its because they're domiciled in countries with a long tradition of defending those Civil Liberties, the errosion of civil liberties does materially affect the lives off every one, does one need to mention all the things that are going on right now, I am loath to have a spook spider reading this :-)
b, A lot off us get a lot off pleasure form online poker, etc just like a lot off us enjoy drink that weekly bottle of whisky, some off you like to go hang gliding, day trading on the various world stock exchanges etc.
All the above are potentially dangerous activities, shall we ban them all, if not, on whose moral compass do we decide which ones to ban,
or perhaps, subject to regulation, people should be left to get on with the risky business thats life
1) Essentially, it was John Major rather than the Conservative Party that started the Dome fiasco.
2) The decision on the location of a super-casino has not been decided (officially).
3) The Dome and UK casino's (super or otherwise) are irrelevant to this discussion (but I was/am against both).
4) The motives behind this decision are irrelevant.
Actually, I think the dome was Michael Heseltine's idea.
You're right super casinos in the UK have nothing to do with this. As a poker player I would just like the legal restrictions on poker venues to be lifted, or at least modified. I don't care too much about super casinos and don't think they're very necessary.
I am all for there to be regulation of online gambling, but this bill is stupid. There are many people like me, who just like playing some poker in the evenings. Thankfully I can continue, unlike many Americans. Incidentally, I don't gamble very much other than play poker. I couldn't care less about casino games, but many people enjoy them, so why shouldn't they be allowed to continue.
Actually, I think the dome was Michael Heseltine's idea.
Absolutely right. It's in his constituency.
But, whoever had the initial idea is irrelevant. It is Blair's legacy because he so wanted it to be, and Blair's embarrassment when it went rotten that put John Prescott in cowboy gear at Philip Anschutz's ranch.
It's a ridiculous idea that a theoretically socialist party should be the biggest, most enthusiastic sponsor of casinos in Britain, when, as usual, the biggest losers will be the working class.
I have no enthusiasm for casinos either, but I do also play poker (No Limit Texas Hold'em, like most these days). I'm very disappointed that this new legislation has significantly reduced my opportunities for taking money off Americans! (Please read this as a joke).
Perhaps if a compromise had been suggested some time ago we might not be here. For instance, if credit card companies were restricted to 5% of available credit per month for gambling that would have addressed many concerns. Of course, that could not apply to debit cards and direct bank transfers, etc. (since credit does not apply) but you could restrict people to say, 20% of their opening balance at the start of the month.
This legislation has been coming for months, but I don't recall any suggestions along these lines from the online gambling industry.
Of course, I can almost hear keyboards being hammered in disgust "How dare you suggest that government ration how I spend my money." - I dare because, as an engineer, I deal in practical realities rather ideologies.
A suggestion such as this would not have stopped lobbying by big money, but it would have meant that those politicians that voted on moral grounds had an alternative.
Kaled.
Kaled.
This bill was attached to another bill at the last minute by Bill Frist. The bill it was attached to was a sure thing to get approved.
That's how it got by. Calling politicians etc. now is pointlesss as it's passed both houses. All that is left now is for the president.
As to how this bill will make people's lives worse...it won't, it is simply another attack on civil liberties.
Also, to make a correction on an earlier statement by you, this bill isn't an enforcement mechanism of something already illegal. This bill simply made it illegal for banks, credit card companies etc. to fund casinos.
[edited by: Philosopher at 4:23 pm (utc) on Oct. 5, 2006]
Anyone who really believes this bill is a bad idea is free to write letters to their political representatives, etc. - that's democracy.
Perhaps if a compromise had been suggested some time ago we might not be here.
….but it would have meant that those politicians that voted on moral grounds had an alternative.
I am not a hippy saying everything should be 100% free (even though I believe in an ideology that is sort of related).
According to many very trustworthy folk I know, this ban wasn't even reviewed by most of congress.
The ban was added to the port security bill (a totally unrelated bill) at the very last minute and was approved at 12 midnight on Friday. I don't know about you, but that is the time when something can slip by me very easily.
Find out a little about the background of the person who added this ban, when and how they did it.
Also, before you say that they should have found a compromise, read about David Caruthers, and what he was looking for. If you knew about the industry, you would know that the major players were on their knees begging to be legalized and regulated. It was/is in their interest. Think about it, if you are getting over a billion in bets, you can afford to give some in tax to not end up in stripes next to bubba. Not to mention a label “Approved by the US something or other” is publicity that advertising just can’t buy. The only problem is/was that internet gambling, with its mere $12 Billion value, cannot compete with the value of offline gambling (only in the US this year is at $78.6 Billion according to the American Gaming Association), or with the lobbying this can buy.
[edited by: greenleaves at 4:29 pm (utc) on Oct. 5, 2006]
This was not illegal prior to this. Let's get the facts straight ok?
The wire act was the precedent to this ban. The Justice department's interpretation of this law was that internet gambling was illegal. However, the law only explicitly bans sports gambling over the phone, and there were no cases of successful non-sports related internet gambling procession with this law. In fact as far as I am concerned there were never any prosecutions at all to online casinos based on this old law.
So even thought the US justice department considered internet gambling illegal, there were never any laws that SPECIFICALLY banned it. Now there is, and it isn't even a ban on online gambling, just the banks, which leaves players completely exposed to scams, as they are not going to be dealing anymore with publicly traded companies that have investors to answer to. Just rogues and no support. Yes this law is going to make it so that internet gamblers can continue to loose money at online casinos, they just wont get paid as often when they win, that is the real life impact it will have on as I said, millions of honest, god-fearing average Joe Americans.
The simple fact of the matter is that there U.S. based gambling interests had a massive desire to see this law passed and used lobbyists and their connections to ensure that this law got snuck into a must pass bill. Since the financial interests most affected by this law are not U.S. based it was politically an easier law to sneak in. Also conservatives could take this bill back to religious conservatives and say see, we are doing things to protect the moral fiber of our country and to protect the family.
Really if one really looked at how things work in Washington, one should have only been shocked if this law did not get passed in Congress.
If you knew about the industry, you would know that the major players were on their knees begging to be legalized and regulated.
Also, it is generally a good rule of business to make sure you are going to operate within the law before you set up. Their lawyers will have offered warnings and if they didn't, the lawyers can be sued for poor advice.
For the record, I don't approve of the method by which this measure was introduced i.e. tacked on to a seemingly unrelated bill. However, since I live in the UK, I don't consider it to be my place to comment on the details of how US democracy works.
Kaled.
If this statement is accurate, it does confirm that they knew (or had reason to believe) they were operating outside the law. Also, begging to be legalized is not the same thing as suggesting a compromise.
That is the thing. Most people don't understand that things aren't necessarily either legal or illegal, just like everything isn't necessarily black and white, gray is a very real color.*
They weren't operating outside the law per say, but they weren't operating within the law.*
Again, as I said, do just a LITTLE research on what David Caruthers was trying. Then consider that most people like him conducted such business more discretely (they would try to get some legalization of the issue). And when I say they were trying to be legalized and regulated, obviously legalization infers regulation which in turn infers compromise (you can’t be regulated unless you accept the terms of someone else)
It is one thing to say you are for or against it (that is an opinion) but far too often people let their feelings toward gambling dictate the way they see the legal situation, and then distort the facts.
* I am not a lawyer; just an avarege guy who has been following this industry for almost 5 years.
This new legislation will affect at least hundreds, and probably thousands of U.S. webmasters, including me. I am currently working on moving my hosting outside the U.S. as a result.
Further examination of the law shows that it goes beyond prohibiting banks from handling online gambling transactions. It also allows the government to direct ISPs to disable webmasters' links to online casinos (e.g., affiliate links), for example -- and more. Here's professor I. Nelson Rose's analysis: [gamblingandthelaw.com...]
While I hate to comment on a non-webmastering aspect of this issue, I have to point out that the expected loss playing blackjack in a casino at $5/hand with proper strategy is $1.50/hr. Entertainment doesn't usually come that cheap. The comparison to heroin and other hard drugs is silly. Those can be disastrous and addictive at ANY dose. The proper analogy is to alcohol, which is used responsibly by most, but which ruins some people's lives. Gambling also ruins some people's lives, to be sure, just like alcohol. But if alcohol is legal, it seems hypocritical to ban other personal choices that can be made responsibly.
What is MOST hypocritical is that in many U.S. states, it's the GOVERNMENT that has a monopoly on gambling, via state lotteries, which have the worst odds of any form of gambling in the world. State Lottery odds are typically about ten times worse than a Vegas or Internet slot machine. In effect, the government is saying, "You, citizen, may not gamble, because it's immoral and you're too stupid to do so responsibly. But here, play our game, which is the only one you're allowed to play, and which has the worst odds on the planet."
When I started this thread I had hoped that the discussion would come from a webmastering perspective. (This is WEBMASTERworld, after all.)
This new legislation will affect at least hundreds, and probably thousands of U.S. webmasters, including me. I am currently working on moving my hosting outside the U.S. as a result.
It also allows the government to direct ISPs to disable webmasters' links to online casinos (e.g., affiliate links), for example -- and more.
What is MOST hypocritical is that in many U.S. states, it's the GOVERNMENT that has a monopoly on gambling, via state lotteries, which have the worst odds of any form of gambling in the world.
In effect, the government is saying, "You, citizen, may not gamble, because it's immoral and you're too stupid to do so responsibly. But here, play our game, which is the only one you're allowed to play, and which has the worst odds on the planet."
When I started this thread I had hoped that the discussion would come from a webmastering perspective.
Look on the bright side, it will be years before the UK government catches up. Also, there's a whole world out there, not all of it speaks English so maybe webmasters need to invest in translation services and a little advertising.
One more word of advice though - the US/Bush are pussycats compared to Russia/Putin.
Kaled.
- "Not everyone will agree with you."
- "I've gotten used to that over the last 40 years."
LOL- just stop please!
'I don't remember reading a single cogent argument explaining how/why this decision is going to make people's lives worse.'
Why do most people play Poker? For fun and enjoyment. Let's take away all the things that people enjoy but are bad for them and see what happens.
Do the casinos affected use affiliate networks (CJ, Linkshare, Performics, TradeDoubler, etc), or do they use inhouse affiliate tracking software? Whatever affiliate management systems they use, will they scale back usage of those solutions?
Are the casinos and their affiliates large spenders in a)search marketing; b)banner advertising; c),d),etc, in which countries and where will they pull back the most on ad spend?
-Shorebreak
About the Law
To understand the law, it is necessary to understand precedent to this new “law”.
Interstate Wire Act of 1961, otherwise called the Federal Wire Act
It starts with:
Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.
While there is no real discussion as to whether Internet sports’ betting is illegal this law has been interpreted in different ways in relationship to gambling on games of chance and skill. The US Justice Department interprets the wire act as a law that bans all Internet gambling. This being said, in over ten years there has not been a successful case against non-sports related online gambling.
In 2001 the MasterCard international case which was decided by District Court Judge Stanwood R. Duvall. The decision was made on 33 cases where gamblers claimed they did not have to pay their credit card bills because the debt that they owed Master Card was for illegal gambling money. All 33 cases were dismissed.
Recently Antigua and Bermuda brought the US in for a WTO dispute over Internet gambling. From my understanding the case was because the US put Jay Cohen in prison for operating an Internet gambling business in Antigua. The resolution was declared a win by both parties. Later Antigua and Bermuda complained that the US was not complying with the WTO rulings
[washingtonpost.com...]
[news.com.com...]
[foxnews.com...]
This has left Internet gambling in “gray area” of the law up till now.
Unlawful Internet Gambling Enforcement Act
This law is an “Enforcement Act”. This means it is not supposed to be a new law. However, this new “enforcement act” expands the old bill considerably:
#1 It makes it illegal for financial institutions to transfer funds to an illegal online gambling site, including banks, Credit Card companies and 3er person parties like Neteller.
#2 (this one is especially important for webmasters) It makes it illegal to abet illegal Internet gambling including providing a hypertext link. So if I were to place a link here to an "illegal internet gambling site" I would be committing a crime.
The actual words used in the law for this were:
...."(c) LIMITATION RELATING TO INTERACTIVE COMPUTER SERVICES.----
"(1) IN GENERAL. --- Relief granted under this section against an interactive computer service shall ---
"(A) be limited to the removal of or disabling of access to, an online site violating section 5363, or a hypertext link to an online site violating such section, that resides on a computer server that such service controls or operates, except that the limitation in this subparagraph shall not apply if the service is subject to liability under this section under section 5367;
...
"5367 Circumventions prohibited
"Notwithstanding section 5362(2), a financial transaction provider, or any interactive computer service or telecommunications service, may be liable under this sub-chapter if such a person has actual knowledge and control of bets and wagers, and---
....
[saveonlinegaming.com...]
The law makes exemptions for regulated horse betting and state lotteries.
How this will effect online gambling
Online gambling is still legal for Americans. It will now only illegal to provide online gambling to Americans.
Reputable and/or publicly traded companies will no longer be able to operate in the US. This means some people who currently work for these companies are bound to loose their jobs. Not to mention the impact it will have on the world poker series. Online casinos like Golden Palace or Party Poker will no longer be able to buy advertising on the backs of boxers or on TV commercials. And the stockholders and the families of the stockholders of these publicly traded companies are loosing big time considering share prices have dropped 50%-70%.
Online casino, poker, bingo and other gaming fans will no longer be able to gambling online in legitimate places.
Many companies that are not publicly traded, don’t have operations in the US, and are not American owned will be able to continue to service the American public illegally. These “illegal” companies, will generally be subject to less scrutiny than the big publicly traded companies.
While it is true that of those “illegal” companies some will be legitimate businesses that will not scam players (after all the house ALWAYS wins), there will be many scammers that will get the money that would normally go to highly reputable companies.
Bottom line: Americans will continue to gamble, they will just get scammed a whole lot more often.
The Business Impact:
Estimated Amount Spent By Americans in Online Gambling: $6 Billion and growing
Up to very recently a large percentage of those 6 billion went to publicly traded companies; BetOnSports, 888, PartyGaming. And there are other public companies that are likely to pull out: Neteller and other software providers for the online gambling industry. While these companies can still subsist on non-American gambling, US online gambling accounts for 50%+ of all online gambling revenue. Party Gaming has around 60% US gamblers and 888 around 80%.
Countries that shelter gambling establishments: Costa Rica, UK, Gibraltar, Antigua and Bermuda, Netherlands Antilles, Curacao, Malta, Isle of Man, Australia, Russia, Panama, Belize, Venezuela, Saint Kitts and Nevis, Dominican Republic, Mauritius, and a few others. How much each country stands to loose in terms of employment and economical boost depends on the companies they shelter and the compliance these companies will enforce based on the new law. We will also have to see what impact this has on the way Americans gamble online (will they gamble less with the new law, or will it stay the same, or will it continue to grow).
Affiliates, industry workers and free lancers from all over the world; hundreds of thousands of people are going to be directly affected, I would dare say probably in the millions when it comes to indirect affects.
American affiliates, people’s earnings, some time in excess of 100,000 dollars a month, will now be illegal. Many American affiliates are desperately looking to expatriate, move offshore, sell their business, and in general, there is a heavy sense of panic in the industry.
International affiliates are having their accounts closed, but they will be able to continue promoting online gambling. The only problem for them is that it is likely that Americans will gamble less after the media uses this to scare the lambs.
Some Interesting Tid Bits:
-The act was added to a the end of the totally unrelated “Safe Port Act, HR 4954” (http://www.saveonlinegaming.com/hr49543.pdf ) which was sure to go through. It was added by the Republican Party in the last minutes before the election period recess. It was passed Friday, midnight.
-According to Sen. Frank R. Lautenberg (D-NJ), the last part of the Port Security act, the part with the unlawful internet gambling act, was not revised by any of the senators.
-This has been revised by the senate before and was rejected.
-I do not want to come up with theories and sound un-professional, but something smells like a rat when you do research as to the lobbying of this bill
-Many believe the US is doing this to bring the industry to its knees (which it has done successfully) only to then give special permissions to certain people to conduct “legal, approved” US internet gambling. Those special people may just be the big Vegas players (who’s stock has gone up thanks to this) who have also been providing lobbying for this law.
Disclaimer: I am not a lawyer and the information contained in this posts is meant to represent my point of view, and in no way should be interpreted as legal advise/information.
So if I were to place a link here to an "illegal internet gambling site" I would be committing a crime.
hypothetical questions...
What if someone has (non-affiliate) links pointing to an "illegal internet gambling site"? Say from an old link exchange or maybe they have a directory w/gambling section. Would that be illegal?
What if someone has a link (affiliate or not) pointing to a non-us co. which is not a "illegal internet gambling site" itself but may be an affiliate of such a site or otherwise connected to one?
What if someone has (non-affiliate) links pointing to an "illegal internet gambling site"? Say from an old link exchange or maybe they have a directory w/gambling section. Would that be illegal?What if someone has a link (affiliate or not) pointing to a non-us co. which is not a "illegal internet gambling site" itself but may be an affiliate of such a site or otherwise connected to one?
provided you don't make money of it, I doubt the Feds will, or can do anything about it. You can say, via linking, that this site has stolen credit cards, k_dd_e po_n, it's Bin Laden's site or whatever.
As always, this is JUST my opinion so take it with a grain of salt. Either way, I doubt it's worth more than $0.014. and I am biased :)
Next, I apologize for my poor choice in titling this thread, saying that "Congress banned Internet gambling", since that's not really what happened. It would have been much more accurate to say that Congress banned U.S. banks from handling online gaming transactions, which is pretty much moot since U.S. banks voluntarily got out of that business long ago on their own.
I've been looking more closely at the law, and I actually now don't see anything to specifically ban advertising by webmasters. The complete contents are:
5361. Congressional findings and purpose.
5362. Definitions.
5363. Prohibition on acceptance of any financial instrument for unlawful Internet gambling.
5364. Policies and procedures to identify and prevent restricted transactions.
5365. Civil remedies.
5366. Criminal penalties.
5367. Circumventions prohibited.
And the complete text of the relevant section, #5363, is:
No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling--(1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card);
(2) an electronic fund transfer, or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of such other person;
(3) any check, draft, or similar instrument which is drawn by or on behalf of such other person and is drawn on or payable at or through any financial institution; or
(4) the proceeds of any other form of financial transaction, as the Secretary and the Board of Governors of the Federal Reserve System may jointly prescribe by regulation, which involves a financial institution as a payor or financial intermediary on behalf of or for the benefit of such other person.
Where is there any prohibition here about accepting advertising? I don't see it. Perhaps the government could argue that receiving revenue-share payments as an affiliate violates (4), but that would seem to be quite a stretch.
The best analysis I've seen so far is from iGamingLaw.com. I'm also currently seeking professional legal counsel myself....
....
"(c) LIMITATION RELATING TO INTERACTIVE COMPUTER SERVICES.----"(1) IN GENERAL. --- Relief granted under this section against an interactive computer service shall ---
"(A) be limited to the removal of or disabling of access to, an online site violating section 5363, or a hypertext link to an online site violating such section, that resides on a computer server that such service controls or operates, except that the limitation in this subparagraph shall not apply if the service is subject to liability under this section under section 5367;
...
"5367 Circumventions prohibited
"Notwithstanding section 5362(2), a financial transaction provider, or any interactive computer service or telecommunications service, may be liable under this sub-chapter if such a person has actual knowledge and control of bets and wagers, and---
....
Read this carefully. From my limited understanding of the law, this makes it illegal for a webmaster to get remuneration from placing a link to a place that facilitates illegal online gambling transactions.
In any case, I am not a lawyer, so any hypothetical situations have to be discussed with a lawyer, who will be risking his career if he gives you bad advice. In fact, my advice would be not to take legal advice from a weird guy who calls himself greenleaves ;-). Ignorance is not an excuse for not complying with the law, and I don't know about you, but I never, ever want to wind up locked in a room with a touchy friendly guy named Bubba.
"Notwithstanding section 5362(2), a financial transaction provider, or any interactive computer service or telecommunications service, may be liable under this sub-chapter if such a person has actual knowledge and control of bets and wagers, and---
Does that mean anyone who links to an 'illegal site' is open to prosecution? Whether it's for financial gain or not?
