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Poker News | Gambling and the Law

Unlawful Online Gaming Bill Analyzed

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With the Unlawful Online Gaming Bill passed, many online poker rooms have turned to their lawyers to explain the impact this legislation will have on their revenues and policies. Several of those, most notably Party Poker and Pacific Poker, have issued statements saying that they are suspending their business in the USA.

In the background of legal online poker room panic, one of the most authoritative gambling law specialists, Professor I. Nelson Rose has written a thorough analysis of the The Unlawful Internet Gambling Enforcement Act of 2006, pointing out several places in this bill which make the law very difficult, if not impossible to enforce. This might be a saving straw for US players, as many of the Bill‘s paragraphs are quite obscure. In his latest work, Gambling and the Law®: The Unlawful Internet Gambling Enforcement Act of 2006 Analyzed, he dissects the Unlawful Online Gaming Bill bit by bit, showing that this law is too obscure to pose real danger to US players. Below are excerpts from this analysis.

As I. Nelson Rose points out, "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."

As American banks will have to sort out the lawful and unlawful bets, billions of dollars might be required to implement a paper-check reading system. With NETeller, however, the situation is quite different. As Prof. Rose indicates, „The Act requires institutions like the Bank of America and Neteller to i.d. and block transactions to unlawful gambling sites, whatever they are. But, while the 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?"

„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."

„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."
All in all, is the Unlawful Online Gaming Bill so obscure that even after the law will have passed President‘s hands, US players will still play poker online?

© Copyright 2006, all rights reserved worldwide. GAMBLING AND THE LAW® is a registered trademark of Professor I Nelson Rose, .

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