Friday, the DOJ shut down the three major online poker sites operating with players from the United States. There were eleven arrests of major players from the major poker sites, Full Tilt Poker, Poker Starts, Absolute Poker, and various payment processors with charges ranging from violations of the UIGEA, running illegal gambling operation, to money laundering. More arrests are sure to follow.
For those that don't know, in 2006, congress passed legislation making it illegal for banks and other financial institutions to move money to online poker sites. The legislation is called the UIGEA, Unlawful Internet Gambling Enforcement Act, which was passed by sneaking it into a Port Security Bill on the weekend before a major vote on that bill.
Most of the charges levied in this latest action revolve around the major sites trickery used to enable US players to bypass the UIGEA and move money on an off of their foreign operated sites. Note that it is not illegal for a player to play online, just for financial institutions to facilitate the movement of money that enables players to play online.
Friday was Black Friday for myself and millions of Americans who enjoy friendly skill based wagering over the internet. I am not a big player. Just an average guy who likes poker and finds it very convenient to play online rather than driving the hour to AC to play. Like the vast majority of online players, I understand my limitations and only gamble what I can afford to lose. To me poker is an intellectual challenge and a great way to spend a few hours rather than zoning out in front of the TV.
But the government has decided that I do not know how to manage my own money nor do I have the ability to control myself enough to not lose it all. This was mainly a Republican push in this case, but it is no different than any Democratic initiative to save me from myself.
America's game of poker is freely played online all over the world, but it can not be played in the US anymore. Seems silly to me. The land of the free and the home of the brave is scared of online poker. Go figure.
State and federal legislation is in the works to allow regulated online poker. Poker sites now operated offshore will be allowed to operate freely in the United States. Tax revenue will be generated. Regulations will be put in place to educate problem gamblers and to prevent minors from using the sites. I encourage anyone to support future legislation to legalize online poker.
In all likelihood, I expect no federal legislation to happen until after the 2012 elections. Maybe 2013 will be a better year.
Anyway, thanks for the opportunity to rant.
DOJ Seizes Online Poker Sites
I do not play online and I am nor against nor favorable. From a government point of view I guess all the issue is on the tax revenue.
Countries are not anymore willing to loose their share of the profit made online by the gambling companies, especially when standard tax revenues are free falling.
A sign of the changing times I guess.
Countries are not anymore willing to loose their share of the profit made online by the gambling companies, especially when standard tax revenues are free falling.
A sign of the changing times I guess.
This has nothing to do with drugs.
The laundering charges are related to moving money that was involved in illegal online gambling. Whether the online gambling was illegal is a matter of contention. The bank fraud to get allow the money transfers in the first place is pretty cut and dry illegal.
Anyway...
Countries where it is legal to play online poker:
China, Russia, South Korea, all of Europe, most of the rest of the world.
Two countries where you can't play online poker:
North Korea and the United States of America
Go figure.
The laundering charges are related to moving money that was involved in illegal online gambling. Whether the online gambling was illegal is a matter of contention. The bank fraud to get allow the money transfers in the first place is pretty cut and dry illegal.
Anyway...
Countries where it is legal to play online poker:
China, Russia, South Korea, all of Europe, most of the rest of the world.
Two countries where you can't play online poker:
North Korea and the United States of America
Go figure.
I hate gambling and I do not gamble. I have plaid poker for pennies before, but that is it.
I detest casinos and all that. They only want you as a client if you loose. If you have figured out a way to win (e.g. the double up method at roulettem or counting cards), they will kick you out.
So to me gambling, be it online or in RL is fraudulent by principle.
Plus, so many people get addicted. Gambling is legal here and we have more gambling places in my hometown than family restaurants. So many ruined existences that cant stop wasting their money on these machines.
I hate that with every fibre of my being and I cant have respect for the people that make money of that.
I detest casinos and all that. They only want you as a client if you loose. If you have figured out a way to win (e.g. the double up method at roulettem or counting cards), they will kick you out.
So to me gambling, be it online or in RL is fraudulent by principle.
Plus, so many people get addicted. Gambling is legal here and we have more gambling places in my hometown than family restaurants. So many ruined existences that cant stop wasting their money on these machines.
I hate that with every fibre of my being and I cant have respect for the people that make money of that.
@seedload
Not true.
In most of Europe if you want to operate an online poker website you need to get licence from each state where you intend to operate.
In Italy as example it costs about 400.000 Euro (a little bit more than half a million USD).
Post police regularly issues blacklists of IP addresses of websites that operate poker or bet websites in Italian language and do not have an Italian licence. By law Internet providers are obliged to enforce these blacklists.
It's the same all over Europe, except maybe a couple of states.
As it has been said, is all a matter of money.
@Skipjack
Yes, for me is the same. Plus I can't stand the hypocrisy of the government that renders something illegal just because they cannot get money out of it and when they get their share they do not care about the direct and indirect consequences.
See smoke, Alcohol, Lotteries and so on.
Not true.
In most of Europe if you want to operate an online poker website you need to get licence from each state where you intend to operate.
In Italy as example it costs about 400.000 Euro (a little bit more than half a million USD).
Post police regularly issues blacklists of IP addresses of websites that operate poker or bet websites in Italian language and do not have an Italian licence. By law Internet providers are obliged to enforce these blacklists.
It's the same all over Europe, except maybe a couple of states.
As it has been said, is all a matter of money.
@Skipjack
Yes, for me is the same. Plus I can't stand the hypocrisy of the government that renders something illegal just because they cannot get money out of it and when they get their share they do not care about the direct and indirect consequences.
See smoke, Alcohol, Lotteries and so on.
I don't play games of chance (except the rare lottery ticket). Games of chance where the house makes money because of a mathematical edge are much different than poker.Skipjack wrote:I hate gambling and I do not gamble. I have plaid poker for pennies before, but that is it.
I detest casinos and all that. They only want you as a client if you loose. If you have figured out a way to win (e.g. the double up method at roulettem or counting cards), they will kick you out.
So to me gambling, be it online or in RL is fraudulent by principle.
Poker is played against other players and the house takes rake - a fee for facilitating the game. In poker, the house wants you as a client whether you win or lose.
Anyway, I am talking poker, a game of skill played against other players, not roulette. Clearly, I feel there is a distinction.
Skipjack wrote:Plus, so many people get addicted. Gambling is legal here and we have more gambling places in my hometown than family restaurants. So many ruined existences that cant stop wasting their money on these machines.
I hate that with every fibre of my being and I cant have respect for the people that make money of that.
I am not clear why you start by saying "not true" and then explain how it is perfectly legal to operate an online site in Italy and all over Europe.Giorgio wrote:@seedload
Not true.
In most of Europe if you want to operate an online poker website you need to get licence from each state where you intend to operate.
In Italy as example it costs about 400.000 Euro (a little bit more than half a million USD).
Post police regularly issues blacklists of IP addresses of websites that operate poker or bet websites in Italian language and do not have an Italian licence. By law Internet providers are obliged to enforce these blacklists.
It's the same all over Europe, except maybe a couple of states.
As it has been said, is all a matter of money.
The point is that you can't buy a license in the United States.
For the US, I support regulated online poker, with tax revenue generated that goes to the government and protections in place that guard against underage play and regulate site security. Yes, licensing would be required.
Sorry, I do not think you are correct. It is not illegal to play poker on line in the US, just illegal to send $ overseas to do it. At least that is what I have read. And the reason it is illegal to send money overseas to do it??? All "laundering" issues relate to drugs, AFAIK. So, it is drug related. Is it ONLY drug related? Maybe not, but...seedload wrote:This has nothing to do with drugs.
The laundering charges are related to moving money that was involved in illegal online gambling. Whether the online gambling was illegal is a matter of contention. The bank fraud to get allow the money transfers in the first place is pretty cut and dry illegal.
Anyway...
Countries where it is legal to play online poker:
China, Russia, South Korea, all of Europe, most of the rest of the world.
Two countries where you can't play online poker:
North Korea and the United States of America.
Go figure.
Probably i was not clear enough.seedload wrote:I am not clear why you start by saying "not true" and then explain how it is perfectly legal to operate an online site in Italy and all over Europe.Giorgio wrote:@seedload
Not true.
In most of Europe if you want to operate an online poker website you need to get licence from each state where you intend to operate.
In Italy as example it costs about 400.000 Euro (a little bit more than half a million USD).
Post police regularly issues blacklists of IP addresses of websites that operate poker or bet websites in Italian language and do not have an Italian licence. By law Internet providers are obliged to enforce these blacklists.
It's the same all over Europe, except maybe a couple of states.
As it has been said, is all a matter of money.
The point is that you can't buy a license in the United States.
For the US, I support regulated online poker, with tax revenue generated that goes to the government and protections in place that guard against underage play and regulate site security. Yes, licensing would be required.
When I say that you need to buy I licence it means that you actually need to incorporate a company in Italy that has to handle all bets from the players, as the licence cannot be sold to non resident companies.
So the Italian company has to pay the 400K euro in advance and than they must handle all the transactions of the Italian gamblers.
On the gamblers transactions there is a percentage of fixed taxation (that is not depending on company profit or loss) plus standard tax on profit.
Some website calculated that around 70% of the money spent online by gambling in Italy ends up into the government coffins.
The same should be in the USA as far as i know.
Exactly. The reason is that if you send money abroad they are not getting their share of the pie.KitemanSA wrote:Sorry, I do not think you are correct. It is not illegal to play poker on line in the US, just illegal to send $ overseas to do it. At least that is what I have read. And the reason it is illegal to send money overseas to do it??? All "laundering" issues relate to drugs, AFAIK. So, it is drug related. Is it ONLY drug related? Maybe not, but...seedload wrote:This has nothing to do with drugs.
The laundering charges are related to moving money that was involved in illegal online gambling. Whether the online gambling was illegal is a matter of contention. The bank fraud to get allow the money transfers in the first place is pretty cut and dry illegal.
Anyway...
Countries where it is legal to play online poker:
China, Russia, South Korea, all of Europe, most of the rest of the world.
Two countries where you can't play online poker:
North Korea and the United States of America.
Go figure.
KitemanSA wrote:Sorry, I do not think you are correct. It is not illegal to play poker on line in the US, just illegal to send $ overseas to do it. At least that is what I have read. And the reason it is illegal to send money overseas to do it??? All "laundering" issues relate to drugs, AFAIK. So, it is drug related. Is it ONLY drug related? Maybe not, but...seedload wrote:This has nothing to do with drugs.
The laundering charges are related to moving money that was involved in illegal online gambling. Whether the online gambling was illegal is a matter of contention. The bank fraud to get allow the money transfers in the first place is pretty cut and dry illegal.
Anyway...
Countries where it is legal to play online poker:
China, Russia, South Korea, all of Europe, most of the rest of the world.
Two countries where you can't play online poker:
North Korea and the United States of America.
Go figure.
Prior to 2006, the DOJ maintained that internet gambling was illegal because of something called the wire act, the same thing that makes it illegal to take sports bets over the telephone. However, the law was not clear and there was much contention in this area.
In 2006, legislation called the UIGEA was passed, tacked onto a port security bill, that specifically tried to outlaw internet gambling, not by making it illegal to gamble on the internet, but by making it illegal for financial institutions to transfer money to gambling sites, both domestic and abroad. The law did not make it illegal to play poker, just for financial institutions to move money to gambling sites - in that you are correct. It is not illegal as an individual to place online wagers nor is it illegal for individuals to use available means to move money onto sites - it is only illegal for financial institutions to participate in moving money.
The reason the law was enacted in this way was to make internet gambling impossible in a way that could be reasonably enforced. Financial institutions were given the responsibility of monitoring transactions and gambling sites were basically required to properly identify themselves to the banks. Initially, banks said that this was a lot of burden on them, so there was a bit of a grace period until they could figure out how to do it properly. Last year, that grace period ended.
The fraud in the charges results from poker sites not properly identifying themselves to the banks (pretending to be something else) and with some financial entities ignoring the law as part of a conspiracy with the poker sites. The laundering comes out of that too. When you hear laundering, it is natural to assume drugs, but in this case the laundering charges are saying that the sites were operating illegally to begin with and the laundering has to do with the subsequent movement of the spoils of that illegal operation.
Now, laundering of illegal moneys (such as from drugs) has always been part of the argument against allowing internet gambling, but it is a real long stretch to claim that it is the primary reason behind the UIGEA. It isn't. And it isn't part of the legislation. If you really wanted to fight laundering of money through online sites, you would license them domestically with regulations that required reporting of the movement of money to and from the sites and between players - making the sites domestic and grabbing some tax revenue in the meantime. Just saying....
The UIGEA wording itself claims that it is not a laundering bill, but exists alongside of AML (anti-money laundering) legislation. Further, it is up to the banks to implement either as part of those processes or separate from them.
"Relationship to Bank Secrecy Act/Anti-Money Laundering compliance. The preamble to the rule notes that participants may implement due diligence procedures by incorporating them into existing account-opening due diligence procedures, for example, under Bank Secrecy Act/anti-money laundering (BSA/AML) compliance processes. However, regardless of how and where within its compliance function or management structure a financial institution chooses to place responsibility for UIGEA compliance, UIGEA compliance is separate and independent from the legal scope of BSA/AML requirements, the BSA/AML program rule, and examination mandates for BSA/AML compliance programs. Compliance with UIGEA does not fulfill any other compliance requirements, including, for example, requirements to file Suspicious Activity Reports (SARs). If any depository institution suspects that a customer is processing illegal transactions, including restricted transactions, through the depository institution’s facilities, the depository institution should file a SAR with the appropriate authorities."
Now, the real reason that the law was passed is some right wing republicans thought that internet gambling was bad, couldn't pass a bill on its own (it had failed multiple attempts on its own), and therefore slipped it into a port security bill on a weekend with a vote scheduled on a Monday. Most people who voted on the Port Security bill didn't even know that the internet gambling stuff was in there. Those that did know it was slipped in had very little choice but to vote yes anyway, because what politician in their right mind would get caught voting against port security.
If they were worried about their share of the pie, then they would legalize it domestically and tax it, which is very easy. They aren't worried about getting a share of the pie. They don't think anyone should have pie.Giorgio wrote:Exactly. The reason is that if you send money abroad they are not getting their share of the pie.KitemanSA wrote:Sorry, I do not think you are correct. It is not illegal to play poker on line in the US, just illegal to send $ overseas to do it. At least that is what I have read. And the reason it is illegal to send money overseas to do it??? All "laundering" issues relate to drugs, AFAIK. So, it is drug related. Is it ONLY drug related? Maybe not, but...seedload wrote:This has nothing to do with drugs.
The laundering charges are related to moving money that was involved in illegal online gambling. Whether the online gambling was illegal is a matter of contention. The bank fraud to get allow the money transfers in the first place is pretty cut and dry illegal.
Anyway...
Countries where it is legal to play online poker:
China, Russia, South Korea, all of Europe, most of the rest of the world.
Two countries where you can't play online poker:
North Korea and the United States of America.
Go figure.