US Outlaws Online Gambling

imaginaryelf writes, "As reported earlier on Slashdot, in the closing hours of the US Congressional session on Friday, September 29, the Unlawful Internet Gambling Enforcement Act of 2006 (H.R.4411.RH) was attached to the Safe Port Act of 2006 H.R.4954.EAS. To the surprise of many, the bill passed both the House and the Senate, and Bush is expected to sign it into law this week. This effectively outlaws online gambling in the US, by way of making it illegal for credit-card companies to collect payments for bets. The financial markets punished the stock of online gambling companies as some prepared to pull out of the US entirely."

hooray.

Thank God the congress knows how to protect me from the evil casinos! Four more years!

Re:hooray.

Yep, it's funny for those of us who can think for themselves. But don't forget the people outside of Slashdot, many of whom cry because they simply cannot maintain control of their finances or their own life.
These are the people that want the government to protect them from all the bad things, and lobby and vote accordingly. I'd be a lot more liberal if I knew people would still be responsible for their actions. But I know that's not going to be the case.

I live in Southeastern Connecticut, home of Foxwoods and Mohegan Sun casinos. I visit both regularly, simply because of the restaurants and other offerings. I don't gamble at all. However, I constantly see the people with tattered clothes sitting at the machines, the mother with her 6 year old sleeping on the carpet next to her at 2 AM. I see the signs mounted on all the pay phones with the free # for the gambling addiction hotline... which are there only after lobbying pressured them.

The average American owes thousands to credit card debt already. I'm not saying it's right, but I'm saying it's a prime example of how people will piss and whine to politicians about the things they don't like rather than make conservative decisions in life. The same people want schools to raise their children for them. And they want the government to protect them from themselves.

You'd be surprised how many people will be happy that online gambling is effectively shut down. And it's probably not going to be the moral conservatives who speak the loudest in favor of it.

Re:hooray.

Question #1: "Should the federal government prevent Americans from playing poker?"

YES NO DON'T KNOW REFUSED
5% 90% 4.5% 0.4%
49 868 43 4

Question #2: "Should the federal government prevent Americans from playing poker in Las Vegas?"

YES NO DON'T KNOW REFUSED
5.5% 90.7% 3.3% 0.5%
53 874 32 5

Question #3: "Should the federal government prevent Americans from playing poker in Casinos on Indian Reservations?"

YES NO DON'T KNOW REFUSED
8.3% 86.6% 4.6% 0.5%
80 835 44 5

Question #4: "Should the federal government prevent Americans from playing poker for charitable fundraisers?"

YES NO DON'T KNOW REFUSED
8.1% 86.9% 4.4% 0.6%
78 838 42 6

-Page 1 of 2-

Question #5: "Should the federal government prevent Americans from playing poker on the Internet?"

YES NO DON'T KNOW REFUSED
18% 74.2% 7.4% 0.4%
174 715 71 4

Question #6: "Should the federal government prevent Americans from playing poker in the privacy of your own home?"

YES NO DON'T KNOW REFUSED
3% 94.7% 1.8% 0.5%
29 913 17 5

Question #7: "Do you believe the federal government should be managing Americans gambling behaviors on the Internet?"

YES NO DON'T KNOW REFUSED
26.9% 66.1% 6.4% 0.6%
259 637 62 6

Re:not necessarily bad

The hypocracy! Aren't these the same people yelling 'Global Economy' at the top of there lungs, and signing free trade agreements with every country that has cheap labor. I guess the world economy only counts if it give the U.S. and advantage.

Re:not necessarily bad

As a Canadian, we've learned the hard way that free trade = americans trade for free. Numerous appeals panels over the past decade have consecutively proven that Canada does not unfairly subsidize our softwood lumber, yet there's a huge tariff imposed at the border. We won all the appeals, and guess what? US policy is basically 'you can't make us stop'. WTO takes years (decades?) to allow for counter-duties and tariffs, which essentially peanlises your own citizens for unfair trade practices.

So while American lumber continues to destroy spotted owl habitat, all the cheap + BETTER QUALITY lumber (words of the US housing industry, not mine) remains unharvested. Congrats american consumer - you lose too!

The US always has, and always will, be a big bully on the global economic scene. The question now is whether that advantage trickles down to the american consumer, or if the new robber barons can re-establish their hoovervilles.

Re:not necessarily bad

I don't see a legitimate reason for gambling to be illegal. If someone wants to gamble, smoke, shoot themselves in the foot, or whatever, let them. And no, you don't have to force everyone else to support a safety net for them in the form of (publicly funded) rehab or health care. As for the "think of the children" bunch: if they have kids whom it's negatively impacting, take them and give them to someone who can take care of them.

Re:not necessarily bad

Offshore internet gambling isn't taxed. There's the reason they want to block it.

Re:not necessarily bad

Why should the U.S. allow foreign companies to suck money out of the U.S. economy

Because that's what The People want? Does there need to be any other reason?

Remember, government derives its power from the just consent of the governed.

Re:

You're looking at the problem in reverse. The reason these companies are off-shore is because of the laws in place by the US. Its like me trying to open up a winery during the prohabition. It'd be plain stupid. Why would these people host gambling sites in

It will never stick

5 will get you 10 they won't enforce it.

impact on gambling stocks

"The financial markets punished the stock of online gambling companies as some prepared to pull out of the US entirely."

I bet they did. Shit, someone's knocking at my door.

Sour Grapes

Congress is just upset that they can't effectively tax online gambling because most of the companies are offshore. It's a case of sour grapes - if we can't tax it, you can't do it!

Re:Sour Grapes

Actually, many of the U.S.-based casinos have been advocating for regulated online gambling which would allow for the US government to tax the industry. Companies like MGM would like to open up gambling sites but can't. Even UK-based companies have stated that they'd be more than willing to pay taxes to operate legally in the US.

Re:

Several of the large companies operate out of the UK. In fact, the executives of these companies are BEGGING the Congress to regulate the industry (regulate != shutdown). Who ever heard of an industry that's willing to pay taxes? But that was all tossed aw

Re:Sour Grapes

I disagree. Congress already has an effective manner to tax all forms of gambling, in that even though the IRS wouldn't be able to collect from the casino, individuals would still have to report their winnings to them on the 1040. The IRS will still collect, just not as much.

However, I see this as mostly about competition with brick&mortar 'destinations'.

Without a monopoly on gambling, where would Las Vegas be? Without Las Vegas, where would Nevada be?

I feel that this business model monopoly is the real reason. If you could gamble from home, you would be less motivated to visit such locations, and that would hurt other industries. The money made from the tax on actual gambling (from both casinos & patrons), while significant, is a fraction of what would be lost overall if these destinations were to lose their monopoly status. At a minimum, you'd need to also account for the sales tax lost on gas/travel, lodging & dining when doing the comparison.

And finally, include the number of voters that are employed by these industries. That number is the real currency in politics.

Anyway, there's more to this than just reduced gaming-tax revenue.

(Sorry if this post is oddly written - I blame it on the caffeine)

Damn, Gotta Love the Wording.

According to the bill's title, the act was already illegal and all it is doing is enforcing it. If that's the case, why was a bill needed? Shouldn't it have been law enforcement's problem?

Shifting responsibilities

Since the bill will make it illegal for credit card companies and other financial institutions to be involved in such transactions, it seems to be a refinement of target. Formerly the individual could be targeted, but that would be expensive and ineffective. Ten thousand charges could be brought forth without impacting the number of violations significantly.

If you shut down the payment options, you will greatly reduce the number of violators. It's an effective way of achieving their goal.

Does this affect trying to get money out?

The Way I understand it is, you put in some money and play with that. Will they now block being able to get your money back out. And with online casinos looking to close their US operations will they just take the money in these accounts with them?

Politically incorrect and I don't care

Why couldn't our nation have been started by someone cool instead of a bunch of lame Protestants.

Re:Politically incorrect and I don't care

Actually, most of the 'founding fathers' who formed our original government and signed the Constitution were Deists [sullivan-county.com]. Even the ones who were Protestant would have vilified the current group that calls themselves conservatives. You can point your outrage at much more recent [slate.com] revisionism.

Re:Politically incorrect and I don't care

Why couldn't our nation have been started by someone cool instead of a bunch of lame Protestants.

The liberal media would have you believe that Christopher Columbus was the first to settle America, but that honor really belongs to The Fonz. He edged out Grover Washington to be our first president, but declined once he found out that he couldn't have all three Hooper Triplets as his first ladies.

Fun Fact: The indian greeting "how" is derived from The Fonz's "heyyyyyyy".

its all about protectionism

A brick and mortar casino gaming license wouldn't be quite as lucrative a give away to the wealthy and well connected if they had to compete with online casinos that anyone can set up overseas. Lets face it, a legal casino in an area where gambling of most forms is illegal is basically an ATM machine with flashing lights.

In my state the hypocrisy is reaching new heights as the GOP governor continues to try to allow slot machines at horse tracks while it is still technically illegal to play poker among friends.

Affects eBay and PayPal/

Does this mean they're going to take down eBay and PayPal?

I certainly feel like I'm gambling whenever I do business there?

How about Ameritrade? Stocks are certainly gambling

it's so sad...

the the legislature of my country is so incompetant, to get something they want passed, they have to tack it on to something completely irrelevant.

Gotta love the system...

How on earth is it legit to tack a completely unrelated bill to another and pass them both under the same vote? Am I the only one who sees how unbelievably insane that is?

Surely anyone voting against the bill will be blasted for not securing US ports, even when it was a vote in protest to the anti-gambling legislation.

The way the US government goes around telling the world how to run their 'democracy' is so incredibly laughable at this point.

Re:Gotta love the system...

Yup it's a common scheme in Washington and it is one of the most corrupt things that needs to be fixed. Between term-limits for Congress and a new rule that says only one topic can be addressed per bill, I think we could stamp out a large part of Congressional corruption and pork spending.

Re:Gotta love the system...

The way the US government goes around telling the world how to run their 'democracy' is so incredibly laughable at this point.

"at this point"? Dude, just because you've finally opened up your eyes to see it doesn't mean it's new. This has been going on for a long time.

Don't act like 90% of what slashdotters bitch about and pin on Bush is "new", it's just the fact that something has you pissed off and you finally are starting to see what has pissed the rest of us off for so long. What's the saying about those who forget the past? What about the ones that never knew the past?

The unfortunate thing? by the time the Dems take back power a new generation is going to be moving in and getting pissed at the same exact antics under a new banner and they're going to be saying the same thing and voting against President X thinking that the other side wouldn't do the same thing because they were too young/naive to remember the last time the other party did the same thing. It's a piss poor cycle of events and there will never be serious reform as long as people keep seeing politics on this same level.

Sick of that bullshit tailcoat riding they do

More than anything, this is a prime example of how members of Congress manipulate the legislation system to get a bill they want pass to ride on the coattails of a 'sure-win' bill. Then after that they basically pass the buck off to the courts (if it ever makes it that far) to overturn the law or declare it unconstitutional or whatever.

I think its about time that Congress get off their lazy asses and start drafting their own bills for the particular agenda items they have. This sort of manipulative behavior itself should be outlawed, but find me a single member of Congress that would vote to outlaw it. In a system where checks and balances are supposed to exist, they certaintly don't here.

Wow

I'm frankly surprised that the credit card lobby didn't kick up a bigger fuss on this. They stand to lose millions in user fees and interest. While I think anyone that gambles on credit is a fool, the credit companies were happy to enable such behaviour.

Not To Open A Can of Worms, But MMOG?

So, if I pay $15 a month to subscribe to a massively multiplayher game where I get some amount of starter virtual currency, and the game has as a subset of functionality a mechanism through with I can gamble my virtual currency, and a mechanism exists to transfer that virtual currency into real currency through eBay sales or some process officially allowed or even serviced by the massively multiplayer game maker, is my subscription illegal?

Not so bad

This doesn't really matter all that much. It means that US banks and credit card companies can't process the transactions. Companies like Firepay [firepay.com] are off shore banks that can accept lawful deposits from US banks and then in turn handle gambling related transactions.

The law doesn't impose any penalties to gamblers so there's nothing illegal about taking any winnings by using the offshore banks to funnel those winnings back to a US account.

The problem is it's just harder now for the average player to make a deposit. I think in the long run this will be better for the above average players by keeping the degenerate gamblers out.

The new 419...

Hello Sir, My name is Jacob, and I am a wealthy businessman from the United States. New laws by my government have removed my freedom to gamble my money online. I have $40 millions that I would like to use for to gamble, but unfortunately may not use a United States banking account. If you would send me your bank account information I will deposit this funds. I need you to transfer this funds to an online gambling site. In return, you may keep $2 million. I selected you especially for this task. Please reply quickly, my gambling habit is giving me fits!!! Sincerely, Jacob Rich U.S. Businessman Moneys! Come rollin' in!!!

I'm an ok poker player

Its not as much gambling as it is a game. Now slots and stuff are made to take your money, but a good poker player can make a living.

Credit cards were already blocked

Credit cards were already not accepted. This bill is aiming to stop banks from transfering money to online gaming services via Firepay, Neteller, etc. It requires a coding scheme for ETF transfers be put in place to "code" the purpose of each transaction. And it's sort of weird, really, given that if I send $x to Neteller, and I'm not specifying a purpose at the time - since they will hold funds - how can that be enforced? It remains to be seen whether this can effectively do anything at all other than burden the US banking system with an ineffective regulation which costs millions or billions to implement.

Also, it wasn't a surprise that the legislation PASSED - the Port Security bill was getting passed, period. What IS surprising is that Frist managed to attach this to it. Democrats were trying hard to attach relevant amendments, like a measure to increase security of the rail transit system. These amendments were all rejected, yet Frist manages to get his "pander to the religious right" amendment attached? The mind boggles.

Anyhow, there's a good analysis of the bill reposted here [twoplustwo.com], which includes:

The great unknown is how far into the Internet commerce stream federal regulators are willing to go. 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?

Yawn

(A) IN GENERAL- The term `unlawful Internet gambling' means to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.
(B) INTRASTATE TRANSACTIONS- The term `unlawful Internet gambling' shall not include placing, receiving, or otherwise transmitting a bet or wager where--
(i) the bet or wager is initiated and received or otherwise made exclusively within a single State;
(ii) the bet or wager and the method by which the bet or wager is initiated and received or otherwise made is expressly authorized by and placed in accordance with the laws of such State, and the State law or regulations include--
(I) age and location verification requirements reasonably designed to block access to minors and persons located out of such State; and
(II) appropriate data security standards to prevent unauthorized access by any person whose age and current location has not been verified in accordance with such State's law or regulations; and
(iii) the bet or wager does not violate any provision of the--
(I) Interstate Horseracing Act;
(II) Professional and Amateur Sports Protection Act;
(III) Gambling Devices Transportation Act; or
(IV) Indian Gaming Regulatory Act.
* * *
(E) INTERMEDIATE ROUTING- The intermediate routing of electronic data shall not determine the location or locations in which a bet or wager is initiated, received, or otherwise made.

Whatever. You can thank the boundaries of the Interstate Commerce Clause for defanging this beast. Expect gambling sites to set up bank accounts in each of the states where online gambling is legal under state law, and direct all traffic from gamblers in a state to servers in that state. This accounts for most if not all states.

All this law does is make internet gambling sites shell out a few (hundred) thousand dollars for server upgrades and a minor software patch. Yippee.

Re:Circumvention

The only drawback I can see is you might end up in an offshore prison [wikipedia.org] without access to a lawyer or any due process, since the only reason you would do this is to fund terrorist attacks, right?

Re:

> What am I missing?

Money laundering laws. The gist being that they don't care what middlemen your money goes through, it's the endpoints that count.

Re:Circumvention

What am I missing?

The fact that the NSA and IRS keep a close eye on all bank transactions between U.S. citizens and foreign banks to look for money-laundering?

-Eric

Re:Worse Problem

I read through the text of the law (Yes, I'm very bored), and it looks like it defines wagers specifically as those that are based on chance (i.e. roulette, cards, etc) or a single competition (i.e. betting on a football game).

It excludes things that are based on statistical returns (They're allowing stuff like fantasy football), and a few other things.

So I don't think it covers the stock markets.

Re:Worse Problem

Anyone want to bet that online casinos will be targeted by this law, but Wall Street will remain strangely exempt?

Didn't you read the article? Betting online is illegal...

Re:

Well, your rights were being trampled before, and now they closed the loophole by which you were able to secure your right to waste your money. Gambling is stupid, no doubt (you WILL lose), but you SHOULD have the right to make your own stupid decisions.

Re:I'm having a hard time caring...

YRO aside, it is currently illegal is gamble in most of the United States anyway, except certain states and indian reservations. So, in this case, I don't really feel that anyone's "rights" are being trampled

Rights do not depend on laws; either to grant said rights, nor can rights be revoked by law. If something is a right then it's something
you can do without asking anybody's permission, period. You can voluntary accept the authority of some entity (maybe called "government" or something) to restrict *your* rights if *you* want to, but don't make the mistake of assuming that govt. has any inate authority to restrict anyone else's rights.

As such, I will say that free people have a "right to gamble" and have most likely never granted the United States government - or any other government - any authority to restrict it. As far as I'm concerned, any law restricting gambling is invalid, null and void and should be ignored.

Basically it goes back to the old saw... "We have exactly as much freedom as we are willing to demand and as we can defend."

Re:

YRO aside, it is currently illegal is gamble in most of the United States anyway

Rubbish. It's currently illegal to gamble on certain outcomes (sports, card games, etc.), while being legal to gamble on other outcomes (share prices, for example). It's a co

Re:

Actually, gambling is legal in most states (ever heard of your state lottery?... many states also allow casinos) althought it is highly regulated.

The issue is that online gambling is not regulated by the US or US states and is in competition with US com

37 states allow gambling

According to http://www.polocenter.com/travel/lotteriesus.htm [polocenter.com] there are currently 37 states that allow gambling. They call it a 'lottery' but it's really just a glorified numbers racket. That doesn't stop the states from operating them, now does it?

If the federal government is in the business of outlawing gambling, they should do it across the board. Otherwise, they should stick to matters within their charter - national defense, negotiating international treaties, and protecting interstate commerce.

Re:I Feel so much safer

It just so happens that a promo is going on that gives the user 100 free 'tokens' when they purchase a shirt.

And how do you get your winnings out, Kreskin?

Another free shirt?

Pass.

Re:I Feel so much safer

Why not just do what they do with Pachinko [wikipedia.org] in Japan?

Under Japanese law, cash cannot be paid out, but there is virtually always a small exchange centre located nearby (or sometimes in a separate room from the game parlor itself) where players can conveniently exchange tokens for prizes for cash. Such pseudo-cash gambling is theoretically illegal but from the sheer number of pachinko parlors in Japan it is clear that the activity is at least tacitly tolerated by the authorities.

You buy some tokens, you play with the tokens to win more tokens, you spend those tokens to buy a thing - a special, completely worthless thing, that can only be bought at the game parlor. You go outside, turn the corner, and sell the thing to a shop which is bizarrely interested in the thing, and is more than happy to buy it from you. At the end of the day, this shop then sells these special things back to the Pachinko parlor, who restocks them.

Re:I Feel so much safer

Actually, the issues are:

That the government is not my mommy; ethically the government has no right to say what I can do with my own money until I directly use that money to hurt another citizen or it is extremely clear that I intend to do so; legally the government has no right to say anything at all with regard to gambling, because I never gave it any such right, nor have I authorized anyone to do so for me. The government is out of control, operating illegitimately, unconstitutionally, unethically, and "compliance enforcement" is in fact coercion backed by enormous, life-ruining power.

Re:I Feel so much safer

You're both kind of funny in the head. Here's the way I see it. You buy the T-shirts and collect lots of them. Then you become a regional rep for the T-shirt sales and tell others how they can buy the T-shirts fr