For ONLINE players

[fmhealth]

Could be the harbinger of things to come.

http://www.nytimes.com/2009/06/10/business/10poker.html?_r=1&th&emc=th

[ryesteve]

... but ADWs aren't illegal...

[Watcher]

When the UIGEA (Unlawful Internet Gambling Enforcement Act) was piggybacked on the Safe Port Act in October 2006, the night before Congress was to break for recess, it exempted horse racing. Horse racing was classified as a game of skill rather than chance, which allowed it be excluded from the bill.

The bill came as part of a revival of the 1961 Wire Act which made it illegal to place bets, specifically sports bets, via the telephone. It was argued that poker, casino, and sports betting over the internet traveled through telephone wire and were thus were still considered to fall under the original Wire Act.

Many online poker companies were furious that horse racing received an exemption, attributing their carve-out to a more advanced and well funded lobbying corp.

[slew101]

All the online companies that offer horse racing wagering based in the U.S. are 100 percent legal.

[BIG49010]

Citibank, now owned by the U.S. Gov. need to figure out how to pay back the TARP funds, this must be how they are going to do it.

[cj]

All the online companies that offer horse racing wagering based in the U.S. are 100 percent legal.

Yes and no. Some states certainly don't agree.

[Rapid Grey]

Offsore/online gambling sites are notorious for bouncing checks or delaying payments. Took me two months to get a check out of Betus.com and just about that long from Sportsbook.com, and these were only around $800, can only imagine if it was 8K.

[slew101]

That's true, but you are at no risk of losing funds if you wager with a U.S.-based online horse betting site.

if you play offshore, you are at some risk depending on the book.

Yes and no. Some states certainly don't agree.

[lamboguy]

there is nothing legal about wagering with the boys down in costa rico, belize, jamaiica, aruba, st. martin's or any of those other exotic islands. if you wager with them you are flat out breaking laws these days.

betfair bought TVG. i am sure they have some type of master plan behind them into why they bought them. right now if you bet with betfair you are breaking us laws. i know there are plenty that do by going thru their friends in canada. it truly amazes me how sometimes the betfair outhandles the actual host tracks.

[Hajck Hillstrom]

It all comes down to Uncle Sam getting his dime. Onshore horseracing is pretty secure.

[Watcher]

Again, onshore horse racing via licensed US-based pari-mutuel outfits is legal, via a carve-out in the UIGEA that passed in 2006 when it was piggybacked on the Safe Port Act. Read one of the last amendments if you wish.

Betting with an off-shore site that houses racing, sports, casino, etc. is illegal. Getting payments from some of these sites is suspect, but not from the larger sites like Full Tilt Poker.

It was Neteller, and online payment processor based out of Canada, that was tied up with a Department of Justice investigation that led to 10-months of frozen funds for US-based clientele. Many of us having large, large sums in limbo.

[fmhealth]

Watcher, FullTiltPoker.com was one of the sites specifically mentioned in this article. Perhaps racing is handled differently than poker. But I would be very careful not to get caught in this ever-expanding web.

[slew101]

The offshore books' attraction is their rebates. But despite that, it's not worth the risk playing horses offshore when you can do it legally in the U.S.
Offshore books also limit exotic winnings, so especially big-time players should not risk their money offshore.

[slew101]

Poker playing offshore is also illegal, according to the U.S.

Horse racing betting on the Internet is legal in most states, as long as the company you're betting with is based in the U.S.

Watcher, FullTiltPoker.com was one of the sites specifically mentioned in this article. Perhaps racing is handled differently than poker. But I would be very careful not to get caught in this ever-expanding web.

[cj]

That's true, but you are at no risk of losing funds if you wager with a U.S.-based online horse betting site.

if you play offshore, you are at some risk depending on the book.

This isn't true either. There was a case recently at Hinsdale you might remember.

[slew101]

Hinsdale was not an online betting operation, it was strictly telephone. It was also a cheap operation run with no financial backing, which unfortunately, the bettors never knew until it was too late.

I mean companies like NYRA, Twinspires, youbet, are very solid. Even when NYRA went bankrupt, the players' funds were protected.

This isn't true either. There was a case recently at Hinsdale you might remember.

[Watcher]

Watcher, FullTiltPoker.com was one of the sites specifically mentioned in this article. Perhaps racing is handled differently than poker. But I would be very careful not to get caught in this ever-expanding web.
Full Tilt and PokerStars were named because they're the two largest online sites. Guaranteed they will cancel the checks currently being declined, find a new payment processor, and send them new checks.

We're talking about companies that are sitting on enough cash to be able to purchase brick and mortar casinos in Vegas. They're not going to renege on those cashouts.

[fmhealth]

Watcher, with all due respect. Weren't we saying the same things concerning Bear Stearns & Lehman Brothers in the past two years? It was completely inconceivable that they would ultimately implode.

Is what we're witnessing now simply the first canary in the coal mine? Just some food for thought.

[Watcher]

Watcher, with all due respect. Weren't we saying the same things concerning Bear Stearns & Lehman Brothers in the past two years? It was completely inconceivable that they would ultimately implode.

Is what we're witnessing now simply the first canary in the coal mine? Just some food for thought.
FM-

Valid point, we never know exactly what's going to occur. But from someone inside the industry, shooting it to you straight, it's not similar to BS or Lehman. The money is not an issue, they've simply had their payment processors "blacklisted". It takes anywhere from a DBA to a change in payment processors to have this issue fixed.

These companies are not highly leveraged, their maintenance capital is rather slim vs. their revenues. Their players come from all over the globe, not just USA-based players.

Further, with the Democratically held Congress, headlined by Barney Frank, lobbying to remove the UIGEA, regulate, and tax the online gaming industry, it looks like they will continue to prosper.

[comet52]

there is nothing legal about wagering with the boys down in costa rico, belize, jamaiica, aruba, st. martin's or any of those other exotic islands. if you wager with them you are flat out breaking laws these days.

Wrong.

Wire act applies to bet takers, not bet makers. UIEGA says you can't move the money there legally (forget the fact that it's unenforceable). But I have money down there from years ago and can still bet it.

I bet sports offshore for years and most of what passes for knowledge about the legal or other situations in that industry is just plain wrong.

[fmhealth]

Thanks Watcher for your thoughtful & incisive reply. Obviously you have some unique insights in this field.

Not to endlessly beat this topic, but try this one on. The lead article in todays WSJ was that the gov't wants to enforce the law on taxing personal use of business cell phones / Blackberrys, etc. Obviously, the manner in which our gov't is doling-out cash will require some innovative tax strategies.

So, with that in mind, would the following headline shock you?

"FEDS will now tax ALL GAMBLING proceeds as ORDINARY INCOME". I actually think that all online sites along with individual track "Player Cards" will ultimately be looked upon as a fresh & viable source of tax revenue. The logistics of this are mind-boggling but desperate times sometimes call for desperate measures. Just a thought.

[Watcher]

I agree. In a nutshell, this is what Barney Frank's new bill is pushing. They want to regulate and tax the operators and gamblers from these online casinos. They've estimated billions in tax revenue over the next few years.