highnote
08-15-2009, 12:38 AM
Here is some good news from Professor I Nelson, a recognized gambling law expert:
1#09-1 © Copyright 2009, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, www.GamblingAndTheLaw.com
Gambling and the Law®
New Internet Gaming Regulations -- Part II
In 2006, conservative Republicans rammed through the Unlawful Internet Gambling Enforcement Act by attaching it to the SAFE Port Act, an anti-terrorist bill.
The UIGEA ordered the Treasury Department and Federal Reserve Board, in consultation with the Department of Justice, to issue regulations requiring financial institutions to identify and block “restricted transactions.” The federal agencies tried, and failed.
They refused to issue a list of websites that had to be avoided, or ones that were cleared as being legal. Instead, the agencies put the burden on banks to somehow identify whether a gambling transaction was unlawful, which can only be done by doing an in-depth analysis of federal, state and even tribal law, and knowing where the bettor and operator are located.
With the election of Barack Obama as President, and the Democrats increasing their majorities in Congress, the regulations appeared dead.
But the opponents of Internet gambling, including the NFL and its former paid lobbyist, William Wichterman, wanted these regs. Wichterman used his position in the George W. Bush White House to force the federal agencies to issue final UIGEA regulations, to take effect on January 19, 2009, the day before Obama became President.
So the anti's got their regulations, and proponents of Internet gaming are looking at ways to get them undone.
But there are many good reasons for leaving well enough alone.
The new regs, for example, make it very clear that merely making bet online is not a violation of the UIGEA. In fact, regular players can never be guilty of this or any other federal crime, unless they actively aid the gambling operation, such as with collecting debts from other players.
The new UIGEA regs also expressly state that the UIGEA only applies to money going from a player to an operator. Banks and other payment processors are never supposed to look at money sent by operators to players.
Even better, the new regs tell financial institutions to not waste their time ever looking at private transactions. Banks are only supposed to do “due diligence” when setting up new commercial accounts.
Why not require banks to see if their customers are wiring money to illegal overseas gaming operators? The agencies admitted “there are no reasonably practical steps that a U.S. participant [financial institution] could take to prevent their consumer customers from sending restricted transactions cross-border.” They thought about requiring banks to ask their patrons, “Are you sending money for illegal Internet gambling?” But someone in Washington had the brains to realize that the answer the banks were going to get would always be “No.”
Banks and payment processors outside the U.S. are also pretty much exempt. American banks are not required to determine whether the customers of their foreign correspondent banks are involved in Internet gambling. This will make it even easier to get money to and from overseas poker sites.
The most interesting twists in the new regulations are some safe harbors for Internet gambling. Banks and credit card companies are automatically safe to do business with a gaming operator who is the state itself, as with a state lottery, or has a license issued by a state or tribe, or has a “reasoned legal opinion” by a gaming lawyer. In fact, the regs pretty much tell the credit card companies to come up with new merchant codes to distinguish these legal online gaming businesses from unlawful transactions.
So, when a state like California authorizes intra-state Internet poker, players will be able to use their American bank credit cards.
END
© Copyright 2009. Professor I Nelson Rose is recognized as one of the world’s leading experts on gambling law. His latest books, Internet Gaming Law (2nd edition just published), Blackjack and the Law and Gaming Law: Cases and Materials are available through his website, www.GamblingAndTheLaw.com.
1#09-1 © Copyright 2009, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, www.GamblingAndTheLaw.com
Gambling and the Law®
New Internet Gaming Regulations -- Part II
In 2006, conservative Republicans rammed through the Unlawful Internet Gambling Enforcement Act by attaching it to the SAFE Port Act, an anti-terrorist bill.
The UIGEA ordered the Treasury Department and Federal Reserve Board, in consultation with the Department of Justice, to issue regulations requiring financial institutions to identify and block “restricted transactions.” The federal agencies tried, and failed.
They refused to issue a list of websites that had to be avoided, or ones that were cleared as being legal. Instead, the agencies put the burden on banks to somehow identify whether a gambling transaction was unlawful, which can only be done by doing an in-depth analysis of federal, state and even tribal law, and knowing where the bettor and operator are located.
With the election of Barack Obama as President, and the Democrats increasing their majorities in Congress, the regulations appeared dead.
But the opponents of Internet gambling, including the NFL and its former paid lobbyist, William Wichterman, wanted these regs. Wichterman used his position in the George W. Bush White House to force the federal agencies to issue final UIGEA regulations, to take effect on January 19, 2009, the day before Obama became President.
So the anti's got their regulations, and proponents of Internet gaming are looking at ways to get them undone.
But there are many good reasons for leaving well enough alone.
The new regs, for example, make it very clear that merely making bet online is not a violation of the UIGEA. In fact, regular players can never be guilty of this or any other federal crime, unless they actively aid the gambling operation, such as with collecting debts from other players.
The new UIGEA regs also expressly state that the UIGEA only applies to money going from a player to an operator. Banks and other payment processors are never supposed to look at money sent by operators to players.
Even better, the new regs tell financial institutions to not waste their time ever looking at private transactions. Banks are only supposed to do “due diligence” when setting up new commercial accounts.
Why not require banks to see if their customers are wiring money to illegal overseas gaming operators? The agencies admitted “there are no reasonably practical steps that a U.S. participant [financial institution] could take to prevent their consumer customers from sending restricted transactions cross-border.” They thought about requiring banks to ask their patrons, “Are you sending money for illegal Internet gambling?” But someone in Washington had the brains to realize that the answer the banks were going to get would always be “No.”
Banks and payment processors outside the U.S. are also pretty much exempt. American banks are not required to determine whether the customers of their foreign correspondent banks are involved in Internet gambling. This will make it even easier to get money to and from overseas poker sites.
The most interesting twists in the new regulations are some safe harbors for Internet gambling. Banks and credit card companies are automatically safe to do business with a gaming operator who is the state itself, as with a state lottery, or has a license issued by a state or tribe, or has a “reasoned legal opinion” by a gaming lawyer. In fact, the regs pretty much tell the credit card companies to come up with new merchant codes to distinguish these legal online gaming businesses from unlawful transactions.
So, when a state like California authorizes intra-state Internet poker, players will be able to use their American bank credit cards.
END
© Copyright 2009. Professor I Nelson Rose is recognized as one of the world’s leading experts on gambling law. His latest books, Internet Gaming Law (2nd edition just published), Blackjack and the Law and Gaming Law: Cases and Materials are available through his website, www.GamblingAndTheLaw.com.