Tomorrow is deadline. What happens if no regulations?
-
Tomorrow is deadline. What happens if no regulations? -
you may not see anything enforced tomorrow or Wednesday, but this is definitely bad news for the future. Bodog has a bullseye on its chest with some of its operations in Canada, and their constant mainstream marketing doesn't help either. I would be very cautious now as I see some books and their accounts having their funds frozen in the not too distant future. Maybe WSEX and Spiro will fight, but I feel a lot will crumble before the dust settles.Comment -
So basically you feel it is time to hit the panic button?Comment -
With the WTO showing the US the real implications of this new law, this deadline means nothing.
The new law, slipped in with an anti-terrorism legislation, was pretty much an election stunt. Now that the elections are history and the law is under attack, I would expect the Republicans to be surprisingly quite about it.
The law was never intended to wipe out internet gambling, but to limit it (and the flow of money going offshore). Has that been accomplished? I would say so. With that victory in the bag, and their little law now measured against the far greater issue of intellectual property (Microsoft, etc), only the most severe case of rabies could inspire the Republican attack dogs to push their luck even further.Comment -
I expect something to go down before the first pigskin is thrown this season. To which book that is the question, but Calvin seems like the primary target. The only good thing about him though is that it's privately owned, so the U.S. can't go after any public shareholders.Comment -
Darkhorse...so what I hear you saying is basically...more of the same for the foreseeable future?Comment -
The worst is behind us. Thanks mostly to the WTO.Comment -
Tomorrow it will be 270 days since the Unlawful Internet Gambling Enforcement Act was signed into law by the President of the United States, and the deadline by which the Secretary of the Federal Reserve System, in consultation with the Attorney General, must set down regulations to identify and block restricted online gambling transactions. We have until the end of tomorrow to see whether the Federal Reserve and the Attorney General will stick to this deadline, but we are not far from learning exactly how the US Government intends to restrict its citizens online gaming activities.
For the management of online gaming companies that continue to provide services into the United States, these must be nervous times. We have already witnessed several cases which demonstrate that the US government will not shy away from pursuing the executives of such companies, or their financial transaction providers, and the regulations of the UIGEA will give them yet another weapon in their war on online gaming.
In March of this year Gary Kaplan, the founder of BetonSports Plc, was arrested in the Dominican Republic and extradited to face prosecution in St Louis on charges including violation of the Interstate Wire Act of 1961.
And Peter Dicks, the British Chairman of Sportingbet Plc was arrested in New York's JFK airport at the request of the St. Landry District Attorney in Louisiana, on charges of breaching a State statute on “offences affecting general morality”.
Now under section 5363 of the UIGEA, any person engaged in the business of betting or wagering may not knowingly accept payment in relation to participation in unlawful internet gambling. In this context, the UIGEA definition of a payment would be any transaction or transmittal involving credit or the proceeds of credit, electronic fund transfers, cheques, drafts or similar instruments and any other form of financial transaction as prescribed by the Secretary and Board of Governors of the Federal Reserve.
Any person found in breach of section 5363 risks being fined, imprisoned for a maximum of five years, or both. It is the remit of either the US Attorney General, or the Attorney General of any State to institute proceedings in this regard.
So can we expect the US authorities to actively pursue online gaming operators that continue to provide their services to American citizens? According to Leslie Bryant, Head of the Cyber Crime Fraud Unit at the Federal Bureau of Investigation yes, we can.
Bryant states that as a key enforcement agency, the FBI’s strategy for tackling online gaming is to start with the companies providing the service, “We’re going after the people making the money, the owners of these virtual casinos, gaming rooms, and off-track betting parlours.”
And for US players Bryant had this warning, “Even if you don’t get caught gambling, you could well lose the money you have in an online gaming account if the company faces charges…..the U.S. government seizes assets in these cases whenever possible.”
At the time of this article, hundreds of online bingo, casino, poker and sports book sites continue to accept payments from American players, even if their payment options are becoming fewer and fewer. This places these companies and their customers funds in some considerable risk.
The online gaming executives that Gaming Intelligence Group has spoken to believe that the authorities will take action against US facing operators once the deadline for implementation of the UIGEA passes. Particularly for the poker operators who withdrew from the US market last year, this represents a levelling of the playing field, that will once again shift the balance of power in the fight for active player liquidity.
If the private online poker sites choose to withdraw from the US market, or are prosecuted for failing to do so, we could expect six of the ten largest operators to loose as much as 90% of their player liquidity.
PokerStars.com is probably best placed to survive such an event. While we estimate that 70-75% of PokerStars liquidity is derived from the United States, their customer base has grown rapidly outside the US in the past nine months, thanks in part to promotions like the $1 million guaranteed Sunday weekly tournament.
PokerStars continues to accept payments from US players via ePassporte, ****, **********, Diners Club, cashiers cheque, money order and bank draft, although withdrawals can only be made through ePassporte, **** Debit or Moneybookers.
As recently as yesterday, the company was informing its American players that it would continue to provide its services. “You may play on our site as you did prior to the recent developments,” said PokerStars customer support. “We would like to reassure you that all funds held with PokerStars are completely secure. Player deposits are held in a separate bank account so that they remain completely isolated from all other aspects of the business.”
However Neteller’s customer funds were also held in separate accounts from that of the business, but that did not stop the US Attorney’s Office from seizing $60 million of their customers money. Five months on, Neteller is expected to announce later this week how and when customers can expect their money back.
Full Tilt will probably be even more affected than PokerStars due to their greater dependence on American players. We estimate about 85% of Full Tilt’s customers to be US based. Without these players, Full Tilt’s business could become unsustainable, particularly if their remaining non-US players left in search of greater liquidity.
And with the highest dependence on US players, Absolute Poker, Bodog and UltimateBet would end up with virtually no liquidity if they blocked these players, as they probably account for up to 95% of their customer base.
So who stands to gain from all this? Apart from the US land-based operators of course, it would have to be online poker operators such as PartyPoker, iPoker, Everest, Ongame and IPN. As the liquidity rankings change, these operators stand to gain the non-US players of the affected sites who will want to move to where the most action can be found.
And the Losers? The American public who can continue to gamble in Las Vegas or Atlantic City, on Indian tribal lands and trackside, but who some in the government believe cannot be trusted to enjoy the same leisure activities online in the comfort of their own homes.
Comment -
Thanks for your input guys..Comment -
BBD, unless the US decides to invade Antigua, what could possibly match the loss of Pinny and Neteller?
The WTO isn't going anywhere. The Republicans milked this for all they could. If they continue to do so, the opposition will be all too happy to point at the WTO, and the far-reaching implications for US business, as it should have last November. The law was meant to gain the right wing points with their followers in the short term. If they want to push it any further, at the cost of US business, they risk alienating many of those supporters.
I don't think the law will be repealed anytime soon, but Frank's initiative does put us at or near a stalemate.Comment -
This deals mostly with banks and how and what they report. It could well make a big splash when it is released but the net effect will be minimal.
The problem for the US is they can charge every operator out there but they can bring them in. the laws change and the offshores adapt. Pretty much business as usual.Comment -
Ok I know I might be a little tunnel visioned here but I can't help but notice this each time I read it.. As far as I know (asked judge downtown) and others have mentioned it on here... What is unlawful..? As far as I know in Ohio it's lawful to gamble online... I am speaking on the "person" here not the "bank"...Comment -
Wassup Regis... "online gambling is NOT illegal as far as the federal law but "to process gambling transfers" is... they are not the same... Things started to make a lot of sense when sportsbook would not take residents of certain states because as you said in some states it is clear...
What's funny is to the average person it looks like these books are jumping through hoops to say "f*ck you" US LAW... mmmhmmmm but when it's illegal in a STATE the books don't even try on that one...Comment -
This law was in effect the day it was signed. It has been illegal for banks to transfer gambling money since November... ANyone notice a change? I think Chase blocked maybe .001% of wires.
The law said the federal reserve would write up methods for banks to apply the law within 270 days.
Even if the fed never does this, banks are supposed to follow the law, but realistically, the DOJ will never seek injunctions against banks until the regulations are written as banks would just point to the part of the law saying the government failed to explain how to do this and the DOJ is not looking for a multimillion dollar court case with no winners... or a test of constitutionality.
Bottom line is the law will never get written, you will still be able to use your banks. If you prefer you can use a foreign one. Eventually someone will set up a new neteller... if the books allow it. There are neteller like options out there, but the books don't want to use them.
-SeanComment -
Remember this is the same government that is prosecuting mobsters from the 70s now... It will be 20 years before any effective way to monitor checks would ever occur if ever...
SeanComment -
I hope you are right..Comment -
I should also add, Citi now offers online wires up to $50k... Anyone need a new neteller? They don't seem to give a flying F about gaming.
Most banks out of Canada also have online wires.
No judge is ever going to fine a bank for allowing gambling...
Conversation:
DOJ "Did you allow some people to send money to gambling places?"
Bank "We don't know."
DOJ "Why not?"
Bank "You didn't tell us how to stop it. We spend $10billion making sure criminals don't move money. Do you want us spending that making sure Osama doesnt send it into the country or making sure Joe Poker doesn't play $100 of online bingo?"
Judge "Case dismissed..."
SeanComment -
All states claim Internet betting is illegal, even the ones with no express ban. They all point to gambling being illegal unless the individual state OKs it, like lottery, OTBs, etc.
I think by that rationale the states can say everything is illegal unless they specifcally make it legal.
Comment
