[TheLock]

I'm having a discussion with an intelligent non-sportsbettor friend who just finished a paper on online gaming.

He asked me about my motivation for sports betting based on the current legal climate surrounding it.

I initially gave him a short answer which was essentially, bookmaking is illegal but wagering is not.

He asked me what my interpretation of this was:

Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.[1]

I know this topic has been ground into the earth but help me out guys. Is it legal to place wagers with an offshore book or not?


Thanks in advance.

[blix177]

Seriously US is ****ed, tax on this tax on that, regulate this regulate that, can't do this and can't do that. ****ing land of the free my ass.

[TheLock]

Anyone have anything on this?

Justin, durito, Mr X, Wreck?

[coldhardfacts]

My understanding is that the courts have ruled that the intent was that the law apply only to individuals engaged in the "BUSINESS OF BETTING", i.e., the bookmaking business. It was passed in conjunction with the RICO act as a means of going after organized crime, and does not apply to casual bettors.

[TheLock]

Thank you coldhard.

[TheLock]

Does anyone have a definitive link for the courts interpretation of this?

[Steeve]

I found an interesting article/ Basically, we are not breaking the law by placing wagers online:

http://vegasclick.com/online/legal.html

I especially like this quote:

There is no federal law that says specifically, "You may not gamble on the Internet." There are some who claim that the Wire Act (which prohibits making bets over the telephone) applies to the Internet, but until a court rules on that specifically, it's a gray area.

[TheLock]

Thanks Steve.

My friend said this when I advised him that the law had been interpreted to go after the "business of betting" and not the recreational bettor:

You are correct that the law (through the discretion exercised by prosecutors and the intent of Congress) has drawn a distinction between the activities of bookmakers and casual bettors.

This is interesting insight though. It goes in line with the argument that I was trying to make in my paper. It discussed the various ways prosecutors have tried to approach online gambling and how their efforts have had no deterrent effect what so ever. There was a recent move by the feds where they seized the accounts of 27,000 online poker players with over $100 million combined in them. It's the first time the feds have ever gone after individual bettors before. I argued that it's hard to send a message to bettors with moves this like because people who bet online (by and large) think that they are not doing anything against the law. (I mentioned that this perception was only going to be amplified by the fact that prosecutors were going after them using money laundering laws even though those laws require that you are trying to conceal the origin of funds gained through illegal activity. They still haven't mentioned what original statute was being violated to generate the illegal activity.)

I was quoting the Wire Act, but it's not solely applicable to wagers made over telephone lines. Any activity conducted over the Internet constitutes a wire transmission and courts have ruled that the Wire Act applies to online sports gambling. There's a case with BetOnSports with that holding.

[Facepunch]

I would rather the climate stay as it has in the past.

no tax liability while the Feds "look the other way"

but our freedom is definitely under siege here

[Jonah]

Seriously US is ****ed, tax on this tax on that, regulate this regulate that, can't do this and can't do that. ****ing land of the free my ass.

[Steeve]

TL, your friend directly contradicts the information in the article above. It stated that as of yet, NO COURT had ruled that the internet was equivalent to a phone line.

Ask your friend what has happened each time funds have been seized by the feds. The cases I know about, once it got in front of a judge, the judge ruled that the feds overstepped their boundaries and released the funds.

I just don't think it is something that we currently have to worry about. Be careful who you elect though, as they may feel that online gambling is the bane of our existence.

[frankthetank]

I don't like another human being, or set of human beings, telling me how I can spend MY money. It feels like they are violating inaliable rights. Basically it comes down to greed, as most things do. The gov't overspends and would like to sqeeze every drop from the orange rind. Every failed govt' in the past is guilty of the same thing. They all failed. They can all be tracked using a timeline of greed and mismanagement. I hate to see these elected dopes screw up a good thing.

[Nickelicious]

To me, living in the U.S., offshore books are not a perfect solution at all. Even with the best books, I never feel like my money is really safe or "really real." I know my money is real to the books, but not so sure they realize the money is real to me!

My feeling is that if the U.S. government legalized and regulated online gambling in the States, there would also be a massive set of rules that would protect the gambler from getting ripped off and another department for handling disputes. Sure, it would still not be perfect, but payouts would happen within minutes and not days or weeks, and there would be an FDIC-type guarantee of funds. Essentially, the Federal Government would turn the internet into an online Las Vegas.

Yes, there would be taxes on winnings, but if I am winning $50,000 a year every year, I am also going to know how to protect most of that profit through tax shelters, deductions, exemptions, or loopholes. Worldwide legalized online gambling is the best way to level the playing field, and as an American I would no longer have to deal with Vinny, the alcoholic manager at an offshore book, who didn't get his blow job last night and decides to take it out on a couple customers this afternoon.

[Fishhead]

Good post NICK

Let me add, placing a wager offshore as a U.S. citizen is NOT illegal..............now is it LEGAL, that's another question.


If there is ever a purpose for the term 'GREY AREA'.......offshore sportsbetting being legal or illegal as bettors would be the perfect spot for it.

[BigdaddyQH]

Nick makes a very valid point. The whole off shore fiasco is based on the fact that people who win are dodging paying their taxes. There is no law that says that you can not place off shore wagers. There are many laws regainding how funds are wired back and forth. If the Government legalized online gaming in tis country, it could collect the taxes due to them. I know of 4 major hotel chains in Vegas that could start up in as little as a weeks time. Everything they need is there. They are ready to go. Since the Government needs more money, this seems like a very sensable thing to do. You money would be a lot safer than in the hands of some foreign book, with a million different paper trails to follow if you get screwed. When I told everyone at another site that the feds could, and would clamp down on off shore books, no one believed me. That was 4 yers ago. Now people believe me. So believe this. You can make a difference. Push your Congressmen and Senators to back pending legislation to legalize in line gaming in the U.S.

[Fishhead]

Nick makes a very valid point. The whole off shore fiasco is based on the fact that people who win are dodging paying their taxes. There is no law that says that you can not place off shore wagers. There are many laws regainding how funds are wired back and forth. If the Government legalized online gaming in tis country, it could collect the taxes due to them. I know of 4 major hotel chains in Vegas that could start up in as little as a weeks time. Everything they need is there. They are ready to go. Since the Government needs more money, this seems like a very sensable thing to do. You money would be a lot safer than in the hands of some foreign book, with a million different paper trails to follow if you get screwed. When I told everyone at another site that the feds could, and would clamp down on off shore books, no one believed me. That was 4 yers ago. Now people believe me. So believe this. You can make a difference. Push your Congressmen and Senators to back pending legislation to legalize in line gaming in the U.S.

There are many who pay taxes on their offshore winnings.