U.S. House Clears Anti-Internet Gambling Bill

matr0x_x writes "The U.S. has just moved one step closer to banning all Internet gambling sites when the US House of Representatives cleared an anti-Internet gambling bill yesterday. The bill is against a World Trade Organization ruling last August that stated the US must not block online gambling sites based overseas." From the article: " The bill, cleared by voice vote in the House Financial Services Committee, would prohibit a gambling business from accepting credit cards, checks, wire transfers and electronic funds transfers in illegal gambling transactions. Unlawful gambling, under the legislation, would include placing bets on online poker sites, for example, and any other online wager made or received in a place where such a bet is illegal under federal or state law."

Bill actually clears the House Financial Services

[j_rhoden]

Not the the bill actually cleared the House Financial Services Committee, not the House as the headline says. This means that it will go before the full House for debate.

RTFA

[kraada]

Doesn't the POSTER even RTFA these days? This bill cleared the committee. In fact, there's a line in the article which states:
"The bill now moves fo the House floor for consideration."

Not that it's impossible it will pass anyway, but please guys, get it right. It's not that hard.

Re:How it's written is what matters

[TheScottishGuy]

nothing really to stop you, except the difficulty involved in actually opening a british bank account, I had to spend almost 2 years in the uk recently and the hassle involved in opening an account is insane, and that's for someone with a UK passport who can walk into the branch. I was getting an apartment at the same time and the number of times i heard "well we can't hook up electricity until you have a bank account" or "we need a utility bill to open an account" was just nuts.

Im No Law Expert...

[beedle]

I can see how the US government has the lawful ability to effectively block online gambling sites within the US. However I am not really sure about how they plan to prosecute these online gambling companies in a court of law in the US if they are based in another country. Im sure some countries might bend over for the US and extradite the offending company officials to the US to face prosecution, but I just cant help but think that there are alot of countries out there that would just as soon give the big middle finger to the US instead.

Point being since the only world authority (WTO) has already passed a ruling that went against this new bill then there are effectively no international governing bodies that are willing to enforce this law. What is the US supposed to do, start barging into other countries and telling them to abide by US laws?

Oh wait....this is the US we're talking about here, of course that is what they will do. Oh well on another interesting note, doesnt it seem hypocritical to anyone that the US government can come down so hard on companies such as Microsoft, Google, and Yahoo for cooperating with the Chinese government in censoring the internet when this bill shows that they are essentially trying to do the same thing?

The bottom line is, if people want to gamble online they are going to find some way to do it, just like if the Chinese public wanted to "break" Google's filtering scheme or the Great Chinese firewall and see what the rest of the world sees on the web...rest assured they will do it.

Re:How it's written is what matters

[joe545]

British banks generally require proof of residence (council tax or utility bills) to open a UK bank account so as to make life harder for money launderers, so this method won't be as easy as you think it is. Perhaps other countries (tax havens perhaps) have more lax banking laws which would make offshore gambling accounts feasable for the masses.

Also, members of the public are not normally eligible for an account with the Bank of England as it is more of a national financial institution (like the Federal Reserve in the USA) controlling national interest rates etc rather than a normal bank.

Re:What happened to the state rights?

[Anonymous Coward]

Because if the gambling site is not in the same state or same nation as the gambler, then it would fall under "Commerce with foreign Nations, and among the several States", and therefore even back when the constitution was more appropriately interpreted, under federal jurisdiction. (Section 8, Article I, US Constituion).

Re:How it's written is what matters

[stinerman]

All joking aside, TFA says that Barney Frank opposes it. If there has ever been a rule of thumb in congress, its if Barney Frank opposes it, it will soon be law.

It's HR 4777. Maybe.

[Animats]

First, this seems to be HR 4777, the "Internet Gambling Prohibition Act". There are some other bills related to Internet gambling, but this is the one that's in committee right now, and it has 130 cosponsors, so it's going to move forward, not be ignored. When posting a story about a bill, please list the bill number.

Second, the Congressional bill status system [loc.gov] says that today's action so far is "Introductory remarks on measure" in the House Judiciary Committee. It's not shown as passed by that Committee yet. Nor is it shown as being referred to the House Financial Services Committee at all.

Third, the bill is notable for what it doesn't have. It doesn't, for example, make credit card debts for gambling unenforceable, or prohibit banks from cooperating in money transfers for that purpose. That would actually work, but the banks wouldn't like it.

Re:How it's written is what matters

[hotdiggitydawg]

British banks do require proof of address, but the degree of hoops you have to jump through depends on what sort of account you want. The first account I got when I arrived in the UK was a simple debit card account - you get a card, and internet banking, but no overdraft, no chequebook, etc. Quite limited but enough for the grandparent's needs. And All I had to do was get some fella staying at the same youth hostel to write a letter saying the address of the hostel was my permanent address. Dead simple.

They say they require a permanent address to crack down on terrorists funding their activities by fraud. Well, it's pretty easy to bypass, as the example above shows. And ironically, the only reason I was trying to get a bank account was so I could get a permanent address (you can't rent a flat from most agencies without a bank account), but I couldn't open a bank account without having proof of a permanent address (like having my name on the bills/lease for the flat). Nice catch-22 with extra hoops for legitimate citizens, and a really limp defence against the less-legitimate. Government restrictions at their finest!

Re:It's HR 4777. Maybe.

[swampdust]

Thats right. HR 4777 is the Leach version (this is the identical version of Sen Kyl's bill. HR 4411 is the other house bill from Rep. Goodlatte which would also make online gambling illegal but do it in a different way. Both are poorly worded bills that would create costs in the way of who polices this new law, and of course both legislate morality and disrupt our rights online. Of course not like online gambling will ever stop - instead it will most likely benifit shady parties. Like prohobition helped the mob.

Re:How it's written is what matters

[nigelc]

Well, assuming you are not trolling (last line makes me wonder...)

Yup, the US demands that you declare income earned even while you are not resident in the US of A (for citizens, resident aliens (green card), people with work-permits). It's like a sexually transmitted disease but you have less fun catching it.

Extra gotcha. Money you earn overseas and pay taxes on overseas (overseas in this case means outside the USA) is also liable to US taxation. But they will credit some percentage of the money you paid to the local country for taxes. So if I spend six months in Bavaria working and being paid in Germany, I'll be paying taxes to the Germans on the money I earn. Uncle Sam will then give me a tax credit against my US taxes to the same amount (up to my US tax obligation).
But if I earn the money working for six months in a country the US does not approve of (Iran, Cuba, ?possibly North Korea?), then I'll pay local country taxes and US taxes -- Uncle Sam will give no tax credit for money earned under "unapproved countries".

Disclaimer: This is certainly how it worked 6 years ago -- may have changed in a Post 9/11 world with the Global War on Terror

The real reason for this awful bill

[Anonymous Coward]

Even faux news op-ed gets it. Check out the following excerpts. The bill "bans gambling for all but those gambling interests that have politically powerful allies in Congress. Which is exactly what Jack Abramoff wanted." This includes horse racing which suprise, has given to sponsors of these bills, including HR 4411 from Goodlatte which would also ban gambling like HR 4777 mentioned in this post. "the anti-gambling crusader Mr. Goodlatte, interestingly enough, has taken some $10,000 in campaign contributions from the National Thoroughbred Racing Association)." Not only would it exempt horse racing, it would actually ensure that the horseracing industry can bet online interstate legaly (something the DOJ and goverment does not believe is the case today). http://www.foxnews.com/story/0,2933,188048,00.html [foxnews.com]

About Overseas Banking Accounts

[TechForensics]

There is a principle in US law that says you may not do indirectly what you cannot do directly. There is also a Federal conspiracy statute that says you may not conspire to commit an unlawful act. Bottom line is, if they find out you're doing it, and they want to get you, they've got you. Of course, the law will probably be aimed not at individuals but at the financial institutions that enable circumvention; and in real terms, it would be almost impossible for the feds to catch you (but you'd have to lie on your tax returns about having signature authority over any foreign banking account).

Re:About Prohibition...

[robertjw]

The post-war spike in the graph you linked to is close to the pre-prohibition levels. The data could be interepreted in any number of ways. The depression ran from 1929 to the late 30's. By the time the amendment was repealed many people didn't have money to by alcohol. After that many young men, a demographic I would imagine is responsible for large amounts of alcohol consumption, were out of the country - many of whom were killed in action. It doesn't appear that consumption increased again until the baby boomer generation started to grow up in the late 60's/early 70's.

Also looked at the article you linked to and didn't see much support for ongoing effects of prohibition on consumption. Unless you have a more substantial analysis of this data to link to I'm going to have a difficult time believing your statement that Prohibition reduced the long term per capita consumption of alcohol.

It entirely depends on where you get taxed...

[charleste]

Well, based on my personal experience, you will get taxed somewhere (some government will take a portion of your money). However, most "Most Favored Nations" have a non-double jeopardy treaty with the U.S. So, for example, if you actually checked the IRS website, you'll find that if you paid taxes in the UK, you do not have to pay taxes in the US. BUT you must report that you earned the money and paid taxes in the UK. If you're trying to use the two countries to NOT pay taxes, then your SOL. Otherwise, unless you're trying to get on board with NHS in the UK, the taxes you pay in the US are cheaper.

Japan solved this a long time ago.

[Genom]

Pachinko.

Basically a form of gambling in Japan, where outright gambling is illegal. How do they skirt it?

One company allows you to buy balls. You give them money, they give you balls. Then you take the balls over to the pachinko parlor, where you can use the balls to play. When you win, you receive more balls back. They don't allow you to buy/sell the balls there. No money changes hands. When you're done, you go back to the ball-vendor, who "buys" your balls back.

The ball-vendor and the pachinko parlor are two completely seperate businesses, legally. That way, you're not *technically* gambling. Because the transactions are abstracted, it gets around the anti-gambling laws.

I could see something similar happening with online gambling. Get an account with some "chip" vendor, where you buy online "chips", which are strictly defined as being worthless (EULA type stuff). Then go to a (legally seperate) gambling site which just *happens* to allow you to use those chips, but doesn't directly allow you to buy-in or cash-out, so no money is actually changing hands. When you're done, you cash-out your account with the chip-vendor.