US Outlaws Online Gambling

imaginaryelf writes, "As reported earlier on Slashdot, in the closing hours of the US Congressional session on Friday, September 29, the Unlawful Internet Gambling Enforcement Act of 2006 (H.R.4411.RH) was attached to the Safe Port Act of 2006 H.R.4954.EAS. To the surprise of many, the bill passed both the House and the Senate, and Bush is expected to sign it into law this week. This effectively outlaws online gambling in the US, by way of making it illegal for credit-card companies to collect payments for bets. The financial markets punished the stock of online gambling companies as some prepared to pull out of the US entirely."

Re:Circumvention

[nuzak]

> What am I missing?

Money laundering laws. The gist being that they don't care what middlemen your money goes through, it's the endpoints that count.

Not so bad

[litewoheat]

This doesn't really matter all that much. It means that US banks and credit card companies can't process the transactions. Companies like Firepay [firepay.com] are off shore banks that can accept lawful deposits from US banks and then in turn handle gambling related transactions.

The law doesn't impose any penalties to gamblers so there's nothing illegal about taking any winnings by using the offshore banks to funnel those winnings back to a US account.

The problem is it's just harder now for the average player to make a deposit. I think in the long run this will be better for the above average players by keeping the degenerate gamblers out.

Re:I Feel so much safer

[Tremor (APi)]

Why not just do what they do with Pachinko [wikipedia.org] in Japan?

Under Japanese law, cash cannot be paid out, but there is virtually always a small exchange centre located nearby (or sometimes in a separate room from the game parlor itself) where players can conveniently exchange tokens for prizes for cash. Such pseudo-cash gambling is theoretically illegal but from the sheer number of pachinko parlors in Japan it is clear that the activity is at least tacitly tolerated by the authorities.

You buy some tokens, you play with the tokens to win more tokens, you spend those tokens to buy a thing - a special, completely worthless thing, that can only be bought at the game parlor. You go outside, turn the corner, and sell the thing to a shop which is bizarrely interested in the thing, and is more than happy to buy it from you. At the end of the day, this shop then sells these special things back to the Pachinko parlor, who restocks them.

Re:Politically incorrect and I don't care

[CreatureComfort]

Actually, most of the 'founding fathers' who formed our original government and signed the Constitution were Deists [sullivan-county.com]. Even the ones who were Protestant would have vilified the current group that calls themselves conservatives. You can point your outrage at much more recent [slate.com] revisionism.

Credit cards were already blocked

[MattW]

Credit cards were already not accepted. This bill is aiming to stop banks from transfering money to online gaming services via Firepay, Neteller, etc. It requires a coding scheme for ETF transfers be put in place to "code" the purpose of each transaction. And it's sort of weird, really, given that if I send $x to Neteller, and I'm not specifying a purpose at the time - since they will hold funds - how can that be enforced? It remains to be seen whether this can effectively do anything at all other than burden the US banking system with an ineffective regulation which costs millions or billions to implement.

Also, it wasn't a surprise that the legislation PASSED - the Port Security bill was getting passed, period. What IS surprising is that Frist managed to attach this to it. Democrats were trying hard to attach relevant amendments, like a measure to increase security of the rail transit system. These amendments were all rejected, yet Frist manages to get his "pander to the religious right" amendment attached? The mind boggles.

Anyhow, there's a good analysis of the bill reposted here [twoplustwo.com], which includes:

The great unknown is how far into the Internet commerce stream federal regulators are willing to go. The Act requires institutions like the Bank of America and Neteller to i.d. and block transactions to unlawful gambling sites, whatever they are. But, while the Bank of America will comply, Neteller might not, because it is not subject to U.S. regulations. Will federal regulators then prohibit U.S. banks from sending funds to Neteller? And would they then prohibit U.S. banks from sending funds to an overseas bank, which forwards the money to Neteller?

Re:Worse Problem

[Xentor]

Well, technically it's not based on chance, but on the actions of other investors. So it's not actually based on chance... In the same way that spinning a roulette wheel is actually based on velocity, friction, and other miscellaneous laws of physics.

But anyway, I checked again, and there are specific provisions allowing securities and derivatives trading.

Re:hooray.

[Gadgetfreak]

Yep, it's funny for those of us who can think for themselves. But don't forget the people outside of Slashdot, many of whom cry because they simply cannot maintain control of their finances or their own life.
These are the people that want the government to protect them from all the bad things, and lobby and vote accordingly. I'd be a lot more liberal if I knew people would still be responsible for their actions. But I know that's not going to be the case.

I live in Southeastern Connecticut, home of Foxwoods and Mohegan Sun casinos. I visit both regularly, simply because of the restaurants and other offerings. I don't gamble at all. However, I constantly see the people with tattered clothes sitting at the machines, the mother with her 6 year old sleeping on the carpet next to her at 2 AM. I see the signs mounted on all the pay phones with the free # for the gambling addiction hotline... which are there only after lobbying pressured them.

The average American owes thousands to credit card debt already. I'm not saying it's right, but I'm saying it's a prime example of how people will piss and whine to politicians about the things they don't like rather than make conservative decisions in life. The same people want schools to raise their children for them. And they want the government to protect them from themselves.

You'd be surprised how many people will be happy that online gambling is effectively shut down. And it's probably not going to be the moral conservatives who speak the loudest in favor of it.

Re:Not so bad

[raehl]

I think in the long run this will be better for the above average players by keeping the degenerate gamblers out.

Erm, how is that good for above-average players? Degenerate gamblers are where we make our money!

Foolishness

[WillyPete]

Your logic is exactly what drove this thing, I'm certain. It's also a foolish notion, on the face of it.

If U.S. credit card companies can't collect U.S. payments for U.S.-based online gambling, then I guess we're about to see some explosive growth in their overseas divisions.

How is my Visa card, acquired in Britain from their European division, and not subject to this law, going to prevent me from gambling myself into bankruptcy in a (now) European-based online casino? Is the Justice Department going to put Visa out of business in the U.S. over this?

This law drains whatever tax benefit Internet gambling provides to the U.S., and guarantees growth for European and Asian business.

How to Stop It

[Greyfox]

Register to vote and vote against incumbant. Sure one vote doesn't usually make a huge difference, though a couple hundred would have kept shrub from the presidency the first time he ran. But voter turnouts in the US are usually ridiculously low so your vote makes more of a difference than it would in other countries. If you could convince your friends to do the same thing and they could convince their friends, it wouldn't take long before your collective votes would make a difference. What doesn't make a difference is just sitting on your ass and complaining about it.

I'm voting in the November elections. How about you?

Re:not necessarily bad

[drzhivago]

Offshore internet gambling isn't taxed. There's the reason they want to block it.