Archive for the ‘News’ Category

DOJ Has Long Target Online Gambling Advertisements

Tuesday, July 26th, 2011

WPT_full2If you think that Black Friday was the first salvo by the U.S. Department of Justice against the online gambling community, you are mistaken. As the Wall Street Journal pointed out today, the attack on the legitimate entertainment industry has been going on as early as 2003. At that time, the main focus of the Justice Department was on advertising and their main target was television networks.

Back in 2003, began advertising on World Poker Tour, which was at the time televised on the Travel Channel. As a result, traffic spiked and the company became one of the largest online poker rooms in the world. It was then that the industry learned how important television advertising was to setting them apart from their competition. However, the Department of Justice also noticed.

In June of 2003, they sent a letter to various television networks and other media companies warning them not to accept advertisements from online gambling companies. The letter they sent was recently obtained by the Journal. In it, the Justice Department told media companies that they should “know the illegality of offshore sportsbook and Internet gambling operations since, presumably, they would not run advertisements for illegal narcotics sales, prostitution, child pornography or other prohibited activities.”

It’s always nice when the people charged with enforcing U.S. law compare playing a card game with child pornography, isn’t it? That condescending threat to media companies isn’t accurate, though. It is true that offshore sportsbooks are illegal and were so back in 2003. But by what statute did the Justice Department think that online poker was illegal?

To this day, there is no federal law banning online poker or any type of online gambling activity other than sports betting. However, the Justice Department incorrectly seems to think that UIGEA constitutes a ban. That law was passed in 2006. So how, three years earlier, did they think the activity was banned? The Wire Act, which is the other federal anti-online gambling law, only prohibits sports betting.

Despite the lack of legal authority to do so, the government went on the attack. In 2004, the FBI seized $6 million from Discovery Communications Inc., which at the time owned the Travel Channel. That money was made from the World Poker Tour ads and was deemed illegal by the FBI.

In response to the tactics of the prohibitionist government, online casino websites began launching free tutorial versions of the websites. Those were differentiated from the pay sites by the fact that they had a .net domain. Online poker rooms then started advertising with .net domains on a variety of shows. The Justice Department decided that it would be too difficult to prove any guilt in court so they decided to let the .net ads run.

Reid, Kyl Ask for Answers from US Attorney General

Tuesday, July 19th, 2011

Just over three months from the first indictment against online casinos operated from overseas, Senate Majority Leader Harry Reid and Senator Jon Kyl have sent a letter to US Attorney General Eric Holder. The letter is meant to inquire as to how the Department of Justice enforces the US’s laws pertaining to online gambling.

In other words Reid and Kyl would like to know why Holder and the DoJ never acted before to enforce the Unlawful Internet Gambling Enforcement Act (UIGEA), waiting for years to go past since the law’s passage in 2006. They would also like for Holder and the DoJ to reiterate what their stance on online gambling is. It is unclear if another letter was or will be sent to the US Attorney General in Baltimore who headed up the Blue Monday indictments.

Here is an excerpt from the letter to Holder from Reid and Kyl, dated July 14th:

“This lack of activity by law enforcement led to a significant and growing perception that operating Internet poker and other Internet gambling did not violate US laws, or at least that the Department of Justice thought that the case was uncertain enough that it choose not to pursue enforcement actions.”

On one hand it seems that this letter could be taking the tone of why did they wait to act if not to lure online casino operators into a false sense of security. I am sure that many online casino patrons and online poker players are wondering it this is the case.

However it might be worth remembering that Kyl was not entirely on board with regulated online gambling, but he is working with Reid which shows a shift in opinion on regulated online casinos. Reid did have a change of heart and tried to pass a law that would allow for federally regulated; the bill failed to pass in the lame duck session of last year, but Reid is trying again to pass legislation that would allow for regulated online poker in the US. It seems this letter to Holder could be a request as to why he waited so long to pursue enforcement of the UIGEA, why something was not done sooner and what Holder and the DoJ’s stance on enforcing online gambling is.

At this point in time a response from Holder has not appeared. It is interesting to see Reid and Kyl, who were once definitively against online gambling and online casinos, stand up for them, which is what we here at hope is happening. It is a curious question and one that many online poker players in the US have asked—why did so much time pass before legal action was taken?

English Harbour to Close Down their Casino Sites

Monday, July 18th, 2011

August 1st is going to be a sad day for players and the online casino industry. On that day the online casino group English Harbour will shut their doors. I am not talking about only closing the doors to players in the United States—which has already happened—but to close down their online casinos for good. We here at are sad to see them go, but we do respect them for being a very sound online casino group.

The decision comes after a long look at the state of the industry when faced with the indictments and arrests made on Black Friday and Blue Monday. Add to that one of English Harbour’s payment processors was picked up at a stopover in Guatemala. Despite having already pulled out of the US market, English Harbour seems to have decided that the market is too sticky for their taste right now with how the US indictments have been and after watching what has happened to Full Tilt. Granted, Full Tilt having their license suspended is a reflection of their own business practices and not a reflection of the online casino industry overall. It certainly is not a reflection of the English Harbour online casino group, who has maintained a strong, steadfast and reliable reputation since it opened its first online casino in 1997.

The feeling at English Harbour is to walk out of the industry on their own power with their profits in their own pockets and on a high note with their dignity intact. While the online casino group is not worried for their own operations after they pulled out of the US market, they were concerned about payment processors, which they do not have control over. They did not want a situation to arise in which, owing to the conduct of independent payment processors, for their players to be without a means to access their money at the English Harbour sites.

So the virtual doors will close on August 1st. Again, we want to emphasize that English Harbour has done nothing questionable, and only wishes to bow out with grace from a situation that seems to them to be too rocky for their taste. We here at hope that when—not if—the US federal government goes with regulation, the English Harbour group will rise again. For players how have accounts at any English Harbour online casino, now is the time to either play your balances down or to withdraw your money. Many players are moving over to Real Time Gaming online casinos because those online casinos offer highly reputable and well-supported online gambling experiences, as well as similar online casino game lineups.

Tick, Tick, Tick—Time is Running Out for US Poker Players to File Claims

Friday, July 15th, 2011

Did you or any one of your online poker playing friends lose money on April 15th, better known as Black Friday? If so, time is running out for them and any other American online poker players in the US to file a claim with the Southern District of New York to try to get their money back.

Or some of their money at least. It is unclear how much money the Department of Justice seized back in April when it seized the domains and bank accounts of the online poker sites PokerStars, Full Tilt and Absolute Poker. Gambling scholar I. Nelson Rose is of the mind that “hundreds of thousands” of American online poker players have lost lots of money. And by lots of money he means “tens or hundreds of millions of dollars.” But since there is no clear number of how much money was seized Rose says “If you are real lucky you will get 10% of the dollar.”

The three major online poker sites were seized three months ago to the day when they were charged with money laundering and for violating the Unlawful Internet Gambling Enforcement Act (UIGEA). The seizure is meant to punish them for breaking US law. The UIGEA specifies that it is illegal for financial institutions to knowingly process transactions to and from online casinos. In the case with these three sites, the institutions did not process the transactions knowingly, although I am sure the Department of Justice is doing a thorough investigation.

But while the news focus has been aimed at the things these sites did, there are more victims here: the “hundreds of thousands” of American online poker players who are losing those “tens or hundreds of millions of dollars.” The UIGEA does not ban players from playing online casino games, and yet they are the ones who are losing their money. Granted they knew they could lose their money from playing real money online poker, but they thought if they did it would be lost to another player, not the federal government.

PokerStars has already been paying back their American online poker players. So far $120 million has been repaid and the site is functioning well overseas with its remaining online poker players. Full Tilt has been another story in regards to repaying their players, which has resulted in Phil Ivey suing them, the regulating body of Alderney has suspended their license and they now have a court hearing on the 26th. But the happenings at Full Tilt are all their own and not reflective of the online casino industry.

For players who are having a hard time getting their money back or for those who miss the deadline to file a claim there are some options according to Patrick Flemming, who is an attorney for the Poker Players Alliance. American online poker players could do the Phil Ivey and sue the site in hopes that federal government will release some of the seized money to pay the player back. That route is not a guaranteed route and it is probably better to file a claim. All claims have to be made by the end of the day today.

Greek Proposal for Online Regulation Held Up

Thursday, July 14th, 2011

Greece may have to send their proposal for online licensing of online casino operators back to the drawing board. Their proposal was submitted to the European Commission back on April 5th. A week ago the EC gave their response to the Greek proposal and that response means a lot of work still needs to be done to silence the concerns the EC has for the proposal.

For starters the overall tone of the EC’s response is that the Greek proposal is unlikely to jive with European Union law, and that could be a slight problem. And by slight, I mean not slight at all. The reason for this is the portions of the proposal that would have online casinos basing servers in Greece. This idea is not new and we here at have heard this brought up before when other countries were considering how to regulate and license online casino operators within their countries. And the idea has never passed. The other tricky portion would have those operators seeking a Greek license obtaining a bank guarantee from a Greek bank. The problem with this is that it would have a large impact on transfers to local banks and branches.

Overall these two portions alone will limit the number of license that would be issued since not all operators would be will to expend the cost to set up servers in Greece and/or obtain the bank guarantee. The idea behind regulating online casinos in Greece is to not only limit associate crime but also to generate revenue. If the number of licenses would be limited for a lack of interest, it does not make sense to have such stipulations in the Greek proposal.

Another cited concern is that the online casino games that would be allowed to be offered are not specifically stated. This means that online casinos could offer the online casino games of their choosing. They could choose to only offer online poker or offer a full line of online casino games, and Greece as the regulating body would not be able to comment on this oversight unless they overhauled their regulating system. It makes more sense to establish which online casino games will be allowed at the onset of a regulatory framework.

The EC has extended the standstill period Greek online gambling is under until August 8th. It is hoped that by then Greece will have a tight proposal for licensing online casinos and regulating them in their country. One thing Greece cannot enact the proposal as is without making a return statement acknowledging the EC’s concerns. Moving forward without acknowledging the EC would give the EC room to begin infringement proceedings. However, it is more likely that Greece will make the acknowledgement and work to tighten up their proposal.

Big Online Gambling Arrests in Malaysia

Wednesday, July 13th, 2011

malaysia location2In Malaysia 13 people were arrested in a gambling raid during the night. In a shopping mall that housed internet cafés, authorities found people using slot machines as well as gambling online using the computers. Police seized 54 computers and 41 slot machines.

The raid took place in Ampang, a suburb of Kuala Lumpur, which is in the state of Selangor, Malaysia. In Ampang, like other parts of the country, internet cafés have sprung up as ways to subvert laws banning online gambling. The businesses in question operated 24 hours per day and claimed to be legal internet cafés and entertainment centers. However, even if the owners can claim no knowledge of what people do while surfing the internet, those slot machines would be hard to explain. The raid was conducted at three different locations at approximately 9:30 PM. During the raids, 13 individuals were arrested, ranging in age from 19 years old to 50 years of age.

In Malaysia, gambling in some forms is legal to all non-Muslims. That includes casino games, slot machines, the lottery and betting on sports racing. However, online gambling is illegal, as are video game arcades, which were banned in 2000. The internet cafés in question may be in violation of both bans, the ban on online gambling and the ban on video game arcades.

In many jurisdictions across the world that don’t allow online gambling, internet cafés have popped up as a way to satisfy the demand for online gambling without actually violating the law. Though a loophole, the customers generally pay for internet credits and are not actually paying the establishment for game wagers. Since they are only paying for time on the internet, the business isn’t breaking the law (usually). In some cases, though, the cafés take it a step further by adding games like slot machines, which in many cases makes the businesses clearly illegal.

Finland’s New Coalition Aims to Scale Back Gambling

Wednesday, July 13th, 2011

A new coalition is now at the helm of the Finnish government and it would appear that they are not as fond of online poker, online casinos and online gambling in general as their predecessor. Well not as fond of outside online casino operators I should say; they seem to be just fine with their country’s gambling monopoly, RAY though. There are plans in the works to scale back outside involvement in the country’s online gambling market.

The new coalition is hinting that restrictions will be put in place to limit the access online casino operators have to the Finnish population. They are moving forward with this decision despite warning from analysts that cutting competition from outside operators would actually stifle growth in the country, and that would mean a reduction in possible revenue to be gained from online gambling.

And that is true—cutting out competition might seem on the surface to be a good idea, you know, the whole ‘eliminate the competition’ angle. But in reality if a company, in this case the Finnish gambling monopoly RAY, does not have anyone to compete with, there is no incentive to keep costs to consumers competitive, which in turn leaves the company without the ability to offer lower prices than someone to draw in players. In the long run it does not pay to cut the competition out. But the new coalition in Finland is set to do just that.

Restrictions the coalition is looking to put into place include blocking sites on the Internet, presumably sites belonging to operators outside of Finland regardless of whether or not they are top online casinos or not; other options include restricting the advertising that outside operators can do in the country, and even create a disruption in the financial transactions to and from online casino operators similar to what the Unlawful Internet Gambling Enforcement Act of the US is supposed to do.

We shall see if the new coalition in Finland does actually implement any of these restrictions or whether online casino operators fight back.

DC Online Gambling Definitely Pushed Back

Tuesday, July 12th, 2011

There has been some turmoil up in Washington DC about the implementation of the bill that will give America’s capitol city online gambling. The bill has been riding the seas since it hit the news that the waiting period for Congress to review it and say no had passed. But real concerns arose when it came to light that council member Michael A. Brown slipped the bill into the supplemental budget in December, which did not allow for any public vetting or discussion.

Despite the concerns the DC Lottery kept moving forward with implementing the bill, which would bring six online casino games to an intranet only available within DC city limits. According to the bill these would not be high stakes games, with $250 the maximum that anyone could deposit. Two of the six games, online blackjack and Victory at Sea, an online casino game version of Battleship, were to be launched in a free play mode to allow residents in DC the opportunity to become used to having the games around, as well as test the intranet’s security to ensure that no one outside of DC limits could access the iGaming network. Playing for real money in the casino online would not have begun until September 8th when the other four games would be rolled out.

However, residents are still calling for talks pertaining to how and where the public access locations for the iGaming network will be located. The DC council’s finance committee held a hearing at the end of last month to gather more information about concerns and about how the iGaming network would work. As a result the DC Lottery announced yesterday that they are pushing back the launched of the real money gambling portion of the bill’s implementation until the fall at the soonest. They also announced yesterday that they would travel around the city, stopping in each ward to allow residents to come out and voice concerns and ask questions.

Plans for the DC iGaming online gambling network include making the intranet network available for access from residents’ homes if they so choose to access it. But there were also plans to create several public locations within DC for residents, and it is the notion of public locations that residents want to talk about. And while this is perfectly justified, it does push back the implementation of the bill which could further push back DC generating revenue from the bill. To help allay some concerns, the DC Lottery has announced that they will post a notice sixty days before allowing access for each public access point for the online gambling network.

Spilt of Intranet Gambling in DC Causes Definite Delay

Friday, July 1st, 2011

Yesterday we here at said that Wednesday’s DC Council’s finance committee hearing reported that there would likely be a delay in the DC Lottery’s implementation of the city’s online gambling bill. That delay is now confirmed as Buddy Roogow, DC Lottery’s Executive Director, said, “Their [the community’s] voices will be heard. We have no interest in moving forward with locations that are against the greater interests of the community.”

The concern that has prompted the delay is over the “hot spots.” Hot spots are being defined as the public locations within DC where access to the secure iGaming network and infrastructure will be set up. Considering the bill’s quiet slip into December’s supplemental budget, and subsequent quiet passage into law this past spring, citizens in DC are just now finding out that their city is going to be the first to offer regulated online gambling in the country. Some, such as local businesses that have been hit hard by what is now appearing as a double dip recession, are eager for the online gambling bill’s implementation, believing that serving as a hot spot will draw more customers in hopes of increasing business. Others, such as some residents, have concerns about what they perceive to be the building of gambling parlors that could hurt their neighborhoods.

To help allay concerns and to get firmer community support, the DC Lottery has decided to delay the launch of its online gambling intranet system, iGaming, to meet with the community in the city’s Wards. Whether the delay means a pushback of launching the play for fun system, which will feature online blackjack and Victory at Sea, or only the real money online gambling system is still unclear. “There is an umbrella of misunderstanding that we are setting up betting parlors, which we are not. All we are simply doing is providing an Internet connection for a specific location to offer Internet service, and on that Internet service would be,” said Roogow.

So how long will it be before the DC Lottery launches their real money iGaming service? Right now that is unclear. Roogow has stated that only hot spots with community approval will go live. He thinks that some can be brought online by September 8th, the original date to launch real money online gambling and all six online casino games; but it is unlikely at this point that all of the intended hot spots will be operational by that date.

DC Online Gaming Bill May Not Launch as Early as Planned

Thursday, June 30th, 2011

More and more details about the Washington DC online gambling bill are coming to light. A hearing was held yesterday to allow the public to vet about the bill, which some are trying to cast in a shady light, saying that council member Michael A. Brown snuck it into December’s supplemental budget on the sly and unbeknownst to his fellow council members. Brown has defended both himself and the bill, saying that council members were aware of the bill’s presence in the budget before they voted on it. And to date no council member has said otherwise.

However outside the DC council there does not seem to be many who knew of the bill until it passed into to law this past spring. To assuage worries and to allow the public to vet the bill a hearing with the DC council’s finance committee happened yesterday.

Prior to the hearing, concern seemed based on Brown’s actions. Now post-hearing and with knowledge that the other council members were aware of the online gambling bill’s presence, focus has shifted to the speed with which the DC Lottery is implementing the bill and about the “hot spots.”

DC residents are concerned that with the rollout of the online gambling bill their neighborhoods will shift. Those who attended the hearing voiced concerns that they had not had the opportunity to tell the council that they did not want hot spots in their neighborhoods.

Also of concern is the infrastructure of the I-Gaming system itself, and the DC Lottery was on its toes with responses to questions. The infrastructure for the implementation of the online gambling bill requires that each player’s age be verified to ensure that they are at least nineteen years of age or older. The IP address of those logging in from outside the “hot spots” must also be verified as being within the DC city limits. Concerns over problem gambling were also addressed; players can only deposit a maximum of $250 each week and may only make deposits using debit cards or by linking their bank accounts. In other words, no credit cards. DC’s online gambling bill will also require that the I-Gaming system include self-exclusion lists to allow players to keep themselves from playing.

It certainly sounds like the DC Lottery is all set to move forward, and there was nothing in the hearing that will definitely delay the launch of the play for fun games. But we here at will keep you posted on the happenings in DC with their online gambling bill. With concerns about “hot spots,” the launch of real money gambling may be delayed but there is no official word as of yet that a delay will happen; it is only a possibility.