Posts Tagged ‘unlawful internet gambling enforcement act’

U.S. Government Regulates Internet Betting With Get out of Jail Cards

Saturday, September 25th, 2010

Dethroned U.S. powerhouse sportsbook, Sportingbet has settled with the U.S. Department of Justice, agreeing to pay $33 million in exchange for not facing prosecution charges. Well lookie here Mama! Money can buy justice after all! Yippie!!!!

Well, good for Sportingbet. But you know what? It’s cases like this that cause me to believe the United States is never going to regulate online gambling. Maybe it will trickle in on a State level, i.e., online poker in California and Flordia, but when you look at what the feds are doing to “enforce” the UIGEA, it definitely makes me go hmmmmmm.

Just to fill you in, Sportingbet is a long-running online sportsbook that used to do lots of business with United States citizens. In fact, like most other internet betting sites before the passing of the UIGEA, Sportingbet did the bulk of its business with Sportingbet. However, that came to a screaching hault when some of Sportingbet’s top brass were detained after stepping foot on U.S. soil.

In actuality, this was before the passing of the UIGEA, which goes to show that nothing has really changed other than a lot more reputable online casinos dropping out of the U.S. market, only to have their stead filled by rogue operators in the business of cheating players, or at least not paying out when times get rough – if you catch my drift. πŸ™‚

What’s most interesting is the fact that the (former) charges looming over Sportingbet applied to before the passing of the UIGEA (before 2006). Apparently this all falls under the Wire Act (passed in the late sixties, I believe), which in itself, is said to be a very grey piece of legislation in regards to online gambling.

If you really stop to think about it, the federal government has been making a killing with cases like this. Not too long ago, Party Gaming agreed to dish out a whopping $105 million for uncollected gambling taxes. But wait, online gambling is illegal in the U.S. There is no tax. And why should there be with seizures like this. At this rate, the U.S. government stands to reap way more than they would letting State governments tax gaming revenue.

Then again, perhaps this is all just a precursor to regulation in the States. Says the feds: Let’s get all the money we can on “illegal” activity from the past, THEN we will regulate. It’s their way of admitting they should have been taxing gaming revenues all along, in a way. If they were just to make it illegal right now, all the past stuff could potentially become null and void. Okay, no I’m confused. Just regulate for Christ’s sake!

Atlantis Internet Group Signs With Cake to Power Tribal Online Poker

Monday, September 13th, 2010

AtlantisInternetGroup2In what could be a sign of things to come for online casino gambling in the United States, Las Vegas-based Atlantis Internet Group has signed an agreement with the popular Cake Poker Network (powering U.S. favorite, Doyle’s Room), to create a wide area online poker network for players residing in regulated tribal casino State’s.

While this may seem, at first, a bold and dangerous move in light of the UIGEA – albeit an ineffective online gambling ban – Atlantis Internet Group Chief Executive, Donald L. Bailey, says the agreement will give the Tribal Gaming Network (a patent pending intratribal/intrastate online casino network) an “immediate and legal solution” for tribes seeking to offer internet betting.

That’s because the UIGEA has exemptions for Indian Casinos, intertribal internet gaming, as well as State’s with intrastate online gambling laws. Personally, that’s news to me – I thought the only carveouts in the UIGEA were for horseracing, lotto and fantasy sports betting.

TribalGamingNetworkBut according to the National Indian Gaming Commission, which oversees tribal casino regulations in the State’s, the Tribal Gaming Network is 100% legit. It’s also 100% loaded. Synced with over ten tribal casinos and potentially allowing players in thirty State’s to play online casino games, the Tribal Gaming Network has the potential of offering one of the largest wide area progressive jackpot networks on the Web.

For now, Atlantis Internet Group has it’s sights on online poker, which currently holds the greatest potential of becoming regulated in State’s where tribal casino gambling is legal. California leads the way with an amended poker bill scheduled for legislative action before the year is out, while both New Jersey & Florida are considering similar options.

The Cake Network is certainly a great choice for launching an online poker network. With thousands of players online at any given moment and an open door to the U.S. online poker market, Cake will give the Tribal Gaming Network instant liquidity, not to mention credibility, while a giant surpluss of players will only serve to strenghten Cake in return.

Antigua and Barbuda Prime Minister Discusses Imposing Sanctions on US

Saturday, July 10th, 2010

The tiny Caribbean nation of Antigua and Barbuda was one of the first jurisdictions to regulate online gambling in the world. Well, at least, it was one of the first online gambling jurisdictions to get on the map, so to speak, and become a haven for online casinos and all manner of internet betting sites.

That was in the early days of online gambling, and as such, it was also before the passing of the infamous U.S. online gambling bill (the UIGEA) seeking to make certain forms of internet wagering illegal, such as online casino gambling. While Antigua and Barbuda still operates a Directorate of Offshore Gaming to oversee the regulation of licensed betting companies, truth be told, their numbers are far down from times long ago.

Well, not that long ago. The UIGEA was passed only five years ago. But five years is a long time when we’re talking millions of dollars. Let’s see – about $105 million to be exact.

That’s the number based on $21 million/year for sanctions. And it’s a figure that Antigua and Barbuda is entitled to apply to levy on the United States as part of a World Trade Organization shortly following the passing of the UIGEA. Despite the U.S. government’s balking at a WTO ruling stating that the UIGEA put the American government in violation of a trading practices treaty, Antigua and Barbuda never received a penny in compensation.

Now, Antigua’s Prime Minister, Mr. Baldwin Spencer, says the debilitating effect on its economy is very clear. Compounded by the global economic crisis, the tiny Caribbean island has certainly suffered since 2005. PM Spencer has made numerous attempts to reach a negotiated settlement with the U.S. government, but there has been no budging whatsoever, and an apparent disinterest to even deal with the matter.

Critics of Spencer’s plan to impose sanctions on the U.S. government – which he recently announced at the CARICOM summit in Jamaica – say the imposing sanctions would only further hurt the economy of Antigua and Barbuda, while having practically no impact on the U.S. economy. That’s a strong a legitimate argument to consider for sure.

Unintended Effects of UIGEA Encroaching Online Revenue for Horseracing Industry

Wednesday, July 7th, 2010

It looks like more than just online casino operators have some “ish” with the U.S. online gambling ban – Unlawful Internet Gambling Enforcement Act – infamously passed under the Bush administration back in 2005 as part of an attachment to a port security bill. Surprisingly enough, it’s the same folks who would seemingly have benefited from the UIGEA, who are now complaining about, well, it’s ineptness.

Here’s a little background: When the UIGEA was passed, it basically banned all forms of online gambling, except for parimutuel horserace wagering and fantasy sports betting. I know, go figure. How are those any different than other forms of gambling? Anyhow, the only problem was that – despite the carve-outs – there were no guidelines on exactly how financial institutions and online payment processors would successfully go about filtering all of the different types of internet wagering transactions, i.e., online casinos, poker rooms, sportsbooks, bingo, skill games etc.

As a result, credit card companies are now erring on the side of caution and blocking most, if not all transactions that come through online betting websites. There simply is no way to confidently identify which transactions are allowed and which are not. Whereas there was more wiggle room for credit card companies during the last four years, now that the UIGEA has gone into effect (as of this year basically), online betting websites are now experiencing a spike in blocked transactions, some of which are apparently “legal”.

And not that U.S. players are not finding ways to gamble at online casinos (because they are), it’s just simply a big fat mess on the regulatory front. Looking back, Congressman Barney Frank’s labeling of the UIGEA as the “stupidest law ever passed” rings even truer today. So, while Barney Frank and others are working to get the UIGEA overturned and new legislation passed to effectively regulate online gambling, other politicians with interests in parimutuel horserace wagering are looking to pass legislation that would clarify the vagueness of the UIGEA.

Introducing House Representatives Scott Murphy (New York Democrat) and Brett Guthrie (Kentucky Republican). Basically representing the two largest horseracing jurisdictions in America, the pair are teaming up to drum support for the “The Wire Clarification Act”, aka House of Representatives 5599. The legislation, if passed, will apparently provide clarification that the Wire Act (the original bill that apparently made internet gambling transactions illegal, despite the fact that the internet didn’t even exist at the time) is not applicable under regulated activities of the Interstate Horseracing Act.

Now, I don’t know about everyone else, but does it seem strange there is no mention of the UIGEA in this bill? I mean, wasn’t the UIGEA supposed to supersede or at least clarify The Wire Act? It’s as if nobody wants to even touch the UIGEA. Why that is, is well, anybody’s guess. Stepping on toes maybe? Or is this a concession to the overall view that the UIGEA is such a messy bill that will eventually become null and void, and so why bother with it? It definitely makes you wonder.

In the meantime, Congressman Murphy from New York says the $210 million brought in from the Aqueduct Racetrack, Belmont Park and Saratoga Race Course last year, contributed $18.5 million to the New York Racing Association, and that the industry itself is now worth $39 billion, with online wagering making up a “substantial portion” of said revenue.

New York Horseracing Industry, NYRA, Awarded $25 Million Loan to Keep Afloat

Sunday, May 30th, 2010

Another Packed House at New York's Aqueduct Horse Racing Track

Another Packed House at New York's Aqueduct Horse Racing Track

As low an approval rating as New York Governor David Patterson has, at least he has the support of the New York Racing Association, which is pretty happy right now. Well, I’d be pretty happy too if somebody gave me a $25 million loan. That’s right folks. Just when you thought the antiquated horseracing industry was about to die off like it rightfully should, the State of New York has stepped in to give the UIGEA another opportunity to engage one of its carveouts.

In case you are wondering how that might work, the UIGEA permits online horserace betting through State-licensed operators. It is one of the three niche carveouts referred to in the UIGEA as not being an “illegal form of online gambling”, although the UIGEA doesn’t go on to define what those illegal forms even are. Go chew on that. One would think that in order for the New York horseracing industry to stay afloat this time around, it will need to start asserting itself in the highly competitive online marketplace. The only thing is that the NYRA has been doing that for several years! Obviously, it’s not working. Can you say “SNAFU”?

Personally, I am ever so interested to hear what excuse the NYRA has this time around. Before the UIGEA, they were crying bloody murder against online casinos, sportsbooks and poker rooms, saying the New York horserace industry was losing business to illegal online gambling websites. Next, they are going to say it’s all because of the internet. Heck, they might even blame it on Starbucks, citing all the caffeine addicted Wifi users as potential bettors. But hold on just a second. They can bet online while drinking their latte in Starbucks, remember?

Apparently, even with protectionist legislation in its favor to thrive online, the New York horseracing industry can’t help but go downhill. Face it Governor Patterson – it’s a dying industry. Have you been to the racetracks, Governor? Yes, you probably have. You wouldn’t know it, but that’s because you are part of the dying generation that is trying to sustain a dying industry. Those two don’t go hand-in-hand. The truth of the matter is that the NYRA has not even said how they will go about keeping the State’s three largest horseracing tracks (Belmont, Saratoga and Aqueduct) from feigning another shutdown, let alone how they intend to pay back $25 million in tax payer dollars.

At this stage, the only semblance of hope for the New York horseracing industry is the installation of new video lottery terminals, which has apparently been dragging on since 2001(no operator has been named to run the terminals. Big surprise, eh?). In fact, it was the delay of these video terminal installations that prompted Governor Patterson’s office to draw up legislation covering the $25 loan. The State of New York was supposed to subsidize the NYRA if the terminals were not installed by April, 2009. Obviously, that hasn’t been happening. So let’s just give the NYRA a $25 million loan to buy some more time, shall we?

NYRA Chairman, Steven Drucker, certainly doesn’t mind. He had this to say in a recent press release: β€œThe board of directors of the New York Racing Association Incorporated along with its management and dedicated employees are grateful for the State Legislature’s approval last evening of a $25 million loan, which guarantees world-class thoroughbred racing at Belmont Park, Saratoga Race Course and Aqueduct Racetrack…We appreciate the dedication and perseverance of Governor David Paterson, Assembly Speaker Sheldon Silver, Senate Conference Leader John Sampson, Senate Racing Committee Chairman Eric Adams and Assembly Racing And Wagering Committee Chairman Gary Pretlow and their respective staff members, which resulted in this legislation.”

Remember those names folks. Come reelection time, it will be very interesting digging through their campaign contributions.

U.S. Facing Online Casinos Help Players With Debit Gift Cards for Making Deposits

Saturday, May 22nd, 2010
Take Your Pick! Gifts Cards for Online Casinos

Take Your Pick! Gifts Cards for Online Casinos

With the June 1st deadline to enforce the UIGEA fast approaching, many online gamblers are wondering if the “stupidest law ever passed” (thank you Barney Frank) will have an affect on their online gambling activities. In other words, folks want to know if they are going to be able to deposit money – and most especially – withdraw their winnings from their favorite USA online casinos.

Basically, once the UIGEA is mandated to go into effect on June 1st, financial institutions and transaction processors are required by law to block online gambling transactions. But hold on just a second – not every online gambling transaction. You may recall that the UIGEA is filled with carveouts that allow fantasy sports betting, horseracing, and lotteries to accept online wagers. The only problem (and this is a BIG problem) is that the UIGEA does not define “illegal online gambling”, nor does it provide for any solutions or government backing in helping filter out all of the different kinds of online gambling transactions.

The American Banking Association has itself stated that effectively enforcing this law will be nigh impossible. Furthermore, there are so many ways around traditional methods of depositing with online casinos, i.e., credit cards and eWallets like Neteller and Click2Pay, which needless to say, have already enacted measures to block online gambling transactions with U.S. citizens.

One of the most effective methods being used to deposit at online casinos are credit/debit gift cards, which are essentially prepaid debit cards. Unless the U.S. government were to ban all prepaid cards (which they certainly cannot do), this method serves as a non-descript way of making “online gambling transactions”. The way it works is that cards must first be funded – either by direct deposit of paychecks, ACH money transfers, PayPal transfers or cash reloads at participating retail locations. Once the card has been funded, they can then be used to transfer funds to online casinos, poker rooms, sportsbooks, you name it. As for receiving withdrawals, worse case scenario is that players will have to wait a week or more to receive a certified check in the mail.

The question you must be asking yourself now is, “Where can I get a prepaid gift card?”. Truth be told, there are plenty to choose from. And quite frankly, there are likely to be plenty more spawned as the demand to circumvent traditional methods of depositing funds with internet betting sites continues. Remember, the UIGEA does not implicitly make the act of online gambling illegal. It simply prohibits the transfer of funds between financial institutions and online gambling businesses, which is carried out by the operators and not the bettors themselves.

In terms of fees, each card varies (there are plenty to choose from). Granted, some can get expensive. However, this is where your best friend Wal-Mart enters the picture. In addition to the swarming crowds of crazy people, Wal-Mart carries a comprehensive supply of prepaid cards, and also allows you to reload your card for future uses. Retail stores from drug stores to bodegas allow you to do the same. However, it’s Wal-Mart that imposes the lowest fees (around $3), while there’s no fee whatsoever if using the paycheck direct deposit method of funding your prepaid gift card. Depending on the card, a one-time activation fee and monthly fee may also apply.

The best way to go about finding a reliable prepaid debit gift card is to start a relationship with an online casino you would like to sign up with. In other words, open an account at a trustworthy online casino you know to do business with U.S. players (check out our Best USA Online Casinos page), and then contact the cashier while logged into your account. From there, they will be able to guide you on how to get your account funded. Just to name a few, some of the one’s players are frequenting include Green Dot (www.greendotonline.com), Vanilla (www.vanillavisa.com), Wired Plastic (www.wiredplastic.com), and NetSpend (www.netspend.com). These are considered some of the more affordable gift cards out there. For example, WiredPlastic has a one-time activation fee of $9.95 and monthly fee of just $3.95.

Hearing to be Held in House Committee Regarding Taxation of Online Gambling

Monday, May 17th, 2010

Is regulating online gambling in the U.S. worth the tax revenue?

Is regulating online gambling in the U.S. worth the tax revenue?

In just two days, the United States House Committee on Ways and Means will be reviewing tax proposals to tax online gambling according to regulatory legislation yet to be passed into law. In fact, current legislative proposals have quite a long way to go before even the possibility of being passed into law becomes….well…a possibility. With the Unlawful Internet Gambling Enforcement Act (UIGEA) enforcement deadline fast approaching (June 1st), which was already postponed by nearly six months in December 2009, a more serious effort is now being taken to consider the prospects of regulating online gambling – most particularly, online casinos and poker rooms.

There is no denying the fact that legalizing online gambling would generate hefty amounts of tax revenue. However, just how much revenue is the question. And the better question is just how much at the cost of what? Being that the House Committee on Ways and Means has jurisdiction over taxation matters, the former question will be more closely examined than the latter at the Hearing on Tax Proposals Related to Legislation to Legalize Internet Gambling on Wednesday at 9:30 am.

Specifically, the Committee says it will be discussing revenue and tax figures resulting in the legalization of online gambling in the United States. Tax legislation has already been drawn up, as has a co-bill that would essentially overturn the UIGEA and give individual State governments the right to regulate on their accord. Overreaching regulatory legislation will trickle down from a Federal level, as will tax revenue between the Federal and State governments. Taking all of this into account, including the counter effects of the UIGEA and electronic eCommerce research undertaken by the Department of Treasury, will be the task at hand for the Committee.

The UK government, which passed legislation to regulate most forms of online gambling back in 2005-2006, could serve as a model and gauge for predicting potential tax revenue, although it isn’t known if the Committee plans to take an extensive look at the UK Gambling Act, let alone discuss it during deliberations.

What is most promising is that several Committee members have expressed sincere interest and even adamant hope in overturning the UIGEA and passing strict legislation that would effectively regulate online poker and online casinos, including Nevada Representative, Shelley Berkley.

Anyone interested in supporting the cause further can do so by visiting www.waysandmeans.house.gov and participate in the discussions by means of submitting a written record. In order to do so, send an email to wmsubmissions@mail.house.gov and include your name, organization, address, phone number, contact email address, and title of the hearing (Hearing on Tax Proposals Related to Legislation to Legalize Internet Gambling) in the body of the email. Attach your submission as a Word document. If all required information is provided, the statement may be included in the Table of Contents and printed in the hearing record.

The Future of Online Casino Gambling in the United States

Saturday, April 24th, 2010

Gambling. Just the word alone brings with it a lot of baggage. A controversial activity – to say the least – what makes gambling different than most other heated issues (like abortion) is the fact that just about everybody gambles, whereas not every woman has or is going to get an abortion.

Just think about it. How many people do you know with a retirement plan or IRA? How many people do you know who own a house? How many people do you know who invest in real estate, the stock market, or even a new business opportunity? Just about everyone you know, including yourself, is – directly or indirectly – participating in one form of gambling or another. The only difference between “everyday” investing and casino gambling is that the latter at least provides a form of entertainment and diversion.

Granted, not every form of gambling has the same degree of volatility, just as every casino game has it’s own volatility level. However, some of the most common forms of investing in today’s financial market are as unpredictable as the most volatile casino games. We have always been told that when you buy property and/or a house, it’s value is pretty much guaranteed to go up. Could you have every predicted the crash in the housing market, which contrary to all “safe” investment practices, have actually lost value?

I could have never imagined that when my father-in-law had to take a new job and move from Florida to Delaware that his beautiful home would not be able to sell, and that his only option would be to settle for a buyout from his company, which was way below what he originally purchased the house for. In effect, it was an unlucky wager. He couldn’t hold out any longer, just like you can’t always hold out as long as you would like to at the Blackjack table. Sometimes you have to take your losses before it’s all gone.

So, where am I going with all this (besides the obvious fact that I’m trying to prove that casino gambling is no different than most other things we do with our money)? Well, in particular, I am trying to bring some attention toward the fight to ban online gambling in the United States. I mean, really, the Unlawful Internet Gambling Enforcement Act (UIGEA) is one of the most hypocritical laws ever to be passed. Congressman Barney Frank said himself, “the UIGEA is the stupidest law ever passed”, which is actually more apt, considering all the benefits that would come from regulating online gabling and the harm that will come by making it illegal and attempting to enforce an impossibility.

I certainly understand the concern about underage gambling and wanting to protect minors, which truly isn’t the foremost concern of politicians who support an online gambling ban (Believe me, the politicians who have spearheaded the UIGEA, have great backing by the land-based gambling industry, which predominantly considers online gambling a threat to its own welfare. Just do a search on the foremost proponent of the UIGEA – Senator Jon Kyl – and you will find an assortment of kick-backs from the brick ‘n mortar gambling and tobacco/alcohol industries).

However, banning online gambling will not stop minors from gambling at online casinos. Online casinos, especially those being run by inscrutable crooks, will find a way – just as they do to this day – to skirt around financial roadblocks and not only take money from minors, but cheat them out of their money. Even in today’s unregulated online gambling landscape, adult U.S. citizens are frequent victims of fraud and unfair odds. Of course, there are some reputable US online casinos doing business and holding offshore regulatory credentials. However, there are also online casinos being run my the Israeli mafia and being promoted to U.S. citizens.

Now, if the U.S. government would follow suit to Great Britain, where all forms of internet betting, including online casino gambling, poker and sports betting, are being effectively regulated – meaning that at a minimum fair odds are being ensured, and that underage/problem gambling is being effectively prevented and treated – the criminals would essentially be put out of business. It’s exactly the same thing that happened with prohibition, and unless the U.S. government does not wake up and take address of its own hypocrisy, billions of dollars will be wasted, and all the while U.S. citizens – many of whom will be taken advantage of – will continue gambling online.

American Banking Association Openly Criticizes U.S. Online Gambling Ban

Friday, April 23rd, 2010

As the day looms closer in which the Unlawful Internet Gambling Enforcement Act (UIGEA), aka, the U.S. online gambling ban, is mandated for enforcement, U.S. financial institutions are expressing – once again – their displeasure with the highly flawed and otherwise unenforceable law.

Why all the groaning from private banks and not the Federal Treasury? You would think it’s because of a loss in revenue, would you not? However, while billions of dollars do indeed stand to be lost (for both private companies and the federal government), the resistance being expressed by the financial industry has more to do with the actual nature of the UIGEA itself.

Placing all of the enforcement responsibility, i.e., blocking online gambling transactions, on the financial industry, the UIGEA is essentially imposing an impossible task, while creating new costs that are only going to spill over onto tax payers. In other words, not only will the UIGEA be impossible to enforce – meaning online gambling will continue in the US – the federal government will lose badly needed tax revenue that would have come from regulation, while imposing more costs on tax payers and financial institutions, that will consequently roll over on U.S. consumers.

Sure, it sounds like a good argument, but where’s the proof? Well, according to none other than Steve Kenneally – the VP of the American Bankers Association – which represents over 90% of the financial institutions doing business in America, the UIGEA is simply the wrong answer.

Keneally opines that not only is it nigh impossible to identify which online gambling transactions are legal or illegal (the UIGEA is full of carve-outs for fantasy sports and horse racing), let alone that a transaction can be detected as an online wager period, there will indeed be a considerable amount of new costs that will inevitably carry over on consumers.

GOP Circulates Memo Tying Jack Abramoff with Online Gambling Interests

Saturday, April 17th, 2010

As time draws near in which either the Unlawful Internet Gambling Enforcement Act (UIGEA) begins to be enforced (as much as is possible, of course) or proposed legislation to overturn the UIGEA and regulate online casinos is passed, the Republican party is gearing up for a fight. As reported by the Washington Post, the latest “card” being played by the GOP is none other than Jack Abramoff.Recently circulated on Capitol Hill is a GOP-backed memo arguing that while Jack Abramoff’s shameful lobbying tactics and ties to Indian casinos certainly warrants the jail sentence he is currently serving, the lobbying firm that employed Abramoff, Greenberg Traurig, has itself, been employed by online gambling interests, including the Interactive Gaming Council (IGC) – a leading trade body formed of the biggest names in the online gambling industry and working to get online gambling legalized in North America.

In effect, the memo seeks to assert that it was Abramoff’s employer, Greenberg Traurig, that was in on the “criminal activities” carried out by Abramoff. But even if that was the case (however unlikely), the IGC never worked with Jack Abramoff in any capacity whatsoever. Furthermore, Abramoff was fired by the firm, apparently for doing things “his way”.

What may seem an ironic strategy, considering Jack Abramoff’s association with the Republican Party, could end up being a solid argument in the GOP’s fight against online gambling, or rather, fight to protect land-based gambling interests. The only flaw to their argument, is the fact that Abramoff was acting on his own and that his activities regarding Indian casinos had nothing at all to do with the work Greenberg Traurig was doing on behalf of online gambling interests. In other words, there is no solid base for argument to claim that Abramoff was connected with all of Greenberg Traurig’s clients.

In many ways, the attempts made by the GOP to squash the legalization of online gambling are paramount the same tactics used to get the UIGEA passed. Added as a last-minute attachment to a must-pass Port Security bill with provisions to block terrorist funding, the UIGEA was passed into law unawares to many of the politicians who voted for the port security bill.