A section by section breakdown of the Gambling Bill with commentary.....

vanzack · Sep 30, 2006

I am going to attempt to decipher the Legislation passed last night by disecting the bill itself. Keep in mind – I am not a legal expert – I am just a normal guy who has read the bill 10 times and am going to take a stab at clarification.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com

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The bill that pertains to gambling starts on page 213 of this document and runs through page 244. Use that document as reference.<o

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The law is has subchapters 5361 through 5367.<o

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5361: deals with the reasons congress felt the need to do this. It is short – runs through line 17 of page 214.<o

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5362: definitions of terms to be used in the bill.<o

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It defines:<o

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1. Bet or Wager on pages 215 through line 11 on page 219. This is where they carve out horse racing and lotteries etc.<o

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2. Business of Betting or Wagering on line 12 of page 219. This is defining a sportsbook or poker site or online casino.<o

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3. Designated Payment System on line 17 of page 219. This is the method (such as EFT) by which a transfer of funds can be made.<o

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4. Financial Transaction Provider on line 4 of page 220. This is your neteller, cc’s, WU, banks etc.<o

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5. Internet on line 15 of page 220. We all know what the internet is – congress probably doesn’t.<o

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6. Interactive Computer Service on line 18 of page 220. This is a tricky one and a very important one. I have been told that this is not ISP’s, but this is companies that own servers. The importance is coming later in the document.<o

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7. Restricted Transactions on line 1 of page 221. Self explanatory.<o

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8. Secretary and State. <o

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9. Unlawful Internet Gambling that starts on line 13 of page 221 and runs through line 2 of page 228. 7 pages are devoted to spelling out this definition. This is where it says that betting on poker or sports is different than betting in a casino or horse racing. Very long, but pretty straight forward.<o

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10. Other terms that starts on line 3 of page 228 and runs through the end of page 229. This defines credit cars, efts etc – obvious stuff.<o

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5363: Describes the prohibition on ACCEPTANCE of any financial instrument for unlawful internet gambling (see definition above). This is the meat of the bill and is only about one and a half pages long. It says that no person engaged in the business of betting (bookmaker) may accept:<o

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1. Credit including cc’s <o

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2. An eft. <o

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3. Check, draft, or similar instrument <o

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4. Any proceeds (a catch all)<o

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5364: Policies and procedures to identify and prevent restricted transactions.
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A. Regulations: On line 7 of page 231 it states that there will be a 270 day period where a board including the Federal Reserve System and the Attorney General will prescribe regulations for which the banks and payment processors need to follow.<o

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The goal of these policies and procedures is outlined on page 232 and they are basically saying that they need to identify and block the transactions and give the operators a procedure to follow.<o

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B. Requirements for Policies and procedures. On line 12 of page 232 they talk about the requirements of this board to come up with procedures.<o

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C. Compliance: Line 19 page 233. Talks about when operators of financial transactions are in compliance. <o

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D. No liability for blocking or refusing transactions: Line 16 page 234. This one scares me a little. It basically said that the operator (your bank) cant be held responsible for blocking a transaction if they think it is gambling related.<o

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E. Regulatory enforcement. Line 10 page 235. Which govt agencies will enforce this.<o

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5365: Civil remedies. Line 3 page 236.<o

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This subchapter is devoted to how the Govt courts and Attorney General may enforce the law.<o

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Jurisdiction.<o></o>
Proceedings. Line 11 page 236. This talks about the procedures of how an attorney general can prosecute. Seems like pretty standard stuff and nothing unique to this bill.<o></o>
Limitation relating to Interactive Computer Services. Line 1 page 239. This is a key section and it all comes down to the definition of “interactive computer services”. In subparagraph A, line 6 page 239, it states that disabling access and removing links to online sites is necessary THAT RESIDE ON A COMPUTER SERVER THAT SUCH SERVICE CONTROLS AND OPERATES. From what I understand, this means hosting services, not ISP’s. So if a <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-comffice:smarttags" /><st1:country-region><st1lace><st1:country-region><st1lace>US</st1lace></st1:country-region></st1lace></st1:country-region> company is hosting Pinnacle, they have to stop and not provide access. This is yet to be clarified and I am not ruling out that this includes ISP’s, but it is my opinion right now that it does not include ISP’s.<o></o>
Limitations on injunctions against regulated persons. Line 5 page 241.<o> </o>

5366: Criminal penalties. Line 15 page 241.<o

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This goes through the penalties for the PROVIDER if they are in violation.<o

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5367: Circumventions prohibited. Line 4 page 242. This basically redefines that if you are in the business of taking bets, this law applies to you.<o

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In conclusion, this is my opinion of how this will effect the average gambler:<o

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Neteller might go away. It will be their choice, but they may decide not to take American Customers. They are not subject to this law as they are a foreign based banking operation – but they might abide by it.<o></o>
There is a 270 day period to figure out how to enforce it. Right now there is no way because there is no coding of EFT’s. It is possible that they might not even find a way to do this or it might be too expensive.<o></o>
Nothing in this bill criminalizes your behavior as the bettor.<o></o>
Nothing in this bill criminalizes you if you are not a bookmaking operation and you send or receive payments.<o></o>
The responsibility is on US banking, payment processors, and epayment services to stop this.<o></o>
American hosts of illegal gambling websites will have to stop. I do not believe that ISP’s have anything to do with this and there will be no attempt to block pinnacle from getting to your computer.<o></o>

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Please remember. I am just a normal guy who has read this thing 10 times. I am not a legal expert. But the language is written very clearly in most places and I don’t think there is anything I am misinterpreting or misunderstanding.<o

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Lets try to keep this discussion NONPOLITICAL and FACUTAL. If you have a difference of opinion, please reference the line and page of the bill and state your case.<o

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GL

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TTinCO · Sep 30, 2006

I don't see Neteller going away, and if I'm correct in that, then this should be of little concern to any player. I honestly think that everyone is blowing the implications of this WAY out of proportion.

Good stuff Vanzack

mvbski · Sep 30, 2006

TTinCO said:
I don't see Neteller going away, and if I'm correct in that, then this should be of little concern to any player. I honestly think that everyone is blowing the implications of this WAY out of proportion.

Good stuff Vanzack

This is what Neteller had to say about this back in July

'If it was to go through the Senate, they have provided a period of 270 days to look at the regulations and try to determine exactly how the bill will be implemented. We are not overly concerned at this point in time.'

vanzack · Sep 30, 2006

It will be netellers choice because the responsibility will fall on the shoulders of US banks to not allow the transfers.

Neteller is not under US jurisdiction. It will just be a matter of business to them.

sean1 · Sep 30, 2006

AS I understand it, in 2037, congress will convene to update the Frist Internet gambling bill because it is vague and has not been enforced.

Discussion will include how internet gambling is related to ports as it is now available on all cruise liners.

Have a good one.

Sean

sean1 · Sep 30, 2006

Neteller would be simply idiots to close down their business.

There is absolutely nothing in the wire act or this bill that says foreign banks can not do business with US customers. There is also nothing in either of these bills that says a foreign bank is acting as a criminal if they provide funds to casinos or sportsbooks. Even the US knows they can't regulate foreign banks. They can try to regulate foreign sportsbooks, but good luck telling Barclay Bank or Bank of London or Bank of HOng Kong how to act - the US is lucky these banks volunteerily decide to block terrorist money.

Sean

vanzack · Sep 30, 2006

sean1 said:
Neteller would be simply idiots to close down their business.

There is absolutely nothing in the wire act or this bill that says foreign banks can not do business with US customers. There is also nothing in either of these bills that says a foreign bank is acting as a criminal if they provide funds to casinos or sportsbooks. Even the US knows they can't regulate foreign banks. They can try to regulate foreign sportsbooks, but good luck telling Barclay Bank or Bank of London or Bank of HOng Kong how to act - the US is lucky these banks volunteerily decide to block terrorist money.

Sean

I agree with your summation.

but it will be netellers choice.

Ronald · Sep 30, 2006

Doesn't subchaper 5363 prohibit players from accepting EFTs, checks, etc?

Arent we as players considered to be a "person engaged in the business of betting or wagering" ? If so, wouldnt that make it illegal for us to accept funds from a sportsbook or from Neteller? Couldnt we as players be prosecuted for receiving our winnings, regardless of the method by which they are sent to us?

sean1 · Sep 30, 2006

Prior federal law has defined the business of betting as accepting wagers for 4 weeks, involving 5 or more people, or of more than $2000 on a single day.

They did not redefine business of betting, so it would seem written federal law would be a damn good defense.

That being said, your best defense is hoping you are not the 1/40M they decide to prosecute first.

Remember they have to prosecute in federal court. AS it is, federal court is months behind. Good luck.

Sean

TTinCO · Sep 30, 2006

Hell will freeze over (repeatedly) before gamblers\players are tried in a federal court.

Anyone who thinks that this is even a remote possibility needs to have their head examined.

sean1 · Sep 30, 2006

The DOJ and Frist have both said so much...

Sean

Anonymous1 · Sep 30, 2006

Well...what about CASH...just like a local only rather than meet up at a bar or golf course...you use FED EX...UPS etc...

SVT_Cobra · Sep 30, 2006

What is the bill number?

Woody0 · Sep 30, 2006

vanzack said:
There is a 270 day period to figure out how to enforce it. Right now there is no way because there is no coding of EFT’s. It is possible that they might not even find a way to do this or it might be too expensive. <o></o>

There is no way that the US will be able to code EFT's.

Political comment: The European Commission is still considering suing the Belgian government for non-compliance of EU law over the US strong arming of SWIFT into supplying customer data on financial transfers (SWIFT, the Society for Worldwide Interbank Financial Telecommunication, is located in Belgium).

http://www.forbes.com/markets/feeds/afx/2006/09/29/afx3054577.html

Quite apart from any technical problems with coding 11 million daily transactions, the US no longer has any political capital to spend with the Europeans. They destroyed that possibility by secretly spying and there is no way they could put online gambling on the agenda for an international agreement and have it seriously considered in Europe.

Rawpimple · Sep 30, 2006

Excuse my extreme ignorance but this bill does not go into effect until next year?

Meaning banks, bookies, sportsbooks are still not violating law until the President signs the bill, correct? In other words these insititutions are not violating the law today?

I am assuming with 99.9% confidence that the bill will be enacted sometime in 2007 and until then we can all gamble and send and receive funds until we pass out without violating this bill.

sean1 · Sep 30, 2006

The bill goes into effect when the president signs it - probably next week.

Books have been breaking the law since the 60s, so nothing changes.

Banks have 270 days to try to comply. Some may try to comply sooner. In my opinion given 27000 days, they wont be able to do so.

There is also the question of whether the government can tell banks and credit unions what to do. Some may file court cases. Some may decline their FDIC insurance and become funds instead of banks... Would you leave your money at Citibank if it was not FDIC insured, but made 6% instead of 1%? They likely lose far more than 5% dealing with bank regulations... Don't be surprised if some banks say enough is enough and say screw FDIC insurance, we'll become an investment fund.

Sean

SVT_Cobra · Sep 30, 2006

This is also in direct violation with the WTO ruling against the US.

TTinCO · Sep 30, 2006

SVT_Cobra said:
This is also in direct violation with the WTO ruling against the US.

I'd have to think that it's been made pretty clear that the US is flat out ignoring whatever "ruling" the WTO issues.

Sad but true

SVT_Cobra · Sep 30, 2006

TTinCO said:
I'd have to think that it's been made pretty clear that the US is flat out ignoring whatever "ruling" the WTO issues.

Sad but true

That's why the WTO has the power to create trade sanctions. What do you think NIKE will say when they can't produce their $100 sneakers in China for $2? Just one example.

bigcajones · Sep 30, 2006

When this becomes Law

The Internet Gambling Ban becomes law when the president signs the main bill (port security), but since congress has adjourned for 5 weeks, this bill cannot become law without the signature of the president.

I think people need to check very carefully with a legal beagal in your home state as to exactly what the laws are w.r.t. gambling (in hawaii for example, it's illegal to gamble, so if the local authorities wanted to prosecute someone, they could).

Also, the Wire Act of the 1960's hasn't been found unconstitutional by any court in the US, so what I can't figure out is how some people on here would think the internet gambling ban would be unconstitutional?

Food for thought, folks.