Will Online Gaming from the US End?
October 09, 2006  
2006 Randy Saylor  

The recent passage of the Safe Port Act by the United States’ Congress would seem to have no bearing on online poker players or casino patrons, save for a virtual last-minute amendment that has gaming operators around the world scrambling to figure out their liabilities and rights. Nearly immediately before the Safe Port Act was voted on, an amendment entitled the Unlawful Internet Gambling Enforcement Act was tacked on.

What Does the UIGE have to do with Port Security?

Nothing. The UIGE was tacked on to the Safe Port Act at the last minute as a political maneuver, allowing its proponents to have a virtual certainty of getting it passed. If the UIGE Act had stood on its own, the likelihood that such low-priority legislation would have been voted on is low. By amending the Safe Port Act with unrelated legislation, the sponsors rode the coat tails of necessary legislation. The Safe Port Act was deemed necessary because it gives the administration necessary powers and funding to tend to some potential security shortcomings in the nation’s container ports.

Many have asked why the Safe Port Act was approved by Congress by such an overwhelming margin despite the two-party system. The reality is that with an election coming in one month, it would have been political suicide for any member of the House of Representatives to vote against a key national security initiative. While we may debate the merits of the law, we certainly must respect the clever moves made by the politicians who forced this unnecessary and controversial legislation into the open.

What is the next step?

After the passage of the bill, it moves to the president, who has two weeks to sign it. It is believed that this will happen on Friday, October 13. (How ironic for those who consider Friday the 13th unlucky.)

After the bill is signed, the appropriate departments of the administration (notably the Department of the Treasury and the Department of Justice) will have 270 days to develop enforcement provisions and inform responsible parties of their rights and responsibilities under the law.

What does it mean for US Players?

This is the opinion of the Poker Players’ Alliance:

“First the bill does not make poker playing illegal on the Internet at a Federal Level, although it will make it much more difficult to enjoy ‘your game’ on-line…this bill provides additional enforcement powers to the Wire Act that will presumably be applied to wagering on Poker. Although Poker is a skill game and even the Department of Justice recently testified in the April 2006 Judiciary Hearing that “games subject to chance” clause may not apply to “games such as Poker”, it is likely that they will take a broad brush approach to enforcement and use these tools defined by this prohibition act to restrict your ability to access poker sites and fund your accounts as you have done in previously.”

It is unfortunate that the skill game aspect of poker will have no effect on the enforcement; therefore poker sites will receive no exemption from the banking restrictions. While there is certainly a chance aspect to poker, especially in the short term, poker proponents had always relied on the California interpretation of poker as a skill game rather than a gambling game. No such approach is likely to be taken by the federal bureaucracy.

What are the provisions?

Essentially, there are two major aspects on enforcement: financial institutions and internet service providers. Financial institutions such as banks, credit card issuers, and wire services are required to prevent transactions to known illegal gambling providers. Internet service providers will be forced to prevent hyperlinks from sites hosted on their servers to link to known illegal gambling sites. Gambling-related portal sites hosted on US servers will be targets of these provisions.

Potential legal challenges to the legislation will likely center on two areas: the term “illegal internet gambling,” and the restriction of trade provisions for ISPs/gambling portals. “Illegal internet gambling” is a dubious term at best, and poker site operators based and/or hosted in the US can successfully argue that some or all of their clientele comes from outside the United States. Concerns that site operators could be considered to be “aiding and abetting” criminal activity may arise.

What about Neteller, FirePay, et al?

These questions remain to be answered. As e-wallet services based outside US jurisdiction, the immediate response would be that as a Neteller client, I would simply be making EFT transactions to/from my offshore bank account, which should remain unrestricted. As long as a site based outside the US allows me as a player, and said site does not receive a funds transfer from within the US, and I am breaking no law by actually playing a game of skill, then there is no apparent conflict. If the e-wallets expanded their offerings to a broader selection of merchants, this consideration would be even more valid.

What does the future hold for US and other players?

The biggest concern in the short term will be how the law changes affect our selection of potential operators. The long-term concerns, valid for players in other countries as well, are about the levels of our competition. If the barriers to entry as a potential player seem too high, too many of our potential fish will swim in other waters. This is something that should scare us all.

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