Current State of Offshore Sports Betting for Americans

[ravenmaniac]

http://www.***********/articles/colu...aspx?theArt=23.

I know this isn't going to be posted but this is a a very interesting article about the reality of offshore sports betting for Americans that I think everyone who is using or thinking of using an offshore sportsbook should read. As a result I hope the mods let it go.

[WayneChung]

http://www.***********/articles/colu...aspx?theArt=23.

I know this isn't going to be posted but this is a a very interesting article about the reality of offshore sports betting for Americans that I think everyone who is using or thinking of using an offshore sportsbook should read. As a result I hope the mods let it go.

clicked on it brother raven,nothing there,i smell communism-LOL !!!!

[WayneChung]

if you don't mind brother raven,email it to spark and he can shoot it to me,would like to read it.......

[WayneChung]

clicked on it brother raven,nothing there,i smell communism-LOL !!!!

before anybody jumps my shit,that was a joke.

[WayneChung]

if you don't mind brother raven,email it to spark and he can shoot it to me,would like to read it.......

bump........

[WayneChung]

if you don't mind brother raven,email it to spark and he can shoot it to me,would like to read it.......

found the article,excellent read,spot on.......

[ravenmaniac]

found the article,excellent read,spot on.......

Glad you found it Chunger. I agree with his overall assessment
of offshore betting.

[garth]

clicked on it brother raven,nothing there,i smell communism-LOL !!!!

I'd like to read the article but apparently that's not possible. Geez.....

[garth]

clicked on it brother raven,nothing there,i smell communism-LOL !!!!

That's correct, Chunger. It is indeed communism.

[Spark]

I'd like to read the article but apparently that's not possible. Geez.....

Chunger/maniac ... Pls email me the link ... thanks

[Spark]

maniac ... let me know if this is it .. Thanks

FreedomAtStake's Blog

The New Realities for American Sports Bettors, Part I

By FreedomAtStake | View all Posts

Posted Monday, May 30, 2011 01:34 PM   0 comments

This is a message for all Americans out there who like to wager on sports.

First of all, let me apologize. We at ***** have been doing this for 16 years now, and we often forget what it’s like to be relatively new to this activity. We tend to assume that everybody knows the “basic” information regarding customary practices and legalities and whatnot, when it really isn’t so. 

This lack of common knowledge hasn’t been a huge problem for the last few years, because the industry has evolved to serve newbies in a way that they didn’t need a lot of information to participate. Not to mention a few dirty secrets that were easier to sweep under the carpet.

But now that there has been a huge industry disruption, players are realizing that they don’t necessarily know what they have gotten themselves into and what the repercussions could be. They want to know the realities.

Well, one reality is that a lot of people are putting their heads in the sand right now. Not to mention a lot of misinformation and disinformation put out by people with personal and commercial agendas.

Because there are still a few US-facing sportsbooks out there, people assume this means it is business as usual. It isn't. There has been a sea-change in the industry and to ignore it is stupid.  The fact is more than half of the US-facing companies have left the market, one way or another, over the past couple of months. Maybe these changes are not affecting you directly, but you have to admit the landscape has changed. 

Therefore, there are several other realities that you, as an American sports bettor, are going to have to face.

1 - Whether you like it or not, the American government thinks you are a criminal.

Relax, you are NOT going to get arrested. 

The key word is that the government "thinks" you are a criminal, but you aren’t.  They tried to make a law going after the online bettor about 10 years ago, and it never passed. Since then, it has not been illegal for Americans to place wagers online, only to accept wagers from Americans. So you are not breaking any American laws.

That being said, there are a few individual states that have passed vague and ambiguous laws outlawing online gambling, but those laws are usually pretty unenforceable and generally ignored even by their own state law enforcement. Either way, though, it’s a good idea to consults a local attorney to find out for sure if your state has any specific laws against online gambling. You might even take this opportunity to quiz your state representative about his knowledge of the industry and let them know your opinion.

Regardless, this is all really splitting hairs. Yes, as a bettor you might not be technically breaking any laws, but that's simply because the government can't find a way to make a law against you that will pass. Rest assured, in their hearts they believe you are a criminal, and they want to stop you.

What this means is that you really have nowhere to go when you have a problem. If you get screwed over by a dodgy online operation, or the American government has seized your funds at an offshore sportsbook, politicians generally do not have much sympathy for you because they think you are getting your just deserves.

You can complain to your Congressman about the situation - and you definitely should, if only so that they might realize that online sports bettors are a lot more common and ordinary than they currently believe. But in the end, don't expect them to go to bat for you. Even if they were one of the enlightened few that realizes that sports betting is a pretty harmless hobby, they will likely not bring this matter up with their colleagues for fear of committing political suicide.

Maybe if you happened to be an online poker player... you might get some sympathy. Poker for some reason is viewed differently than other forms of gambling, and it is alright for a politician to approve of poker.

But sports gambling? Forget it. Ain't going to happen.

2 - This isn't going to change anytime soon.

Last week, I attended the IGaming Conference in Dublin, where Frank Fahrenkopf Jr., head of the American Gaming Association, was a keynote speaker.

Fahrenkopf has been a gaming lobbyist for decades. He knows the landscape. He knows how to straddle a fence while keeping both ears to the ground. 

This is a guy who has managed to maintain the completely untenable political position that the AGA supports online gaming legalization and regulation because Americans should be allowed to spend their money where they please, while at the same time promoting that all current online operators are criminals who should be hunted down and prosecuted to the fullest extent of the law. Consistency is apparently not a requisite for lobbyists.

Regardless, what does Fahrenkopf think about the future of online gambling?

He predicts that a bill legalizing online poker will be launched by the fall and that it will pass. He thinks that this will be a nice gateway to eventually legalize other online casino games within a few years.

Great! What does he think about the possibility of legalizing sports gambling?

I'm going to paraphrase him here, but his quote was something along the lines of, "Uh-uh. No way. Not gonna happen. Fuhgeddaboudit."

The current American laws sports gambling are so solid against the activity that it will take years just to get those laws unraveled, let alone get the practice legalized online. Witness the trouble New Jersey has had in getting sports gambling legalized - and New Jersey is a state that is quite familiar with gambling.

So - yeah – unless you live in Nevada, you can forget about that dream you had of someday being able to go online and take advantage of those sweet odds you saw at Caesars. 

Continuing from Part II...

3 - It is illegal for American banks to knowingly assist in the transfer of money to offshore gambling companies.

That is the basic gist of the much-hated UIGEA law of 2006. 

Banks are not allowed to process any financial instrument (ie. credit card transaction, wire transfer, checks, ACH transfer, e-wallet transfer, ATM withdrawal, gold, clams, cows, beads, etc.) that they believe to be related to offshore gambling.

That's the gist of it. And while the law happens to be very fuzzy about what constitutes "gambling", and exactly how these laws are to be enforced, it is very clear that banks are not allowed to process gambling transactions. That part is clear.

You probably were aware of the general idea that banks aren’t allowed to process credit cards. But most people don't go to the next logical step and realize the widespread effects of this law. They think, "Well, once those offshore guys figure a way around it, it'll be business as usual."

Well that would be correct, and is exactly what has happened since 2006, but nobody really considers what it entails when "those offshore guys figure a way around it".

What it means is that, in order to get money moving between them and you, they need to find a way to transfer funds so that the American banking system is unaware what is happening, otherwise the banks are obliged to block it.

Now, there are old fashioned ways of transferring money which are not directly affected by the UIGEA law, such as mailing cash, using Western Union, hiring a mule to carry it across the border, etc. None of those are particularly safe, cheap or efficient.

So, if you are like most online bettors, you are thinking, "Yeah, but I still managed to pay my sportsbook using credit cards, or ACH, or whatever. And when I get paid, it usually comes via ACH, or a check, or whatever.

That's right. Those industrious offshore companies have found ways around the UIGEA.

And I'm not gonna give away their secret sauce, but it might involve disguising the payments so that the banks are not plausibly aware that these transactions are gambling related. I use the word "plausibly", because I find it hard to believe that any bank would really believe that Joe Smith from Idaho really purchased $500 of handmade maracas directly from a Costa Rican artisan. And if they were really interested, I'm sure the bank could ask you about that $350 check you received last month from that trucking company in Montana.

But - hey - American banks don't like the UIGEA anymore than you do. So they don't ask those questions.

But have you ever thought about the implications of what those offshore guys are doing and how they disguise their purposes to avoid detection by the financial system?

According to Wikipedia: "Money laundering is the practice of disguising the origins of illegally-obtained money. Ultimately, it is the process by which the proceeds of crime are made to appear legitimate."

Sound familiar? If accepting wagers from Americans is illegal, then any disguising of those funds is could be construed as money laundering. At least, that's what the feds are alleging against betEd and the poker sites.

So let’s connect the dots… If an American bank knowingly sees or processes a gambling payment in any sort of way, it is breaking the UIGEA law. If a sportsbook has disguised that payment to trick the banks, then the American government can construe that as money laundering. 

That's right. While you and the offshore operators try to convince yourselves that you are only responding to an unjust law in the only way possible, as far as the American government is concerned, those offshore companies are laundering money whether you like it or not. It would take a court of law to sort it out.

Now you can again relax. As the player, you are not doing anything illegal, which is part of the definition. As far as you are concerned, you are making a purchase and receiving a payment. You are doing nothing to disguise those payments, so you are not laundering money.

But if your money has been passing through the American financial system in any way whatsoever without being flagged as gambling by the banks, then either the banks are stupid or complicit, or your sportsbook is treading into troubled waters.

Continuing from Part III...

4 - What this means is that your money is in the hands of people who are considered money launderers by the US government. 

Again, you can choose to believe that your sportsbook operator of choice is really just rebelling against the tyranny of the US nanny state and is doing nothing wrong by simply supplying the demand that is the American sports bettor. Fighting an unjust law, and all that. 

I sympathize with that position, and even support you in your quest to spend your money where you want. I hope that these offshore operators fight the good fight and find every way imaginable to stick it in the face of the DOJ.

But the fact is that the US government takes a different view, no matter how stupid. And the brilliance of this latest move by the DOJ is this money laundering angle because it's a tough one to beat.

You see, money laundering is a special kind of crime in the international world. Money laundering can be used to hide the proceeds of narcotics sales, arms sales, and terrorism funding. Mostly though, it’s about taxation and finding out where rich Americans are hiding their money, but you'll never get the American government to admit that.

Anyway, over the past couple of decades the American government has gradually been bullying all of the other governments in the world to share their banking information with the USA. Basically, what they say is, "Hey Panama! Either you start cooperating with us, or we will block your banks' access to the massive American banking system. And that would effectively stall your economy, won't it?" So Panama signs a treaty with USA and another tax haven disappears.

After that, if Panama wants to keep the American government happy, then they have to cooperate in any kind of money laundering investigation that America launches. And that includes seizing any bank accounts that the Americans believe are being used to launder money. And they don't wait until due process has been followed either, you are guilty until proven innocent and that money is locked up and inaccessible.

You can see where I am going with this, right? 

This means that if you are wagering at an offshore sportsbook that takes US action, then your money is not going to be 100% safe as long as the American government might be able to bully the jurisdiction where that money sits. 

Luckily, there are still a few jurisdictions out there that don't allow themselves to be bullied by America - and many current offshore operations hopefully utilize those jurisdictions - but those jurisdictions are becoming more and more scarce. Frankly, it's only a matter of time. 

If your sportsbook has their money in a US-friendly jurisdiction, this means that the DOJ might do as they did with betEd and the poker sites and order a seizure of the money. In fact, it will inevitably happen.

But if your operator is playing in an unfriendly jurisdiction, then the Feds must instead try to intercept and block the transfer of your money as it moves between you and the operator. This is a never-ending game of cat-and-mouse that actually favors the operator more than the Feds, who really don't care enough to do the tedious stuff very well.

But the Feds are getting smarter about blocking the transactions, because it’s not rocket science. Basically, they sign up for one of these books, deposit some money, play for a few months, then make a withdrawal and follow the money. Somebody along the way is probably doing something illegal and the Feds jam them up. 

Fortunately, the remaining list of US-facing offshore companies are a cagey lot who have decades of experience in staying one step ahead of the Feds, and I actually feel pretty good that they will be able to dodge the Feds indefinitely. But that doesn't mean you should get complacent, because it's a new world with new realities.

There are ways to protect yourself, and very shortly Lou will be posting a how-to on ways to keep your money as safe as possible.

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[garth]

Thanks, Spark.

[ravenmaniac]

Yo0u go0t it Spark, Thanks

[WayneChung]

Yo0u go0t it Spark, Thanks

thanks big rave,i told pappi,i thought this was the right one,really good read,my english is terrible-would give anything if i could phrase things like this guy,i had to be good at math only-LOL-anyway once again-really good and interesting read !!!!

[BettorsChat]

When is the Cayman Islands going to cave to the DOJ?