Lawmakers agree to provision exempting checks from internet gambling bill

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The banking industry will not have to police online gambling sites and checks will be exempt from a measure that sailed through Congress late Friday night while most of the internet gambling industry was sound asleep.

Some banking industry officials had worried that the new law would make them responsible for blocking payments by check as well as credit card payments - a requirement they had said would be unworkable.

But those concerns were allayed when lawmakers agreed to a provision allowing the Treasury and the Fed to exempt checks from the requirement.

Experts said the system would not be fool-proof, but would bar the vast majority of bettors.

The measure was past in both the House and Senate after being attached to a popular port security bill. Attempts to restrict online gambling have been tried every year except one since 1998. In the end, lawmakers settled for a much more watered down version of the bill that exempts horse racing, fantasy sports and state lotteries.

The Federal Reserve has nine months to draft regulations once the President signs this bill into law, which could happen as early as this Wednesday.

Government officials are expected to propose a "coding-and-blocking" system that will identify and stop payment to online gambling sites, experts said. Many banks and credit card companies already voluntarily block internet gambling transactions using such a system. In fact, most online sports betting websites now downplay credit cards on their deposit pages.

Fearing a crash of its shares, both PartyGaming and 888.com both announced plans to pull out of the US market. Both will lose more than 65% of their customer base with PartyGaming in a much worse position. Some estimates suggest that PartyGaming's US business made up nearly 80% of its overall business.

Noted Legal Professor, I. Nelson Rose told PokerNews "Would-be presidential candidate Sen. Bill Frist warped the law-making process to score a few points with his right-wing religious base," he stated in the opening of our conversation. Professor Rose quickly moved on to his analysis of the bill by remarking, "The new law will be difficult to enforce. It only applies to "unlawful" gaming, but does not expand the reach of the main federal anti-gaming statute, the Wire Act. So, there are still going to be arguments that Internet poker, for example, is not unlawful."

"The new crime on transferring money only applies to gambling businesses," he continued. "Payment processors are not covered, unless prosecutors want to use theories of aiding and abetting. Treasury will make new regulations to require money transferors to identify and block funds from gambling sites. Banks will thus not be required to read paper checks."

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Sportingbet chief asks for support from United Kingdom and other online gambling jurisdictions
Sportingbet.com indicated on Tuesday it has every intention of staying in the US market following a bill passage late Friday that would limit some forms of online gambling transactions, specifically credit cards. The banking sector announced Monday that checks would be exempted.

But Sportingbet CEO, Nigel Payne, has asked for support from those countries who host online gambling operators such as his. He directed his Radio 4 comments more specifically to the United Kingdom, which begins licensing internet gambling businesses starting early 2007.

"We have the technological capability to carry on trading," Payne told BBC's Radio 4, adding, "The industry is just too vast ... and banks around the world don't take the same view as American legislature."

"(But) in the absence of tangible support from the U.K. government or the European Union, carrying on is much more difficult.

"There is the technology, but if the government doesn't say that this is absurd protectionism, then it's very difficult to carry on," said Payne.

Sportingbet, whose former non-executive chairman Peter Dicks was recently detained in the U.S. as the crackdown on gaming began, abandoned takeover talks with its smaller rival, World Gaming PLC (WGMGY), after Friday's move.
The news sent shares tumbling.

PartyGaming - the world's biggest online gaming company and a constituent of the FTSE 100 - closed at 45 pence, vastly below last year's initial public offer price of 116 pence. That company announced yesterday it would be leaving the US market.

Sportingbet ended at 66p, while 888 Holdings PLC (888.LN) closed at 108.25p. U.K. online money transfer company NETeller PLC (NLR.LN) also felt the heat, closing much lower on the day.

Analysts at Dresdner Kleinwort said: "We do not believe this [law] is the end game. This could be construed as a violation of civil rights and promoting a chilling effect on free speech in the US." Experts highlighted that the bill includes carve-outs for a number of other online gambling activities including horse racing, Indian tribes, intrastate activities and fantasy sports.

"This represents protectionism and is in contradiction of the World Trade Organisation ruling in the US versus Antigua and Barbuda case," said Dresdner. The WTO ruled in 2004 that the current US administration was infringing on the trade rights of Antiguan online gaming and poker sites.

Even the American Gaming Association, which represents the traditional casino industry in gambling mecca's like Las Vegas and Atlantic City, said the new bill was a "bad idea." AGA chief executive Frank Fahrenkopf said his group wanted a federal commission to study whether the technology exists to go after under-age gambling on the Internet while regulating and taxing above-board websites.

"I still think the next Congress will pass such a measure," he said.

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World Trade Organization will be key to implementation of internet gambling bill
It was big news in the online gaming world. Antigua bested the US in a case
brought before the World Trade Organization (WTO). The US appealed and still
the WTO ruled against them. Although the US assured the WTO they would
comply, they have yet to do so. Ron Z. Mendelson, director of
OffshoreXplorer.com, had this to say, "Not only has the US failed to comply
with the WTO ruling, they seem to have gone the other way. They have even
gone so far as to arrest foreign citizens on US soil on charges that relate
to the online gaming industry."

With the US failing to implement the changes required by the WTO, they have
now asked for help from the WTO with regards to a dispute between them and
China. The US feels China is imposing charges that unfairly discriminate
against imported auto parts and that they are in violation of their WTO
obligations. This sounds very much like the charges brought against the US
in their dispute with Antigua.

"The question is," says Mendelson, "why does the US think they can ignore a
ruling made against them and then expect aid in a similar case when they
feel they have been the ones who were wronged. It seems as thought they want
to have their cake and eat it too."

It is clear that the US has its own agenda when it comes to the online
gaming industry. However, it seems that they are not willing to respect a
system that has been set up to help ensure fair and equitable trade across
international borders. It seems they are only interested in the rulings of
the WTO when it is to their benefit. When it isn't, it is simply ignored.

There is always the option of revoking the US WTO membership altogether, but
considering the US is the foremost international trader in the world this is
hardly the answer to the problem. It would be more beneficial to get the
point across by requiring the US to meet all the obligations set forth by
the WTO and settles once and for all the conditions resulting from the
dispute with Antigua. Until this happens, they should not be given aid in
their own dispute with China. Let them show their respect for the WTO and
the global community in order to prove they are worthy of the aid they have
requested. Otherwise, they will only receive the message that they are free
to use and abuse the WTO's rulings, recommendations, and regulations and
this hardly seems fair.

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[BettorsChat]

On Friday 29 September 2006, the US Congress passed legislation which includes certain provisions to prohibit unlawful internet gambling through the restriction of payments to such sites.

The Bill states that there will be a period of up to 9 months for the US regulators to prescribe regulations requiring each designated payment system and all participants therein to identify and block or otherwise prevent or prohibit restricted transactions.

It is currently unclear how NETELLER, a European company, with no assets, presence or employees in the US, would be affected by this bill. Once the regulations have been written, NETELLER will have a clearer view of which companies are affected, how those companies will be expected to comply, and any possible resulting impact on NETELLER and its US facing business.

NETELLER continues to operate its business as normal.

Over 3 million customers in 160 countries trust NETELLER to transfer over $7 billion each year. NETELLER (UK) Limited is authorised and regulated in the United Kingdom by the Financial Services Authority and listed on the AIM market of the London Stock Exchange. To protect its customers’ money, all deposited, in-transit, and un-cleared funds are held in Trust Accounts.

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Internet gambling bill will inconvenience gamblers but not prosecute them
Nowhere in the language of a bill passed late Friday night to curb internet gambling is there any mention of gamblers being prosecuted for placing bets or playing poker online. In fact, the new bill does not apply to gamblers at all other than to make it a little more difficult to fund online betting and poker accounts.

Online gambling transactions will be the focus of a Thursday meeting in London among third party payment processors.

"The passage of this legislation has had me working non-stop to get geared up for this battle," said one attorney who represents a major payment processor catering to the online gambling community. "Hopefully the collective legal minds at the meeting in London, as well as counsel for other interested parties, can launch a attack and/or approach to adaptation to the regulations."

One Republican politician we spoke to Saturday had this to say:

"The bill affects Visa/Mastercard transactions and it is getting impossible to use these cards anyway (for online gambling transactions.
"The bill is very 'watered down' in terms of language which gives ISPs plenty of wiggle room if they did not know they were enabling consumers to reach gaming sites. It is not a big deal."

The banking sector has already stated it will be close to impossible to monitor electronic checks, fast becoming the payment option of choice for today's web surfers.

It's not just online gambling government is trying to regulate over the world wide web.....now they are going after internet dating services. Yikes.

Several states are cracking down on the online dating industry, proposing new laws that would, among other things, mandate criminal background checks on all those looking for love on the Internet.

To date, New York is the only state that has a law regulating online dating sites, but six other states have introduced similar legislation mainly in the last year. They are California, Florida, Michigan, Ohio, Virginia and Texas.

Lawmakers seeking to regulate the online dating scene claim that the industry isn't doing enough to police itself, and consequently, is putting vulnerable people at risk of meeting up with predators.

Proposed legislation has varied from state to state, with some states wanting to make criminal background checks mandatory, and others wanting online companies to alert surfers upfront that background checks on potential dates have not been done.

Another bill sneaked its way through Congress recently that would hold online networking site MySpace.com liable for any harm that comes as a result of unmonitored predators utilizing the popular website. Ouch!

[BettorsChat]

Bet365

We regret to inform you that due to recent legal developments, we no longer accept customers who are resident in the United States of America. Please accept our sincere apologies for any inconvenience this may cause.

If you wish to withdraw your funds, please contact us and one of our highly trained customer service team will be available to help. Please note, any unsettled sports bets will be settled in the normal way.

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Tiny Antigua is center of international pressure on ‘protectionist’ U.S. online gambling law.
October 6, 2006

The center of the online gambling universe has shifted to tiny Antigua, which has emerged as the industry’s best option to overturn or amend a U.S. law that makes online gambling illegal.



It’s a long shot, but the industry will attempt to bring additional international pressure on the United States on the grounds that the law is protectionist and discriminatory (see Net Gambling Feels Aftershocks).



The chief executive of United Kingdom-based Sportingbet, Nigel Payne, is currently on the 108-square-mile island conferring with the Antiguan government. Many of the large online gambling firms licensed in Antigua are also in touch with the government.



The Antiguan government is in the process of amending its complaint to the World Trade Organization to include the latest U.S. law, which the government believes is at odds with a 2005 ruling made by the WTO. The WTO ruled in Antigua’s favor in the trade dispute with the U.S.



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The WTO ruled last year that the U.S. has inconsistently applied gaming laws so as to prejudice foreign countries, in violation of the General Agreement on Trade in Services (GATS). Both the U.S. and Antigua are GATS signatories.



The Antiguan government is charging that the new U.S. online gambling law, the Unlawful Internet Gambling Enforcement Act of 2006, is similarly protectionist and discriminatory, and adds more weight to its side of the dispute.



“The new law underscores our position that the U.S. is just passing laws that further entrench their discriminatory measures, and they are not allowing Antigua market access pursuant to the commitment that they made,” said an Antiguan government official who requested anonymity.



Pyrrhic Victory

Antigua and Barbuda, a twin-island nation, is home to 44 online gaming licensees, of which 17 are legal and regulated online gambling firms headquartered in the country.



“We have very strong money-laundering and anti-terrorism guidelines,” said the government official. “Our gaming companies are subject to the same sort of requirements and regulations as our financial institutions. They have to be audited externally.”



The U.S. has claimed victory in the WTO outcome, in part because of the dense, diplomatic language that is standard in these rulings. But most observers agree that the WTO has clearly ruled against the U.S.



However, a victory for Antigua could be Pyrrhic. If the U.S. decides to ignore or reject the WTO ruling, Antigua could impose sanctions against the U.S., but the move would likely hurt Antigua far more than it would the U.S. Additional international pressure is the preferred reaction for Antigua.



The Antiguan government, through its U.S. ambassador, formally protested the bill on Thursday with the U.S. State Department. The country’s Prime Minister, Hon. Baldwyn Spencer, sent a letter of protest to U.S. President George W. Bush.



“The U.S. government wants to enjoy the benefits of the WTO, but it does not want to be obligated by the tenets of international law when it rules against it,” the official said.



Contact the writer: [email protected]

[amhlilhaus]

Even the American Gaming Association, which represents the traditional casino industry in gambling mecca's like Las Vegas and Atlantic City, said the new bill was a "bad idea." AGA chief executive Frank Fahrenkopf said his group wanted a federal commission to study whether the technology exists to go after under-age gambling on the Internet while regulating and taxing above-board websites.

"I still think the next Congress will pass such a measure," he said.


so is this the first step to legalizing internet gambling in the united states? I sure hope so.