O/T - Congress approves Internet gambling ban bill
stevek
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Congress approves Internet gambling ban bill
Sat Sep 30, 2006 12:54am ET
By Peter Kaplan
WASHINGTON (Reuters) - Most forms of Internet gambling would be banned under a bill that received final U.S. congressional approval early Saturday.
The House of Representatives and Senate approved the measure and sent it to President George W. Bush to sign into law.
The bill, a compromise between earlier versions passed by the two chambers, would make it illegal for banks and credit card companies to make payments to online gambling sites.
Democrats had accused Republicans of pushing the bill to placate its conservative base, particularly the religious right, before the November 7 congressional elections.
"It's been over 10 years in the making. The enforcement provisions provided by this bill will go a long way to stop these illegal online operations," said Sen. Jon Kyl, an Arizona Republican and a chief sponsor of the measure.
Negotiators from the Republican-led House and Senate reached a deal on the legislation Friday and attached it to unrelated legislation to bolster port security, which the Congress approved.
The final bill dropped earlier provisions opposed by some gaming interests that would have clarified that a 1961 federal law banning interstate telephone betting also covers an array of online gambling.
Investors in British-based gaming companies such as BETonSPORTS Plc, Partygaming Plc and 888 Holdings Plc have tracked the legislation.
Senate Majority Leader Bill Frist, a Tennessee Republican and potential 2008 presidential candidate, recently appeared at a hearing in Iowa -- the state that holds the first presidential nominating contest for the 2008 election -- to listen to concerns about Internet gambling.
Link to Article
Congress approves Internet gambling ban bill
Sat Sep 30, 2006 12:54am ET
By Peter Kaplan
WASHINGTON (Reuters) - Most forms of Internet gambling would be banned under a bill that received final U.S. congressional approval early Saturday.
The House of Representatives and Senate approved the measure and sent it to President George W. Bush to sign into law.
The bill, a compromise between earlier versions passed by the two chambers, would make it illegal for banks and credit card companies to make payments to online gambling sites.
Democrats had accused Republicans of pushing the bill to placate its conservative base, particularly the religious right, before the November 7 congressional elections.
"It's been over 10 years in the making. The enforcement provisions provided by this bill will go a long way to stop these illegal online operations," said Sen. Jon Kyl, an Arizona Republican and a chief sponsor of the measure.
Negotiators from the Republican-led House and Senate reached a deal on the legislation Friday and attached it to unrelated legislation to bolster port security, which the Congress approved.
The final bill dropped earlier provisions opposed by some gaming interests that would have clarified that a 1961 federal law banning interstate telephone betting also covers an array of online gambling.
Investors in British-based gaming companies such as BETonSPORTS Plc, Partygaming Plc and 888 Holdings Plc have tracked the legislation.
Senate Majority Leader Bill Frist, a Tennessee Republican and potential 2008 presidential candidate, recently appeared at a hearing in Iowa -- the state that holds the first presidential nominating contest for the 2008 election -- to listen to concerns about Internet gambling.
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I hope that the american public see this as yet another intrusion by these clowns in office, and vote them out on their asses in November.
Mark Mulder rookies
Chipper Jones rookies
Orlando Cabrera rookies
Lawrence Taylor
Sam Huff
Lavar Arrington
NY Giants
NY Yankees
NJ Nets
NJ Devils
1950s-1960s Topps NY Giants Team cards
Looking for Topps rookies as well.
References:
GregM13
VintageJeff
Mark Mulder rookies
Chipper Jones rookies
Orlando Cabrera rookies
Lawrence Taylor
Sam Huff
Lavar Arrington
NY Giants
NY Yankees
NJ Nets
NJ Devils
1950s-1960s Topps NY Giants Team cards
Looking for Topps rookies as well.
References:
GregM13
VintageJeff
Also, will this be the demise of most TV poker broadcasts? I doubt if PartyPoker or PokerStars is going to advertise on an American TV show when the viewers could not possibly gamble on their websites. No advertising revenue would basically mean no TV broadcast.
Party poker advertises partypoker.net, a "non-gambling" site. That's how they've been circumventing that.
I pay my taxes, and I do, and will continue to do whatever the hell I want to do with MY money.
<< <i>Most sites don't allow you to use your credit card anyway. Some places circumvent that by allowing you to buy a VIOP card or something to that affect.
Party poker advertises partypoker.net, a "non-gambling" site. That's how they've been circumventing that.
I pay my taxes, and I do, and will continue to do whatever the hell I want to do with MY money.
It will be illegal for you to do this. You ISP will be held too for not allowing you to partake in these activites... As a online poker player it blows.. You can read more about it on www.twoplustwo.com under the legislation sub forum...
270 days from when the president signs the bill is how long before it goes into action.
Here are the highlights as I see them. [Disclaimer: Although I was a lawyer at a top DC firm for 10 years, and worked on cases involving statutory interpretation all the way up the the US Supreme Court, I am -- at least was until 15 minutes ago, haha -- not a lawyer, I am (was) a professional poker player. Plus I've only had this text in front of me for like 30 minutes. This is therefore not intended to serve as legal advice.]
1. The Act, S.5363, prohibits anyone "engaged in the business of betting or wagering" from knowingly "accept"ing VIRTUALLY ANY type of credit, electornic funds transfer, check, or other "financial transaction" associated with "unlawful Internet Gambling."
2. "Interactive Computer Services" (s. 5365(c)): Only resposnible for disabling access to a site after notice from authorities specifying exactly what needs to be shut down, including the specific "hypertext link".
3. PENALTIES:
(A) CIVIL: On top of any state remedies, federal courts have jurisdiction to enjoin any violating transactions and to prevent future violations.
(B) CRIMINAL: Fines Under Title 18 (I don't know what that says) AND/OR up to 5 years in prison.
4. "Circumvention" (S. 5367): ISPs and financial institutions can't knowingly allow transactions/activity that violate the Act IF they "control" the bets or wagers.
ANALYSIS
First, it sure seems broad with respect to the types of financial transactions covered. Not good. Much depends on exacatly what the Fed's regs say, but it has broad authority if it wants to use it.
Second, the ISP-blocking piece seems relatively tame, applying only under specific circumstances, only on the instigation of federal authorities (no self-monitoring/enforcement requirement), and only to hyperlinks specifically identified by authorities (how'd ya like to have the job of constantly finding those links and telling ISPs to shut them down?). I'd be surprised if this ended up being a real problem, but admit I know virtually nothing about the technology involved in monitoring/disabling access to a site.
Finally, what I find particularly interesting/troubling is that the Act at least arguably applies to at least professional poker players, because it applies to the "accept"ance of any of the covered financial transactions by any "person engaged in the business of betting or wagering" (as long as the bet/wager is illegal under federal/state law; query whether playing poker as we do is in fact illegal under federal/state law). "Engaged in the business of betting or wagering" is not limited to the sites, at least not in this legislation (it may have been in case law somewhere, but I doubt it). Which in turn means that simply by "ACCEPTING" a cash-out using virtually any method currently available, at least "pro" players (i.e., those "in the business of betting or wagering") could be violating a statute that carries with it substantial civil penalties and up to a 5 year jail term. All of that said, similar language was included in other proposed bills and no-one seemed to think it applied to the players, so maybe they know something about this point that I don't. Please tell me they know something I don't.
An interesting perspective I've read about online poker today is how the pool of fish will totally dry up at basically all poker gambling websites. Someone like Brian (iamthegreatcornholio), highly intelligent, could probably easily find ways around these laws. But let's take someone like Guy (boopotts), also highly intelligent, and Brian who believe that online poker is a game of skill that can be beat. A "normal" fish I doubt very much is going to do things such as opening a foreign bank account, or write checks/money orders to third party sources to get to the poker websites, or basically go out of their way to do something now "highly" illegal just to play some online poker which they lose money at anyway. Many will just quit or if they have developed too much of an itch for poker, perhaps will find private poker games or play in casinos. Potential new online poker players, new fish, aren't likely to bother trying to play either.
So the point is that with basically no fish anymore, you're going to basically have nothing but the the smarter, more skilled, intelligent players playing...trying to beat each other's brains in all the while the house cut (rake) is grinding down their bankrolls.
I never believed that anyone could beat the game of online poker, but I respect the premise of those here that with so many fish out there, that they could make money by winning at a higher percentage rate than the rake percentage. But I doubt very much if even a very skilled online poker player will now believe that he could possibly beat the rake playing against other very skilled players.
So I think that basically nobody in the United States is going to want to go through the hassles of playing online poker. Probably some will for a variety of reasons, addiction being one of them, but I have to believe that this legislation will cut online poker playing in the United States to possibly 5% or less of what it was, possibly less than 1%.
<< <i>^^They never left. >>
They most DEFINATELY have not left.
-- Yogi Berra
<< <i>Thanks for posting that info. Some here know that I am an ex-gambler in recovery, it'll be four years on October 11th. I am against gambling but being such a longtime gambler, the topic still interests me and I enjoy discussing it. Discussing it doesn't trigger me in the least to want to go out and do it.
An interesting perspective I've read about online poker today is how the pool of fish will totally dry up at basically all poker gambling websites. Someone like Brian (iamthegreatcornholio), highly intelligent, could probably easily find ways around these laws. But let's take someone like Guy (boopotts), also highly intelligent, and Brian who believe that online poker is a game of skill that can be beat. A "normal" fish I doubt very much is going to do things such as opening a foreign bank account, or write checks/money orders to third party sources to get to the poker websites, or basically go out of their way to do something now "highly" illegal just to play some online poker which they lose money at anyway. Many will just quit or if they have developed too much of an itch for poker, perhaps will find private poker games or play in casinos. Potential new online poker players, new fish, aren't likely to bother trying to play either.
So the point is that with basically no fish anymore, you're going to basically have nothing but the the smarter, more skilled, intelligent players playing...trying to beat each other's brains in all the while the house cut (rake) is grinding down their bankrolls.
I never believed that anyone could beat the game of online poker, but I respect the premise of those here that with so many fish out there, that they could make money by winning at a higher percentage rate than the rake percentage. But I doubt very much if even a very skilled online poker player will now believe that he could possibly beat the rake playing against other very skilled players.
So I think that basically nobody in the United States is going to want to go through the hassles of playing online poker. Probably some will for a variety of reasons, addiction being one of them, but I have to believe that this legislation will cut online poker playing in the United States to possibly 5% or less of what it was, possibly less than 1%. >>
Great reply and yes your correct.. I mostly use online for donkaments only because I live in LA cardroom capital of the world. Its not the worst thing for me but for sure hurts the game, the Mainevent will be much smaller next year IMO
<< <i>OMFG anyone watch the london stock exchange open.... Partygaming down 33% 888.com down 40 percent, players worldwide are going nuts as Party poker and pokerstars issued statements saying if bill is signed in 7 days they will no longer accept us players! THiS sucks for the game of poker, kills our action and def takes the game a step back. >>
Wow, I hadn't heard that about PartyPoker and PokerStars - of course they are two of the biggest online poker sites. Since the legislation I don't believe would actually take effect until about nine months after signing, I'm a bit surprised that they would immediately take action like that in barring US players. However it's not totally surprising as in the past I've seen big corporations in other industries do this before after signed legislation even though it wasn't technically in effect yet.
There are some out there who feel the volume of players could be made up by "emerging " countries such as China. It won't be from China - they have some of the toughest anti-gambling laws in the world. Russia has now been cracking down on gambling as well. The European player market has probably peaked. There probably will be growth from the Asian market with gambling in general. However, most Asians prefer other types of gambling/poker games other than a Texas hold 'em and probably would be more likely to gamble on websites based in the Asian area. PartyPoker and PokerStars aren't going out of business, but certainly their growth potential at this point seems quite bleak.
A warning to anyone living in the US who owns a website with gambling affiliate programs, one member on here knows who he is - my advice is that you should get rid of that website ASAP. I think you are looking for big trouble if you don't - it's up to you.
The more I "analyze" what came down with this legislation, the more I see that the primary "instigators" of this were the horse racing and Indian casino lobbies - both very, VERY, powerful lobbies.
Also in my opinion, online gambling websites made a huge mistake in not doing more, MUCH MORE, to insure that underage gamblers were not gambling on their websites. Whatever they were doing in this regard, wasn't nearly good enough because far too many underage gamblers were gaining access to these gambling websites. Frankly, I believe that these gambling websites mostly turned a blind eye to the underage gamblers mainly of course because they wanted the added profits.
No matter who was the instigator of the legislation, there was still "motivation" needed by the politicians to enact it. Americans have a fairly high tolerance for adult behavior, but anyone who messes with children, Americans are going to come down hard on them. These gambling websites basically messed with underage people, especially college students who were gambling away all their money and going deeply in debt from online poker - that had to stop and that's a major thing the legislation is intended to do.
<< <i>Also, will this be the demise of most TV poker broadcasts? I doubt if PartyPoker or PokerStars is going to advertise on an American TV show when the viewers could not possibly gamble on their websites. No advertising revenue would basically mean no TV broadcast. >>
I thought these were free? It says so on TV!!
I have active accounts with both PokerStars and PartyPoker and have not received an email (which is their primary form of communication) about this. Additionally, I just went to both sites and neither have any type of disclaimer/notice/warning pop-up when you log onto their sites.
Edit: I found one news "source" which claims announcements will be made shortly
link
By Pete Harrison
2 hours, 50 minutes ago
LONDON (Reuters) - Online gambling firms faced their biggest-ever crisis on Monday after U.S. Congress passed legislation to end Internet gaming there, threatening jobs and wiping 3.5 billion pounds ($6.5 billion) off company values.
Britain's PartyGaming Plc, operator of leading Internet poker site PartyPoker.com, and rivals Sportingbet and 888 Plc said they would likely pull out of the United States, their biggest source of revenue.
"This development is a significant setback for our company, our shareholders, our players and our industry," PartyGaming Chief Executive Mitch Garber said.
The House of Representatives and Senate unexpectedly approved a bill early on Saturday that would make it illegal for banks and credit-card companies to make payments to online gambling sites.
The measure was sent to President George W. Bush to sign into law, which most analysts see as a certainty.
"We believe that this will have a very material impact on the long-term prospects of online gambling, and in particular poker," said analyst Julian Easthope at UBS. "This will lead to a rapid decline in the use of online poker sites."
PartyGaming generates about 78 percent of its revenue from the United States, while Sportingbet gets about 62 percent there.
CRACKDOWN
Shares in PartyGaming, which rakes in nearly $4 million a day from its 19 million customers, fell 57 percent by 1155 GMT.
Sportingbet, which owns sportsbook.com and ParadisePoker.com, lost 60 percent, 888 was down 33 percent and Austria's bwin.com fell 24 percent.
Bwin could be pushed to the brink, having paid heavily for Swedish online poker site Ongame earlier this year to gain access to the U.S. market, said Leopold Salcher, an analyst at Austria's RCB. "This could break their neck," he said.
Online gaming exploded in 2005 with a string of high-profile company flotations in London, which has become the industry's corporate center.
The bulk of revenue has always come from U.S. players, but the firms were located in offshore jurisdictions like Costa Rica and Antigua for fear of prosecution in the United States, where the legal status of online gaming and betting was uncertain.
Shares in Sportingbet and BETonSPORTS had already been hammered after recent arrests of senior executives on charges of illegal gambling in individual U.S. states, but investors remained hopeful online betting and gaming would not be completely banned at a federal level.
Meanwhile, big American corporations like Las Vegas-based Harrah's Entertainment Inc. were forced to sit on the sidelines as gaming money streamed out of the country.
PartyGaming said in a statement, "If the President signs the act into law, the company will suspend all real money gaming business with U.S. residents."
"Any such suspension would also result in the group's financial performance falling significantly short of consensus forecasts for 2006 and 2007," it added.
MERGER SCRAPPED
Stephen Whittaker, joint chief investment officer at Britain's New Star Asset Management, said the likely ban could be challenged.
"This represents protectionism, and the WTO have said you can't do that," said Whittaker, whose portfolio includes about 2 percent of online gaming stocks. "Overall, we'll probably remain with most of our holdings."
"We'll probably reduce one, maybe two," he added. "We want to let the dust settle a bit -- it will take a few days."
Sportingbet said a ban would hit trading and it would scrap a planned merger with World Gaming as a result.
888 Plc said the move would hit its results, as did gaming software provider Playtech, whose shares fell 42 percent.
But Paul Leyland at Arbuthnot Securities said Playtech was relatively well positioned. "The only company for which you could categorically say that redeployment is easy is Playtech," he said. "But for the others it's much more difficult."
A ban would also hit payment processors such as Neteller Plc and Optimal Group's FireOne subsidiary.
Absolute joke. About as funny as them telling me I have to wear a seatbelt.
ALL of my extra money, which isn't much, that I use to buy cards with comes from internet poker.
I tried to empty my party poker account last night until I see what happens.
Anyone think I'll actually get paid??
I play extremely low limit as that's all my financial situation will allow, but generally win $50 a week. Somehow I won $300+ playing $2-$4 last night and am petrified I won't be able to get my hands on my biggest winning session to date.
Stevek, while I'll agree that there should be a stop to underage gambling, I don't think we should lump 19-23 year old college kids as underage. I think what would've helped is never allowing credit card payments through any venue, only using checking accounts (like I do). Then at least one couldn't run up a huge gambling debt and only lost what they had. Perhaps??
shawn
<< <i>I tried to empty my party poker account last night until I see what happens.
Anyone think I'll actually get paid?? >>
Most sites claim to have banks that hold the money from gaming, so you're supposed to get it from them no matter what the site does... Not sure what happens here, but I have a lot of money on poker sites and would like to think it's coming back to me, but I guess one never does know until it shows up. I guess I can always transfer it to my brother-in-laws account if need be (he's in Lebanon) and he can then cash out and send it to me
<< <i>Thanks for posting that info. Some here know that I am an ex-gambler in recovery, it'll be four years on October 11th. I am against gambling but being such a longtime gambler, the topic still interests me and I enjoy discussing it. Discussing it doesn't trigger me in the least to want to go out and do it.
An interesting perspective I've read about online poker today is how the pool of fish will totally dry up at basically all poker gambling websites. Someone like Brian (iamthegreatcornholio), highly intelligent, could probably easily find ways around these laws. But let's take someone like Guy (boopotts), also highly intelligent, and Brian who believe that online poker is a game of skill that can be beat. A "normal" fish I doubt very much is going to do things such as opening a foreign bank account, or write checks/money orders to third party sources to get to the poker websites, or basically go out of their way to do something now "highly" illegal just to play some online poker which they lose money at anyway. Many will just quit or if they have developed too much of an itch for poker, perhaps will find private poker games or play in casinos. Potential new online poker players, new fish, aren't likely to bother trying to play either.
So the point is that with basically no fish anymore, you're going to basically have nothing but the the smarter, more skilled, intelligent players playing...trying to beat each other's brains in all the while the house cut (rake) is grinding down their bankrolls.
I never believed that anyone could beat the game of online poker, but I respect the premise of those here that with so many fish out there, that they could make money by winning at a higher percentage rate than the rake percentage. But I doubt very much if even a very skilled online poker player will now believe that he could possibly beat the rake playing against other very skilled players.
So I think that basically nobody in the United States is going to want to go through the hassles of playing online poker. Probably some will for a variety of reasons, addiction being one of them, but I have to believe that this legislation will cut online poker playing in the United States to possibly 5% or less of what it was, possibly less than 1%. >>
I couldn't agree more. If this law passes it will be a disaster for people who make a living playing online games, for all the reasons stevek outlines here.
There is no doubt in my mind that you will get paid from PartyPoker. They are probably just severely backed up right now with withdrawal requests.
I'm not sure about PartyPoker and what laws apply to them, but online gambling companies based in the UK (Great Britain) are required by law to keep player's money seperate from any other of the company's business money. That money in the player's account cannot be touched except by instructions from the player. To the best of my knowledge, these gambling companies in the UK are consistently audited to make sure they are in compliance. So by law, even if these gambling companies went out of business, the player's money is supposed to always be there to be withdrawn.
As for those gambling websites in say Caribbean countries, my opinion would be that you would probably get your money if they are reputable and have a reason to stay in business or are affiliated with a larger corporation that doesn't want their image tarnished. If it is a smaller gambling website company, a certain number of these were owned and operated by organized crime (this has been well documented in news articles) well you can probably kiss your money goodbye.
Frankly, I think what you may see is a "revival" of the mob operating online poker - they are already involved in this and will now push to be more involved. No internet money transfers would be necessary. Give "Bruno" $500 in cash and he'll clickon a $500 credit in chips for you at their gambling website. If you win and you want to withdraw your money, Bruno will pay you in cash. Just like a local illegal sports bookie, Bruno would most likely also extend you credit. And all the negative consequences of dealing with a mob figure will eventually come to haunt you when you can't pay back what you lost on credit.
I have no idea when, could be many years, but eventually I see the states individually somehow legalizing internet poker, with federal cooperation. It'll happen when there are too many stories about the mob harming or killing people over online poker gambling debts. There may never be total "interstate" poker, but they'll probably be "intrastate" poker meaning the citizens of say Pennsylvania could be allowed to gamble amongst themselves online, but not with those located in other states. Perhaps somehow a number of states would combine with each other to allow online gambling amongst themselves. This is no great prediction because there already are states combining with lotteries, and with internet horse racing programs - it is legal in some states and illegal in other states. So it'll probably eventually become a states rights type issue.
Oct 02 9:27 AM US/Eastern
US President George W. Bush this week is expected to sign a bill making it harder to place bets on the Internet, a practice which already is illegal in the United States.
Bush was expected to act quickly after Congress approved the Unlawful Internet Gambling Enforcement Act making it illegal for financial institutions and credit card companies to process payments to settle Internet bets. It also created stiff penalties for online wagers.
Billions of dollars are wagered online each year and the United States is considered the biggest market.
"It is extraordinary how many American families have been touched by large losses from Internet gambling," said US Representative Jim Leach, the bill's main sponsor in the House, in a statement after its passage early Saturday.
The bill's chief Senate sponsor was conservative Republican Jon Kyl, who, like Leach, has said he believed Internet gambling was a moral threat. He has called online betting as the Internet version of crack cocaine.
"Gambling can be highly addictive, especially when its done over an unregulated environment such as the Internet" he said this year.
"If Congress had not acted, gamblers would soon be able to place bets not just from home computers, but from their cell phones while they drive home from work or their Blackberries as they wait in line at the movies," Leach said.
The US Treasury Department and the Federal Reserve Board will jointly develop implementing rules for the new law, while financial institutions have nine months to incorporate its provision.
Leach cited research which showed that young people who tend to spend hours of leisure time on the Internet, are particularly vulnerable.
A 2005 survey by the University of Pennsylvania's Annenberg Public Policy Center found that 26 percent of male college students gamble in online card games at least once a month, while nearly 10 percent of all college students gambled online at some point last year.
"Never has it been so easy to lose so much money so quickly at such a young age. The casino is in effect brought to the home, office and college dorm.
"Children may play without verification, and betting with a credit card can undercut a players perception of the value of cash, which too easily leads to bankruptcy and crime," Leach said.
Experts said the vast majority of bettors are placing wagers on poker.
"Everyone loses if this industry continues its remarkable growth trends," Leach said.
Republicans tucked the measure into a bill aimed at enhancing port security, which passed early Saturday.
<< <i>I use firepay, which is a 3rd party off-shore holding company like paypal, for internet "casinos" and only use cash transactions. How is the government going to regulate that? >>
By not allowing your bank to take payments from it...
<< <i>RANDYMOSS, where did you see these statements about the on-line poker sites?
I have active accounts with both PokerStars and PartyPoker and have not received an email (which is their primary form of communication) about this. Additionally, I just went to both sites and neither have any type of disclaimer/notice/warning pop-up when you log onto their sites.
Edit: I found one news "source" which claims announcements will be made shortly
link >>
In the morning both companies issued statements on CNN worldwide and also their home sites... Partygaming etc... If you guys want visit twoplustwo.com and click the legislation tab, its insane whats going on. I hope these companies bring litigation on and tie this bill up, its stupid that this is even in a bill that has to do with our soliders. Bill frist is a joke and a hick, I can't wait to see him run for president and get smacked down by hate.
PartyPoker Home Page
Nothing on either of them. In fact, both are encouraging you to sign up
<< <i>
<< <i>I use firepay, which is a 3rd party off-shore holding company like paypal, for internet "casinos" and only use cash transactions. How is the government going to regulate that? >>
By not allowing your bank to take payments from it... >>
How so? It's a 3rd party holding company that has no affiliations with gambling sites. That would be like banning all PayPal transfers regardless of where the money came from.
http://forumserver.twoplustwo.com/showthreaded.php?Cat=0&Number=7509074&an=0&page=0&gonew=1#UNREAD
As far as the firepay issue, trust me the goverment can track it, if your willing to go be bubbas sex toy to gamble instead of going to vegas or card rooms, then by all means do so...
For those looking for announcements:
PokerStars <- via forum posting
And from PartyPoker:
2 October 2006
PartyGaming Plc
United States legislation
On 30 September 2006, the United States Congress passed The Safe Port Act. That measure also contained certain provisions known as the ‘Unlawful Internet Gambling Enforcement Act of 2006’ that will affect the processing of payments between US customers and online gaming companies, including PartyGaming, that are publicly traded and licensed and regulated in respected jurisdictions.
The Act is expected to be signed into law by President Bush within the next two weeks. If signed into law, it will immediately make unlawful the receipt by a gambling business of proceeds or monies in connection with unlawful internet gambling. The Act does not clarify the definition of unlawful gambling. However, as the first piece of Federal legislation dealing explicitly with internet gaming, it does make clear that the US government intends to stop the flow of funds from Americans to online gaming operators through criminal sanction. The Act also asserts that, under US law, a wager must be permitted under the laws both of the customer’s place of residence and that of the operator.
After taking extensive legal advice, the Board of PartyGaming Plc has concluded that the new legislation, if signed into law, will make it practically impossible to provide US residents with access to its real money poker and other real money gaming sites. As a result of this development, the Board of PartyGaming has determined that if the President signs the Act into law, the Company will suspend all real money gaming business with US residents, and such suspension will continue indefinitely, subject to clarification of the interpretation and enforcement of US law and the impact on financial institutions of this and other related legislation. Access to PartyGaming's online gaming sites for the Group's US free play customers will be unaffected. Access for all of PartyGaming’s non-US customers will also be unaffected.
The Group’s strategic focus remains on developing its existing markets outside of the US and on developing new markets and products. Should activities in the US be suspended, the Directors will also seek to re-align the Group's cost base to accommodate the changed business environment. However, any such suspension would also result in the Group’s financial performance falling significantly short of consensus forecasts for 2006 and 2007.
Mitch Garber, Chief Executive Officer of PartyGaming, said:
"This development is a significant setback for our company, our shareholders, our players and our industry. While US horse race betting, state lotteries, fantasy contests and certain other online gaming activities have been exclusively protected under the new law, we are disappointed that the popularity and skill of poker in particular have not also been specifically protected. The Board respects the laws of the US Government, and will continue to analyse their applicability, but also continues to believe that a regulatory framework for online gaming, including poker and casino gaming is the only sustainable long term solution.
"We have a substantial gaming business outside the US, one that is highly profitable and growing rapidly on one of the most technologically advanced platforms available. In the first half of 2006 our non-US business generated revenues of $150 million, a 151% increase over the comparable period in the previous year. Gaming on the internet is already a popular form of entertainment for millions of adults and we will continue to expand our business into new territories, offering fun, responsible and friendly competition in a safe and secure environment for customers around the world. PartyGaming is by far the largest online gaming company in terms of non-US business and liquidity and we intend to focus on and increase our advantage in that area."
A further update will be provided with the Q3 KPIs on 20 October 2006.
If anyone thinks that anything Calvin Ayre or the rest of the gambling website owners say or do at this point is going to matter, then you are only kidding yourself. The legislation will only be changed by a grass roots state rights type issue - not going to be easy when promoting gambling. It's going to take a very powerful pro-gambling politician like an Ed Rendell to get it started and pull it off. And it will only happen if it can be 100% certain...not 99%...100% certain that underage people could not possibly access any gambling website business licensed in the US.
Think I'm exaggerating? If any brick & mortar casino in the US was found to be constantly violating the law by letting in underage gamblers, they would be very heavily fined and it the problem persisted...they would be shut down.
From an article back in May:
www.onlinecasino.org/news...d-1278.php
Online Casino Gambling News
PartyGaming Founders Fold
Onlinecasino.org News 27.05.2006
Casino News Kenny Rogers once said, “you’ve got to know when to hold em and know when to fold em.” Two founders of the online poker and online casino giant - PartyGaming decided to fold recently, by resigning as board directors.
It's expected that they will sell off their stakes in online casino poker PartyGaming shortly. Both former board directors and founders were major shareholders in the successful company. Anurag Dikchit, one of the wealthiest Asians in Europe, currently holds a 31 percent stake in the online poker and online casino PartyGaming. Vikrant Bhargava currently owns about 8.5 percent share in the online casino and poker company.
Up until now, the two have been prevented from selling off their shares. However, that agreement is going to expire at the end of next month. Both parties are expected to sell of their holdings in PartyGaming. Anurag Dikchit stands to take in upwards of 1.6bn pounds from the sale if the price of PartyGaming stock stays around its current level of 131 1/4p. The agreement expiration will also free up a couple other parties and allow them to sell stock if they so desire.
The two other founders are Ruth Parasol and Russ DeLeon. Both founders each own about 16 percent of online casino and online poker PartyGaming. There's still wild speculation as to what each party will do. Bhargava is expected to sell off, because he was going to leave the company at year's end anyway. Dikchit is going to continue working on the technical side of the online casino and poker company. It's possible that he will simply trade a portion of his holdings in for cash.
And Dikchit?? What kind of name is Dikchit?
<< <i>I'm still pi$$ed.
And Dikchit?? What kind of name is Dikchit? >>
A funny one
I'm not kidding - I substituted a c for an s because it wouldn't post here otherwise because of a curse word. Yes, Dik$hit is his real name - I think he's from India.
Link to Article
I used to live in Arizona and I've always like Jon Kyl but F him now. Looks like the Indian Casino's out there got him in their pocket with campaign donations. Same with many other congressmen that voted for it. I've always voted Republican but I won't vote for anyone that supports this bill, including George Bush. Hell, I'd even bring back Slick Willy if it meant I could keep using Party Poker. I can't believe I just said that.
I just cashed out my Party Poker money yesterday, we'll see what happens. Looks like I need to get a home game going. I'm not giving up poker.
<< <i>I'm still pi$$ed.
And Dikchit?? What kind of name is Dikchit? >>
We may be related, as my mother used to call me something like that when I was younger
This whole bill is absurd, but what else would one expect from a government that continually keeps moving towards communism? I still have an impossible time understanding why our government passes a bill like this using the reasoning they have, but still allow many other forms of gambling such as the lottery, bingo, casinos, etc... Why can't they just be honest and say that they don't have a hand in the take and so they don't want to let people spend their own money how they would like? It's that simple.
Hopefully Bush and Cheney will take a day to talk this over while quail hunting...
Net gambling cashed out
To be banned in U.S.: Global companies take US$7-billion market beating
Peter Morton; with files from Paul Vieira, Financial Post
Published: Tuesday, October 03, 2006
WASHINGTON - A surprise move by Congress to ban online gambling in the United States caused a US$7-billion stock market meltdown yesterday, dragging down Canadian gambling software company CryptoLogic Inc.
The Toronto-based company saw nearly 20% of its share value wiped out in hours after Congress approved a bill that will end Internet gaming in the United States. It closed at $19.84 -- down $4.76.
As well, Excapsa Software Inc., a Toronto-based maker of software for gambling Web sites, saw its shares slide 66% to 15 pence in London. Chartwell Technology Inc. of Calgary, which makes gaming software systems, lost 15% of its value.
In Britain, where many Internet gambling companies trade, the top three companies announced they were pulling out of the United States completely after the government crackdown.
"This could break their necks," said Leopold Salcher, an analyst at Austria's investment firm RCB.
PartyGaming PLC, operator of leading Internet poker site PartyPoker.com, and competitors Sportingbet PLC and 888 PLC, said they had no choice but to leave the United States even though American gamblers are their largest source of revenue.
"This development is a significant setback for our company, our shareholders, our players and our industry," said Mitch Ganer, chief executive of PartyGaming. It will suspend betting for its 900,000 U.S. players.
Shares in PartyGaming fell 56% to 48.83p, shares in 888 sank 26% to 108.25p, while Sportingbet shares dropped 64% to 66p.
"The precise effect of the legislation is unclear," 888 Holdings said in a statement. "However, this legislation indicates Congressional intent to treat Internet gaming, whether sports-related or not, as illegal."
Stephen Lewis, chief financial officer at CryptoLogic, said it had been preparing for the day when the United States would move to ban online gambling. About 70% of its revenues come from outside America.
"The day started bright and sunny," he said about Congress approving the bill. "Then it got dark and stormy."
The move by Congress would cut CryptoLogic revenues this year by $30-million and earnings by $24-million, Mr. Lewis said. The company said last week it plans to move its head office to Ireland.
CryptoLogic, which sells online gambling software and support to licensees around the world, has been trying to reduce its U.S. exposure for the past four years, he said.
The House of Representatives and the Senate approved the bill to make it illegal for banks and credit-card companies to make payments to online gambling sites.
"There was an assumption tied into the price of these stocks that the legislation was not going to make it through," said Paul Leyland, an analyst at Arbuthnot Securities in London.
President George W. Bush is expected to sign the bill, part of broader security legislation, into law in the next two weeks. "We believe this will have a very material impact on the long-term prospects of online gambling, and in particular poker," said Julian Easthope, an analyst at UBS.
Online gaming -- largely based in Costa Rica and Antigua -- exploded in 2005 but has since run into legal problems, including the recent arrests in the U.S. of visiting senior U.K. executives on charges of illegal gambling in individual U.S. states.
While investors remained hopeful online betting and gaming would not be banned at a federal level, in an election year, Congress is anxious to look tough on illegal activity such as Internet gambling. "Internet gambling has been illegal since the inception of the Internet, but there has been no way to enforce it," said Rep. James Leach, an Iowa Republican.
By making it "illegal to use a financial instrument to settle an Internet wager," Congress is putting responsibility on the financial community, he said. The legislation orders the U.S. Federal Reserve and Department of Justice to issue regulations within nine months to banks establishing ways for blocking transactions.
"This move will certainly have a negative impact on the future growth potential for Internet gambling even if the current level of gambling doesn't decline a great deal," said Jason Azmier, an analyst at Calgary's Canada West Foundation who has researched Canadian gambling.
The American Gaming Association, which represents casino operators based in Las Vegas and elsewhere, had asked Congress to fund a commission to study whether online gambling can be regulated and taxed in the U.S.
John Tuzyk, a Toronto-based lawyer with Blake Cassels & Graydon, said yesterday there is no court decision that addresses whether Internet gaming offered to Canadian residents from offshore sites would offend Criminal Code provisions. Nevertheless, "the weight of authority would suggest that, as the 'recipients' of the activity are in Canada, there is a risk that the courts may find that offering Internet gaming to Canadian residents constitutes a criminal offence committed in Canada," Mr. Tuzyk said.
Under the Criminal Code, most activities related to gambling are illegal -- although there are exceptions, most notably provinces' right to operate lottery games and casinos, and horse racing.
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<< <i>The House of Representatives and the Senate approved the bill to make it illegal for banks and credit-card companies to make payments to online gambling sites. >>
Here's an idea, although probably a bad one.
When I first started I made my first deposit with a credit card, and when I won I had them send me a check. Weeks later I opened a checking account for this and have used that to transfer money ever since. Suppose a person always kept a positive balance. Could you not have winnings mailed in the form of a check? Or could you not open an offshore account??
(Keep in mind I have no intentions of going to jail over this, but wonder how people will beat the system)
Also, Party Poker is claiming they are pulling out of the U.S. Do they mean advertising, etc??
I mean, it's the internet, how will it not be possible to log on to their site? I don't understand computers very well so maybe someone can fill me in.
I still think this sucks. I'm waiting for guys who play a lot of online poker to chime in more with their opinions. I mean if you make a living at it, this is quite a blow.
Maybe we'll all just move to Canada, hang out with Knuckles.
shawn
<< <i>
<< <i>The House of Representatives and the Senate approved the bill to make it illegal for banks and credit-card companies to make payments to online gambling sites. >>
Here's an idea, although probably a bad one.
When I first started I made my first deposit with a credit card, and when I won I had them send me a check. Weeks later I opened a checking account for this and have used that to transfer money ever since. Suppose a person always kept a positive balance. Could you not have winnings mailed in the form of a check? Or could you not open an offshore account??
(Keep in mind I have no intentions of going to jail over this, but wonder how people will beat the system)
Also, Party Poker is claiming they are pulling out of the U.S. Do they mean advertising, etc??
I mean, it's the internet, how will it not be possible to log on to their site? I don't understand computers very well so maybe someone can fill me in.
I still think this sucks. I'm waiting for guys who play a lot of online poker to chime in more with their opinions. I mean if you make a living at it, this is quite a blow.
Maybe we'll all just move to Canada, hang out with Knuckles.
shawn >>
The following online poker rooms will no longer allow US players to play for real money.
Party Poker
All the Cryptologic rooms (Interpoker, Caribbean Sun, etc.)
Pacific Poker
The B2B Rooms (HeyPoker and so on).
And I'm sure others as well. These ones I know for sure. PokerStars hasn't made up its mind yet, but it looks like they are probably going to suspend US operations as well.
I agree this is a total nightmare. Now I've actually got to figure out what the f**k I'm going to do for the next couple years, since I've more or less built a life for myself out of playing online. Thanks Sen. Frist!
Did I miss a memo, or aren't the Republicans supposed to be the party that advocates a small AND UNOBTRUSIVE federal government?
Edit to say that Paradise Poker apparently WILL still continue to take US players for the foreseeable future.
Yeah, but they probably figure it will improve their popularity with the older, religious right crowd while the majority of citizens they've angered with this bill most likely will not vote. (I'm assuming that online poker is mostly guys in their twenties and early-thirties. If I'm wrong, then disregard what I just said).
I just cleaned out my AP poker account minus 300 bucks which i put on one hand of BJ, doubled up and tried again, not so much, thrill was there though.
Lots of noise in the news about online gambling this past weekend, but don’t believe the hype. It’s business as usual at Sportsbook.com.
You can still deposit via your credit card, Neteller, Firepay or E-check, you have fast access to your winnings (and now even in cash - see below), your transactions are always safe, secure and private 24/7, and, of course, you get better odds than anywhere else.
The real news this weekend, aside from Saturday’s clashes between Texas and Oklahoma and LSU vs. Florida, is that T.O. is almost certain to play Sunday back “home” in Philly. The Cowboys/Eagles games have always been colorful so this should be an ugly Sunday. Philly’s getting all the action so far—as is the under—it’s going to be a tight game.
And when you’re cashing in your V-chips, select the Debit1 option. Instead of a check, we’ll send you a cool ATM card you can use for cash at the supermarket, gas station, liquor store—anywhere you can pay with an ATM card. Now that’s news you can use. And your next withdrawal is even faster as we just credit your account online and the cash is there for you. No checks, no FedEx or DHL, no waiting—choose the Debit1 option on your next withdrawal.
Have another great winning weekend.
Regards,
The Sportsbook.com Team
the $470 withdrawal I made on Monday has been credited to my checking account.
All if well, at least for a couple more weeks.
I have a feeling it'll take longer before banks and credit cards begin denying transfers, I have no idea how long it will be before Party Poker starts suspending U.S. accounts like they said they would.
I'm still pi$$ed.
shawn
<< <i>Got this message from sportsbook.com today....
Lots of noise in the news about online gambling this past weekend, but don’t believe the hype. It’s business as usual at Sportsbook.com.
You can still deposit via your credit card, Neteller, Firepay or E-check, you have fast access to your winnings (and now even in cash - see below), your transactions are always safe, secure and private 24/7, and, of course, you get better odds than anywhere else.
The real news this weekend, aside from Saturday’s clashes between Texas and Oklahoma and LSU vs. Florida, is that T.O. is almost certain to play Sunday back “home” in Philly. The Cowboys/Eagles games have always been colorful so this should be an ugly Sunday. Philly’s getting all the action so far—as is the under—it’s going to be a tight game.
And when you’re cashing in your V-chips, select the Debit1 option. Instead of a check, we’ll send you a cool ATM card you can use for cash at the supermarket, gas station, liquor store—anywhere you can pay with an ATM card. Now that’s news you can use. And your next withdrawal is even faster as we just credit your account online and the cash is there for you. No checks, no FedEx or DHL, no waiting—choose the Debit1 option on your next withdrawal.
Have another great winning weekend.
Regards,
The Sportsbook.com Team >>
ATM's are operated by the banks aren't they? So how is an ATM going to now work for a gambling website? Simply isn't going to happen. Of course to the best of my knowledge the legislation doesn't "officially" take effect for about nine months, so I guess possibly this ATM card will work until then.
These gambling stocks and gambling transaction stocks, didn't lose about half their value in one day because it's going to be "easy" to get around these laws. That just doesn't make sense.
Frankly, these gambling websites have no risk as far as your money is concerned. If your money gets deposited, that's fine with them. If for some reason in the future you can't withdraw the money, why should they care?
But I'm just looking for the facts on this whole situation. Please correct me if I'm wrong.
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I personally have no need for an online betting service, I have an account with them to follow lines as soon as they move... I always thought the only bettors who really used those services were the ones who wanted to drain their cash with 5 and 10 dollar 9 team parlays that a local guy would get annoyed with...
I also thought it was funny that they would suggest I use my gambling winnings at the liquor store - what about the track?
My 2 cents - I'll be amazed if the multi-billion dollar online poker gaming industry doesnt find a way for US customer to safely deposit $$$... Guess we'll see in about 2 weeks and 9 months...