Online poker

[Ely Lake Expert]

I figured this would be the best place to post this, since none of the other forums are very applicable on this subject.

If you have not heard a bill was passed last weekend making it illegal for banks, credit cards, and money transfer companies to transfer money from a US resident to and off shore gaming site. (for those who don't know all online pokersites are based offshore) Though it doesn't shut down the ability to go to the site, it did shut down the ability to transfer money to the site effectively shuting down the ability for new players to play and players that have been playing to add money to their accounts. Which effectively shuts down online poker here in the USA. The worst part of it is how they passed the law. The original attempt was voted against, so this time senator Bill Frist added it onto the end of a port security bill that they already knew would pass overwhelmingly. What a bunch of talk, what does a port security have to do with online poker. I am an online regular and am really dissapointed that this happened. Their is an estimated 70 million poker players in the US. Also the US makes up for 80% of the people who play online poker. I think their is a huge misperception that it is a luck of the draw game instead of a skill game with a little luck needed that it is. The game of poker truly uses mathematical skills, the ability to read people, and money management skills. From what I read it will take another 9 months or so before this is and actual law. Personally I will continue to play online poker for now and once this becomes a law I will still look at my options to continue playing. What I really don't understand is everyother major country in the world is accecpting online poker and they are looking for ways to regulate it and tax it, why can't we accomplish that? I read that if it was taxed in the US, the US government would make 3.3 billion dollars a year and that number is growing. Personally I joined a online group called the poker players alliance, which has 75,000+ members and is the biggest supporter of legal poker in the united states. I guess my honest opinion is, US adults work for the money they have and I don't see why a bunch of clueless on the subject politicians have the right to take away the ablility to play poker from our homes. I would like to hear input from some FMer's whether you are a poker player or not, I am curious to hear what you think.

End of rant,

Ryan

[klw]

I totally agree with all of the points that you stated. I too am an online player and this is how I will be funding all of my hunting expenses this fall (had a string of wins lately). My question to you is do you think that it would be a good idea to keep the balance in my poker account to a minimum? Will this bill affect my ability to collect my winnings?

[waskawood]

My guess is that there is a giant loop hole lurking out there just waiting to be found. How about a some of these pay sites where you can transfer from a credit card to them and then to a gaming site. I don't think it will last long but that is just my opinion and have have been wrong once before.

[Ely Lake Expert]

KLW,

From what I have read the bill prohibits money transfers to the sites and really doesn't say anything about the withdrawal of money. So I think that withdrawing money shouldn't be an issue, but I don't know forsure so I would keep your eyes and ears open to further news on the subject. It doesn't officially become a law until the president signs it, which I read takes up to 9 months so you don't have anything to worry about until that point in time. Even once it does, I am curious to see how it will and how well it will be enforced.

[Ely Lake Expert]

Waskawood,

These money transfer sites you are talking about, if they are based in the US. They are subject to the same regulation, but not if they are based overseas they are not. I think I see Europe's next big industry coming.

[foulpole18]

I also play a lot of poker with a little sportsbetting. This bill is talk. There will be loopholes because our government isnt going to commit that much time to enforcement anyway. It just makes the gov't feel like they are protect the people of the US from themselves. Anyway just go and open a netteller account and transfer money through that. I'm so sick of the gov't being the morality police. If I want to gamble every dime I have away, that my business.

[DTro]

Just my opinion, but the ease of all this online stuff contributes greatly to someone "losing" it all. While I don't think it should be banned, I think there should be some sort of limits.

As fas as saying it's a "skill" game. I think a lot of people are kidding themselves. Yes, it does take skill to play with good players, but as soon as the top level is reached, luck is all you have.

I just cringe when I sit down at the table and see it full of 18-21 yr olds playing with their rent money.

I'm really hoping the "hold em" phase dies down, but I don't think it will.

I also think that the glamourization of the big tournies is a bad thing IMO.

I play just as much as anyone else, but I know when to stop. I know for a fact there are others that don't.

Also, I would much rather sit at a live table vs the online thing. It helps that Canterbury is only a short drive.

However, having said that, you'll find me quite a bit on my 360 playing poker on LIVE.

[gunflint]

If the government could figure out how to get a percentage of the rake, this would be a non-issue

[Ely Lake Expert]

Quote:

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As fas as saying it's a "skill" game. I think a lot of people are kidding themselves. Yes, it does take skill to play with good players, but as soon as the top level is reached, luck is all you have.

---

Dtro,

I guess I am a little bit confused by what you mean about "when the top level is reached, luck is all you have"

Maybe I am reading it wrong, could you please explain a little bit further. I consider myself a skilled player and I do agree that luck is involved, but looking long term it is a skill game.

As to young kids playing with their rent money I do agree that it is a very bad thing and I have seen alot of it.

Also kinda off subject, have you ever played those sit and go's they run on mondays and thursdays at canterbury? I was there last thursday, those are my favorite things they have.

Ryan

[DTro]

What I'm saying is that top level players that get the cards are pretty hard to beat. In other words in a table full of top players it's usually the person who gets the cards that wins.

I'm not saying that it doesn't takes skill, but I think the average poker player overestimates the amount of skill it takes.

Anyways, yeah I like those sit n go tourneys and I was also out there on Thursday. A lot of fun, but you can lose a bunch really quick In fact I ran into a guy who I recognized playing with at Fortune Bay and spoke with him for a while.....that wasn't you was it? I though his name was Jeremy or something like that.

[Ely Lake Expert]

LMAO , that was me. You look alot different in person when you are not holding a giant catfish. I actually knocked you out of that one you played . I ended up playing 8 sit and goes that night(5 $100's and 3 $55 buyins). I won 3 and got a third in the $100 buyins. I also took second in one of the $55 dollar buyins. So I ended up having a real positive night. I will be down there a week from this thursday again, you should come stop by.

By the way, my name is Ryan

[ozzie]

They have to find a way to regulate those sites!! It is just to easy for the site to sit 6 out 8 players into the game to rake the cash in there favor. I hate those sites. Fun if you want to play a small tourny and sit and play for 5 hrs for fun but the more money the worse the beats get and i guarentee it isn't you against one person, it is you against the site, a cheat program, or people interacting with each other increasing their odds. I have seen alot of computer poker and it is amuzing on the ways they will take your money!!!! they are fun but unless you win and leave they will get your money in the end...........

[Ely Lake Expert]

Ozzie,

I have to politely disagree with you. If you are a solid consistant player you can make money playing online. I sure have. I don't believe any of the major sites have any "cheat" progam. A couple of friends might do it, but even that is tough because most sites only allow 1 computer per IP address. The reason it seems like there are so many bad beats is because there are alot of bad players that make alot of bad plays and bad beats do happen. Also, they deal out 60 to 75 hands per hour which is 2-3 times as many as any live game. That is why it seems bad sometimes.

[ozzie]

There is no doubt you can make money but the more you play and the bigger money you play you see alot more "fishy" hands. there are cheat systems available but they are time consuming to use. All you need to cheat is just get a few freinds at the same table and use a telephone to tell each other what you have or what you folded and you increase your odds alot!!!!!! Sit 3-5 friends at a single table and rake in the others cash.........It isn't fool proof but give me 2-3 other peoples hands that they folded and it will give me the edge. Good Luck.......

[Sandmannd]

This sounds like another case of the government saving people from themselves. If you can afford to gamble do it, if you can't don't do it. Maybe if you spend all your rent you will learn your lesson and stop gambling. People need to start having accountability for their actions, I'm pretty tired of people putting the blame on everyone but themselves. OK, enough of the rant from me.

[Bigbartguy]

I have to agree w/ the majority on this one - the govt needs to focus on bigger things (Bin Laden, Corporate tax loopholes, CRIME) rather than how tax-paying Americans spend their cash and leisure time.

The ONLY reason this is happening is because the govt realizes that they are not getting a piece of the action. I'm not a huge online poker player, but I throw $50 at it every couple of mos and spend the next couple of mos playing it down.

I agree w/ others that if this passes - there will be some Neteller type of way to still transfer money, without govt intervention.

Any elected official who signed this, will NOT be getting my vote. My 2 cents

[nytelyter]

what about useing paypal?

[Ely Lake Expert]

I am yet to see a site that accepts paypal as a payment option.

[DTro]

Quote:

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LMAO

, that was me. You look alot different in person when you are not holding a giant catfish. I actually knocked you out of that one you played

. I ended up playing 8 sit and goes that night(5 $100's and 3 $55 buyins). I won 3 and got a third in the $100 buyins. I also took second in one of the $55 dollar buyins. So I ended up having a real positive night. I will be down there a week from this thursday again, you should come stop by.

By the way, my name is Ryan

---

That's hilarious, I figured the odds were pretty low that it was you

You did really good. That's pretty good proof that there's some skill involved. 50% money!

I might have to stop by there tomorrow and return your favor

I think I'll be up at "The Bay" the weekend of the 19th.

Do you drive all the way down here just to play the tournies?

[Ely Lake Expert]

dtro,

I won't be down there today. I was actually down there last week for continuing education classes for work. I will be down there next week from the 10th-15th for more classes. I can't resist hitting up canterbury when I am so close. Otherwise, I am not there real often. I try to stay out of the big city if I don't have to be there. I have never driven there just to play a tourney, though I think I might drive down to play a couple of events in the fall classic. BTW, it was a 62.5% in the money

Maybe I will see ya next week,

Ryan

[DTro]

whoops, missed that third in the $100.....that's awesome.

Yeah, it's such a nice day down here, and I'm hoping the river eyes are hungry. Can't let a day/evening like this go by sitting at a poker table.

[yaggie]

Be carefull! Some old buddies of mine decided to try to beat the system and we were on the same table on line( five of us) and we were telling each other our cards on each hand. We didn't fleece the other players a lot but could of.

[Ely Lake Expert]

Here is something I found that makes me and probably a few others happy.

Legal Landscape of Online Gaming Has Not Changed

Analysis From CardPlayer's Legal Counsel

Misleading news stories abound both online and in print regarding the passage of the Unlawful Internet Gambling Enforcement Act. The completely incorrect interpretation states that the new bill essentially outlaws most forms of Internet gambling. The new bill absolutely does no such thing.

I have been analyzing legal issues for 25 years. I have gone to court thousands of times interpreting statutes and I have taught new lawyers the correct method by which a statute should be analyzed. For over 15 years I was part of a legal hotline where California attorneys would call me with a legal question. As this is my field of expertise, I am flabbergasted at the misinformation being perpetuated regarding the new bill.

The New Bill Does Not Make Online Poker Illegal

The new bill attempts to make it more difficult to get money into a site by forbidding US financial Institutions from funding the type of online gambling that the law has previously made illegal. The new bill does not make online gaming illegal where it was not illegal before. Let me say that again. The new bill does not make online gaming illegal. The bill merely speaks to the mechanism by which an online account is funded. I am going to spend some time in this article explaining the accuracy of my reasoning.

The Bill Constitutes Enforcement Legislation

First and most simplistically, the bill is called the Unlawful Internet Gambling Enforcement Act. The operative word is enforcement. It is a bill whose goal is to enforce laws that already exist.

The bill begins in section 5361 by discussing congressional findings. In that section the bill states that Internet gambling is funded by credit cards, etc. Section 5361(a)(4) states in relevant part:

“New mechanisms for enforcing gambling laws on the Internet are necessary because traditional … mechanisms are often inadequate…”

The Bill Does Not Change Existing Gaming Law

Next, section 5361( specifically states that nothing in this new law shall be construed as “altering, limiting, or expanding any Federal or State law… prohibiting, permitting or regulating gambling within the US.” In other words, the language of the statute confirms that this new law does not change existing gaming law. It does not speak to the legality of online gaming. It only applies to the mechanism of funding any Internet gaming that has already been deemed to be illegal.

Even Senator Frist said about the bill, “Although we can't monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws.”

The Definition of Unlawful Internet Gambling

Of extreme importance in a statute is the definitional section that sets forth the parameters of a bill. The term “Unlawful Internet gambling” is given a definition. Section 5362(6) defines unlawful Internet gambling to mean placing or receiving a bet “where such bet or wager is unlawful under any applicable Federal or State law.” This raises the question regarding what type of online gambling is already illegal. That will be discussed below.

First, let’s move on to the meat of the bill. This is the section that states just what is prohibited. Section 5363 begins by saying that “No person engaged in the business of betting or wagering may knowingly accept…” electronic transfers, credit cards, etc. where a person is engaged in “unlawful Internet gambling.” This new law applies, if and only if, the gambling is already illegal under current law.

This brings us directly to the issue of what has been deemed illegal in the last 10 years since the first online casino opened its virtual doors. In a nutshell, sports betting is made illegal by the 1961 Wire Act, but poker is not.

Remember please, that the Attorney General’s office has not brought one lawsuit in 10 years against a poker site, even though it takes the position that online poker is prohibited by the Wire Act.

How the Law Works

In order to explain this discrepancy, I must digress with some rudimentary background about just how the law works. You probably remember from your high school civics class that the legislature makes laws that the judiciary construes. That means that our representatives in Congress draft the laws that judges then interpret.

Legislators are not wordsmiths, which is why there is a whole body of law called statutory construction. The first rule of statutory construction says that if the words of the statute are clear, the court may rely upon the common language. But if the language is not clear, the court must construe the language using a complicated legal process.

If a law is unclear, a depuy attorney general (the prosecutor) will take one position and often a defense attorney will take an opposing position. They go to court and a judge makes a determination. So when the Attorney General makes a public statement about what a law means, he might or might not be correct. It is ultimately the decision of a court.

When the Attorney General’s office takes the position that the Wire Act prohibits online poker, the court ultimately decided whether that opinion is accurate. Senator Frist incorrectly believes that all online gaming is illegal. He said: “or me as majority leader, the bottom line is simple: Internet gambling is illegal.”

However, in order for Internet poker to be illegal, there must be a specific statute that forbids such activity. For years I have posed the question: What statute prohibits online poker? And if it is illegal, why has there not been one lawsuit filed by the government against an owner of an online poker site?

Online Poker Is Not Illegal

Even though the Attorney General’s office has publicly taken the position that the 1961 Wire Act forbids online poker, in 10 years they have not put their money where their mouth is. Why? The judiciary (that is, the interpreting body) has already held that the 1961 Wire Act doesn’t speak to poker. It only applies to sports betting.

The case in point to which I refer is “In Re Mastercard International,” decided by District Court Judge Stanwood R. Duvall, Jr. in 2001. Among other issues, Judge Duval was faced with the question of whether the Wire Act applied to online gambling. The posture of the case was interesting because many deadbeat gamblers attempted to avoid online gambling debts they had incurred by alleging that the money they owed their credit card companies amounted to illegal gambling debts in violation of the Wire Act. As a matter of fact, there were so many similar suits filed by so many gamblers who did not want to pay their losses that the lower court consolidated 33 such similar charges.

Judge Duvall ruled that the Wire Act only prohibited wagering on sports events and he dismissed all 33 cases, noting that “Comparing the face of the Wire Act and the history surrounding its enactment with the recently proposed legislation, it becomes more certain that the Wire Act's prohibition of gambling activities is restricted to the types of events enumerated in the statute, sporting events or contests.” In other words, online poker was not within the reach of the Wire Act’s prohibition. The District Court of Appeal agreed with Duvall’s ruling that the 1961 Wire Act does not apply to online poker.

I must mention one caveat. District courts are permitted to disagree with one another until the Supreme Court steps in. However, in this case Judge Duvall’s reasoning is so sound that it is close to irrefutable. There is a well established body of law regarding statutory construction and Judge Duvall followed the procedure to a tee.

Even Representative Goodlatte, who authored one of the online gaming bills in the House, acknowledges the limitations of the Wire Act. “We need to modernize the Wire Act, which is 45 years old, and does not apply to all forms of gambling,” says Goodlatte, adding, “It clearly applies to sports betting.”

Hysteria Is Completely Unfounded

Since this new law does not change what is legal or illegal, the current hysteria is completely unfounded. This legislation attempts to make it more difficult to get money into a site. Besides a few wrinkles that will be the topic of another article, that’s about it.

The statute is primarily no big deal since poker players stopped using credit cards a few years ago and found other ways to get their money into their favorite gaming sites.

I am not saying there won’t be lawsuits construing the meaning of the statute, but ultimately, the statute will only be deemed to affect the method by which online sites are funded.

Correct Analysis

There are a few very insightful people out there correctly analyzing this new legislation. For example, the president of the American Gaming Association, Frank Fahrenkopf is one such person. “This bill did not make anything legal or illegal,” says Fahrenkopf. “What it did was affect the mechanism by which Internet gambling takes place…and there is some question as to whether or not that will be effective.”

Bloomberg correctly reports that “Congress passed legislation that curbs financial payments from banks to offshore Internet casinos that are illegal under US law.”

Consumer Affairs seems to have gotten it right as they report that “The legislation does not criminalize the placing of bets by consumers. Rather than outlawing online gambling, the bill prohibits banks and credit card companies from making payments to online gaming websites… However, it's unclear just what is covered by the bill. Internet sports betting is plainly outlawed but what about online poker and other popular games?”

I urge our readers to use care in accepting the opinions that one site gets from another site where no legal opinion is being presented. Please, read the statute yourselves. Read the words carefully and think about my analysis. The statute can be found by clicking here. The Unlawful Internet Gambling Enforcement section starts on page 213.

Jurisdiction

Another area I have written about extensively is the area of jurisdiction. Libraries of books have been written on the varied and complex meaning of jurisdiction. One of the simplest meanings of “jurisdiction” is legal power.

For example, a New York court doesn’t generally have jurisdiction (legal power) over a problem in Texas. A federal court doesn’t have jurisdiction over a violation of most state laws. A municipal judge doesn’t have jurisdiction over a felony trial.

Our government doesn’t have jurisdiction to make rules for a company that resides offshore. Our rules do not apply in other countries, as they have their own sets of rules.

This bill prohibits a gaming company from accepting payment that violates US gaming law. Besides the fact that no law makes online poker illegal, all the gaming sites are offshore and not subject to US laws.

A law that tries to control an offshore company is considered a law with no teeth, because it cannot be enforced. In the US, when a law is broken, a person is arrested. The government subpoenas records and a case moves forward. What it means not to have jurisdiction is that US laws do not apply offshore, nor can the US arrest a person in another country nor does our government have subpoena power to command an offshore company to turn over records. NETeller, an online money transfer service, is also an offshore company, not subject to US laws.

The Future

First of all, nothing is going to happen for 270 days. The Secretary and the Board of Governors of the Federal Reserve System have 270 days (after the bill is signed by the president) to come up with enforcement policies and procedures. Those procedures are directed to the behavior of banks and credit card companies. The procedures will be a nightmare.

Representatives of the financial services industry worry about a heavy regulatory burden being placed on banks. “The bill sets up banks to police a social issue,” said Laura Fisher, spokeswoman for the American Bankers Association. “It's not something we want to encourage.”

The bill passed by Congress could allow regulators to exempt checks and money transfers because they are more difficult to track. “Analyzing 40 billion checks a year would be a largely manual process,” Fisher said.

If checks are not exempt, this would break our banks as it would be too costly to enforce. If checks are exempt, players could simply send a check to an online site. If checks are not within the purview of the law, what about e-checks?

The rules won’t even be figured out for nine months during which time, all the clever sites will have legally circumvented this new law by other legal procedures to fund the sites.

Some Online Sites Are Overreacting

I am surprised to see some online sites overreacting and posturing as if they will pull out of the market. Any company that just pulls out of the market deserves to lose a lot of money because it is receiving bad legal advice.

Offshore companies are not bound by US antigaming laws. But the most persuasive reason why offshore companies shouldn’t pull out is because the laws of online gaming have not changed. A few years ago when the government was beginning to subpoena news networks, offshore sites didn’t pull out because the movement by the government couldn’t affect them. Similarly, a law that directs itself to the mechanism used to enforce current laws, does not change the legal landscape.

I found this on a good HSOforum for poker players.

Ryan

[Ely Lake Expert]

Dtro,

I will be at canterbury again thursday night if you are around. I think I will bring my fishing rod with me and if you have time maybe you could teach or at least explain to me how to do some real catfishing.

[DTro]

Looks like I should be able to make it over there. I look you up.