DOJ Seizes Online Poker Sites

seedload · Post by **seedload** » Thu Apr 21, 2011 7:49 pm

Giorgio wrote:
seedload wrote:
Giorgio wrote:@seedload
Not true.
In most of Europe if you want to operate an online poker website you need to get licence from each state where you intend to operate.

In Italy as example it costs about 400.000 Euro (a little bit more than half a million USD).

Post police regularly issues blacklists of IP addresses of websites that operate poker or bet websites in Italian language and do not have an Italian licence. By law Internet providers are obliged to enforce these blacklists.

It's the same all over Europe, except maybe a couple of states.
As it has been said, is all a matter of money.
I am not clear why you start by saying "not true" and then explain how it is perfectly legal to operate an online site in Italy and all over Europe.

The point is that you can't buy a license in the United States.

For the US, I support regulated online poker, with tax revenue generated that goes to the government and protections in place that guard against underage play and regulate site security. Yes, licensing would be required.
Probably i was not clear enough.
When I say that you need to buy I licence it means that you actually need to incorporate a company in Italy that has to handle all bets from the players, as the licence cannot be sold to non resident companies.
So the Italian company has to pay the 400K euro in advance and than they must handle all the transactions of the Italian gamblers.
On the gamblers transactions there is a percentage of fixed taxation (that is not depending on company profit or loss) plus standard tax on profit.

Some website calculated that around 70% of the money spent online by gambling in Italy ends up into the government coffins.
The same should be in the USA as far as i know.

No, I think you are being pretty clear. You are saying it is expensive to operate a site in Italy and that the government makes a lot of money on any site that operates in Italy. Got it.

France has similar restrictions and also restricts foreign players from playing - only French people can play against French people online. Pokerstars actually has a separate domain for France - and for Italy I think.

I guess it is me that is being unclear. You can legally operate a poker site in Italy - but it is costly. You cannot legally operate a poker site in the United States - AT ALL.

Giorgio · Post by **Giorgio** » Thu Apr 21, 2011 7:50 pm

seedload wrote:If they were worried about their share of the pie, then they would legalize it domestically and tax it, which is very easy. They aren't worried about getting a share of the pie. They don't think anyone should have pie.

For what I knew it is legal also in USA if the company offering the service is incorporated in USA and transaction are within USA.
I actually think that Italy took our legislation directly from the American one.

seedload · Post by **seedload** » Thu Apr 21, 2011 8:05 pm

Giorgio wrote:
seedload wrote:If they were worried about their share of the pie, then they would legalize it domestically and tax it, which is very easy. They aren't worried about getting a share of the pie. They don't think anyone should have pie.
For what I knew it is legal also in USA if the company offering the service is incorporated in USA and transaction are within USA.
I actually think that Italy took our legislation directly from the American one.

No, you can't operate in the US. The sites were initially intentionally formed offshore because they can't operate in the USA due to long existing domestic anti-gambling laws.

Giorgio · Post by **Giorgio** » Thu Apr 21, 2011 8:10 pm

I see.
This is actually news for me. I was convinced that it was legal to operate in the US.
Strange rule thought, considering that there are full cities dedicated to gambling.

seedload · Post by **seedload** » Thu Apr 21, 2011 8:29 pm

Giorgio wrote:I see.
This is actually news for me. I was convinced that it was legal to operate in the US.
Strange rule thought, considering that there are full cities dedicated to gambling.

Each state has it's own rules. Many states have legal "brick and mortar" casinos of various kinds. But the federal government regulates interstate rules and it is illegal to take bets from other states federally.

Some states are moving to legalize intra-state online gambling between the residents of the same state and not across state borders. They can do this with out needing the Federal government to approve. My state, New Jersey passed this through its congress, but it was vetoed by the Govenor.

The only place that it is legal to have a poker website in the US is in the District of Columbia (Washington DC) which is kinda its own state. This was recently made legal only between residents of DC, but no sites are up yet.

I know, the US is confusing.

krenshala · Post by **krenshala** » Thu Apr 21, 2011 10:41 pm

A number of the Native American reservations have casinos because technically they are not part of the US states they are inside the borders of, so they can have a casino if the tribal leaders want to, even if the surrounding state laws prohibit it. A friend of mine is part of a tribe in Connecticut that did this, which is how I learned of it.

seedload · Post by **seedload** » Mon Apr 25, 2011 3:36 pm

Skipjack wrote:I hate that with every fibre of my being and I cant have respect for the people that make money of that.

No doubt you hate 'em, maybe for the reasons you express above and maybe for the reasons you have expressed before. One can only speculate.

Skipjack · Post by **Skipjack** » Mon Apr 25, 2011 4:42 pm

What would the "reasons I expressed before" be?
Confused.

ladajo · Post by **ladajo** » Mon Apr 25, 2011 4:57 pm

krenshala wrote:A number of the Native American reservations have casinos because technically they are not part of the US states they are inside the borders of, so they can have a casino if the tribal leaders want to, even if the surrounding state laws prohibit it. A friend of mine is part of a tribe in Connecticut that did this, which is how I learned of it.

But, for example, Foxwoods pays taxes on the earnings.
And, as I understand, all Indian Casinos pay federal tax.

They would not be in the same category as the online guys in this regard.

The other dilemma for which Indian reservations face, but a seperate discussion, is the question, "what makes you a tribe member?" Is it a function of any blood, or specific percentage threshold. I know for example that Foxwoods regards tribal membership as ANY demonstrable blood.

seedload · Post by **seedload** » Mon Apr 25, 2011 6:09 pm

ladajo wrote:But, for example, Foxwoods pays taxes on the earnings.
And, as I understand, all Indian Casinos pay federal tax.

They would not be in the same category as the online guys in this regard.

The other dilemma for which Indian reservations face, but a seperate discussion, is the question, "what makes you a tribe member?" Is it a function of any blood, or specific percentage threshold. I know for example that Foxwoods regards tribal membership as ANY demonstrable blood.

I am pretty sure I can prove one Cherokee ancestor, making me a member of the Cherokee nation (only need one), but, unlike other nations, the Cherokee Nation does not distribute gaming revenues to its citizens. Rather, these funds go directly to community stuff like schools/etc. Good for them! Uh ... I me us.

ladajo · Post by **ladajo** » Mon Apr 25, 2011 8:03 pm

This becomes an issue when you talk health care funding, educational benefits, scholarships, right to reside on the reservation, etc, blah blah.

If a tribe says ANY blood, eventually all of america becomes a member.

If a tribe says percentage requirement, eventually they run out of members, or go crazy from inbreeding, and broke from lawsuits. Think of being a tribe member, and then being told your children are not, because you married someone lacking sufficient percentage to keep your offspring above the threshold...

Eventually, the whole reservation thing is doomed, it is only a matter of time, one way or the other.

krenshala · Post by **krenshala** » Mon Apr 25, 2011 11:44 pm

My understanding it is varies by tribe. My friends tribe has, IIRC, a 50% requirement with some other modifiers, so I'm not sure if his children are counted or not, but I think they are despite being only 25%.

I agree that eventually it is doomed, I'm just not sure what the outcome would be.

And I didn't think about the Fed taxes part of it. You are correct, ladajo, the reservation casinos do pay those which does put them in a different category.

IntLibber · Post by **IntLibber** » Tue Apr 26, 2011 2:39 am

It's illegal to gamble online with any game. This isn't about drugs, its the casino protection act, thats all, the congressional reps from Nevada and New Jersey are big on this, as are lobbyists for the indian reservations.

As for government gambling, keep in mind that government requires private casinos operate games with an average 95% return on risk, so the casino has to pay all their other operating costs off the 5% house cut. But government can operate lotteries without any return on risk limits, so your typical six number megabucks lottery has about a 15% return on risk, sometimes as low as 5% with games like Megamillions, unless of course the jackpot has accumulated after several weeks, you can occasionally play these games with a return on risk greater than 100% when the jackpot is in the hundreds of millions of dollars.

But yeah, this is about protectionism, plain and simple. I am not sure if gaming is covered under WTO...

KitemanSA · Post by **KitemanSA** » Tue Apr 26, 2011 1:24 pm

IntLibber wrote:It's illegal to gamble online with any game.

Please show me the law that makes your satement true.

seedload · Post by **seedload** » Tue Apr 26, 2011 1:55 pm

KitemanSA wrote:
IntLibber wrote:It's illegal to gamble online with any game.
Please show me the law that makes your satement true.

There are no Federal laws that make it illegal to gamble online. The DOJ claims that the Wire Act does but that is heavily contested and I think that the Fed would not be able to show that it does.

There are state laws that explicitly make online wagering illegal. For example, in Washington State it is a felony charge to bet online. Both Tilt and Stars backed out of Washington State last year. Meanwhile New York has mis demeanor laws that may apply.

The UIGEA is an enforcement act. It doesn't really make anything illegal in and of itself. Rather, it says that transferring of money to illegal online gaming sites is an enforceable offence. You need to prove that something is going on illegally first. So, there needs to be an underlying illegal gambling act before the UIGEA has any power.

Part of the DOJ's case against Stars and Tilt revolves around the mis demeanor New York laws making taking online bets from players in New York illegal. From that they can enforce the UIGEA to get the banks and they can show that the online sites defrauded the banks by lying about who they were to take New York mis demeanor bets. The money laundering follows.

So, basically, the DOJ is trying to behold an offshore company to New York mis demeanor offences and then levitate those offences to more serious charges based on other laws including the UIGEA and banking laws.

This should be interesting.

As to motives, the DOJ is supposed to operate independently of political interests. In the past, the DOJ has been shown to go after big money type operations where they see they can get a lot of fine money. Specifically, they grabbed 600 million from Party Poker when the UIGEA went into effect without any charge or plea being placed. They grabbed a ton of loot from Net Teller for processing online gambling related moneys. In these allegations they seem to be going after about 3 billion dollars. That is the motivation in my mind.

Question is why all the theatrics? Just legalize, regulate and tax online poker and bring the sites back onshore to keep the profits in the US - like almost every other country is already doing.