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USA "Safe Port" Online Gaming Ban
President Bush's October 13th, 2006 signing of the Safe Accountability for Every Port Act of 2006 (SAFE) makes that measure's controversial amendment prohibiting money transfers between U.S. citizens, financial institutions and online gaming entities the dominant law regulating Americans' ability to engage in online wagering.
Stripped of all its legal boilerplate and provisions relating to wired gaming transactions involving intrastate Nevada casinos, Indian casinos and racetracks, the Amendment -- the Unlawful Internet Gambling Enforcement Act of 2006 -- makes it illegal for persons "engaged in the business of betting or wagering" to "knowingly
accept" money transfers from anyone participating in "unlawful" Internet gambling - which it defines as any bet that is illegal under federal, state, or tribal law.
In referencing only those "engaged" in the gaming "business," the bill seems to stop short of tagging online casino customers and U.S. banks and credit card issuers as "criminals."
But that could prove illusionary if the U.S. Department of Justice (DOJ) takes the position that customers playing the games, or credit-card companies issuing merchant accounts to casinos, are "engaged" in the online gaming business even though they are neither casino owners, operators or employees.
If the DOJ does take a hard line on this particular issue, the final verdict will probably depend on how federal judges - perhaps even the Supreme Court - eventually define the word "engaged" in the context of the Act.
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If the DOJ does take a hard line on this particular issue, the final verdict will probably depend on how federal judges - perhaps even the Supreme Court - eventually define the word "engaged" in the context of the Act. |
As might be expected in any measure of this sort, the Enforcement Act is full of other ambiguities that will eventually have to be resolved in court or by further legislation.
According to most experts, the only clear-cut, nationwide legislation that could possibly be construed as making online bets illegal is the half-century-old Federal Interstate Wireline Act, which prohibits wagering over telephone or telegraph lines.
The DOJ has repeatedly tried to use the Wireline Act to stifle the online gaming industry and protect the vested interests in Las Vegas, Atlantic City and other gaming centers.
DOJ's success in court has been limited, however, with some judges ruling that a year-2000 Amendment to 1978's Interstate Horseracing Act (IHA) overturned Wireline Act bans on pari-mutual wagering.
Indeed, in the biggest legal setback yet suffered by the DOJ in its ongoing war on internet gaming, the World Trade Organization, in late 2004, ruled that the U.S. was in violation of international fair-trade standards by allowing IHA-sanctioned online gaming nationally, but not internationally. The Bush Administration has since ignored a WTO order to allow international casinos to operate in the U.S. and the WTO is currently considering what, if any, sanctions to apply.
Though the DOJ has until July 2007 to formulate and issue the regulations under which banks, credit card companies and other funding enablers will be required to identify and block money transactions to gaming sites, many - but not all -- online casino operators have already ceased soliciting and accepting accounts from the U.S.
Still other online gaming operators are offering U.S. players the chance to play skill-based games that allow customers to compete for cash prizes using a tournament format that, like sacramental wine in 1920, appears to have slipped through a crack in America's latest experiment in Prohibition.
UK Refuses To Back U.S. Anti-Gaming Play
Tony Blair may have backed the Bush Administration's war against Iraq, but he will not, according to key members of his administration, join in Washington's witch hunt against online gambling.
"We do not support the approach the United States has taken," United Kingdom Culture Secretary Tessa Jowell told representatives of over 30 countries currently hosting online casinos meeting at England's Royal Ascot racetrack. "We will welcome (online casinos) here because we believe that by allowing those who want to gamble to do so over the counter and not under the counter is the best way to protect children. The enormous risk of prohibition is that it forces the industry underground."
Many observers believe Jowell's statement and other recent comments by British politicians signal an upcoming liberalization of Britain's electronic gaming laws, which currently allow online sports betting parlors - but not casinos or poker rooms -- to operate from UK locations. If licensing laws are changed to allow the full panoply of internet casinos to locate in England, the UK will become the first major country to offer a safe haven to online gaming operators. Unfortunately for U.S. residents, however, extradition treaty provisions and certain elements of British law pertaining to publically traded corporations would likely prevent casinos legally operating in Britain from accepting bets from the U.S.
China Readying Red Carpet?
While U.S. legislators are busy digging tiger traps to keep offshore casinos out, lawmakers in the People's Republic of China may be getting close to rolling out a red carpet for online gaming entrepreneurs seeking entry to their potentially enormous market.
The Beijing government, which now "rakes" about 40 percent of the profits from the tables in Macau province's legal brick-and-mortar casinos, is seriously considering legislation to award licenses with a similar tax rate to online casino operators seeking to expand or relocate to the province.
Pro-Gaming EU Decision May Be Overturned
Changes in the European Union regulations scheduled for phase-in over the next three years may negate a European Commission order requiring that Italy, France, and Austria open their borders to internet casinos based in other EU countries.
After an investigation earlier this year, the Commission ruled that protectionist laws creating national sports monopolies effectively prevented online casino and sports book companies from operating in the three countries and violated EU free-market laws. However, a November "Services Directive" approved by the European Parliament may let the three nations off the hook.
The Directive, which is intended to increase free trade by prohibiting practices designed to unfairly keep products and services from one EU company off the market in others, specifically exempts "gambling activities which involve wagering a stake with pecuniary value in games of chance, including lotteries, gambling in casinos and betting transactions" from its provisions.
Russkie See, Russkie Do?
Following in the footsteps of their peers in Washington, legislators in Moscow are considering their own crackdown on gambling - online
and brick-and-mortar. Introduced by Russian President Vladimir Putin, a bill now before the Duma would limit "grounded" casinos to four restricted areas of the huge nation, two in the European part of the country, one in the Asian section, and one in Siberia, and impose unspecified "special restriction(s) on any gambling activity involving the internet or telecommunications."
Though the proposed "About the State Regulation of Activities on Gambling" bill does not detail what these "special restrictions" might be, it does limit ownership of brick-and-mortar casinos to Russian nationals, leading many observers to believe that will be one of them.
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