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US politicians and the media are wrong to describe the UIGEA as a ban on online gambling
The nationally syndicated top American columnist Jacob Sollum set the record straight in his widely read column this week when he said that the Unlawful Internet Gambling Enforcement Act recently rammed through Congress is NOT a ban on Internet gambling per se.
"Contrary to early press reports, Congress has not banned online gambling," Sollum writes. "Instead, it has opted to maintain an uncertain legal environment in which businesses that cater to Americans' taste for betting run the risk of harassment and prosecution by overzealous Justice Department officials who twist the law to fit their moral views."
The columnist quotes Bodog CEO Calvin Ayre, who has correctly pointed out on a number of occasions that: "It will likely take months to fully understand what, if any, ramifications there are from this new law."
Sollum goes on to describe how the Act, stalled in the Senate up to that point, was rammed through Congress in a late-night session hours before the recess to fight mid-term elections, attached to a totally unrelated primary bill on port security which it was imperative to pass.
Sollum makes an intelligent and reasoned analysis of the new law and its implications for the industry. The UIGEA makes it a federal crime, punishable by up to five years in prison, to receive a payment in connection with "unlawful Internet gambling." It also mandates regulations requiring financial institutions to block such payments, he writes.
But - he points out - the act defines "unlawful Internet gambling" as online wagering that already is prohibited by state or federal law. It explicitly does not expand the category of forbidden gambling.
"The new law therefore leaves untouched the Wire Act of 1961, which prohibits using a 'wire communication facility' to help people place bets 'on any sporting event or contest.' Although the Justice Department maintains that the Wire Act covers all online gambling, the law's text and history indicate it applies only to sports betting, a reading the U.S. 5th Circuit Court of Appeals endorsed in 2002," the columnist explains.
"Perhaps recognizing that its broad interpretation of the Wire Act is legally shaky, the Justice Department has targeted online bookmakers, as opposed to casinos or poker parlors," Sollum claims, giving as example the arrest of David Carruthers.
"Even those arrests are questionable applications of the Wire Act, since they involve foreign companies with Web sites based in countries where online gambling is unambiguously legal," he points out.
Sollum refutes statements by politicians and certain sections of the media that the UIGEA constitutes a ban on Internet gambling.
"Although the Unlawful Internet Gambling Enforcement Act did not change the legal status of online gambling, two of its main sponsors, Rep. Jim Leach of Iowa and Sen. John Kyl of Arizona, both Republicans, called it a "ban," he remarks. "Perhaps taking a cue from these misleading descriptions, Forbes Magazine reported 'the new act now categorically outlaws online gambling,' while The Washington Post claimed 'placing bets over the Internet was effectively criminalized.'
"The Wire Act and the Unlawful Internet Gambling Enforcement Act do not apply to garden-variety gamblers 'placing bets over the Internet' but only to people 'engaged in the business of betting or wagering.' That business is no less legal now than it was before," Sollum asserts.
Sollum concludes with the observation that, to be on the safe side, financial institutions regulated by the U.S. government probably will shun gambling sites (if they weren't doing so already). But as a visit to any of the sites that continue to serve Americans confirms, there are several alternative payment methods the U.S. government will have a hard time blocking, including electronic checks, money orders, offshore based e-wallet systems and credit card transactions processed in other countries.
"As before, then, the [U.S.] government will pretend online gambling has been banned, and millions of Americans will give that position as much respect as it deserves," is his pungent closing comment.
US politicians and the media are wrong to describe the UIGEA as a ban on online gambling
The nationally syndicated top American columnist Jacob Sollum set the record straight in his widely read column this week when he said that the Unlawful Internet Gambling Enforcement Act recently rammed through Congress is NOT a ban on Internet gambling per se.
"Contrary to early press reports, Congress has not banned online gambling," Sollum writes. "Instead, it has opted to maintain an uncertain legal environment in which businesses that cater to Americans' taste for betting run the risk of harassment and prosecution by overzealous Justice Department officials who twist the law to fit their moral views."
The columnist quotes Bodog CEO Calvin Ayre, who has correctly pointed out on a number of occasions that: "It will likely take months to fully understand what, if any, ramifications there are from this new law."
Sollum goes on to describe how the Act, stalled in the Senate up to that point, was rammed through Congress in a late-night session hours before the recess to fight mid-term elections, attached to a totally unrelated primary bill on port security which it was imperative to pass.
Sollum makes an intelligent and reasoned analysis of the new law and its implications for the industry. The UIGEA makes it a federal crime, punishable by up to five years in prison, to receive a payment in connection with "unlawful Internet gambling." It also mandates regulations requiring financial institutions to block such payments, he writes.
But - he points out - the act defines "unlawful Internet gambling" as online wagering that already is prohibited by state or federal law. It explicitly does not expand the category of forbidden gambling.
"The new law therefore leaves untouched the Wire Act of 1961, which prohibits using a 'wire communication facility' to help people place bets 'on any sporting event or contest.' Although the Justice Department maintains that the Wire Act covers all online gambling, the law's text and history indicate it applies only to sports betting, a reading the U.S. 5th Circuit Court of Appeals endorsed in 2002," the columnist explains.
"Perhaps recognizing that its broad interpretation of the Wire Act is legally shaky, the Justice Department has targeted online bookmakers, as opposed to casinos or poker parlors," Sollum claims, giving as example the arrest of David Carruthers.
"Even those arrests are questionable applications of the Wire Act, since they involve foreign companies with Web sites based in countries where online gambling is unambiguously legal," he points out.
Sollum refutes statements by politicians and certain sections of the media that the UIGEA constitutes a ban on Internet gambling.
"Although the Unlawful Internet Gambling Enforcement Act did not change the legal status of online gambling, two of its main sponsors, Rep. Jim Leach of Iowa and Sen. John Kyl of Arizona, both Republicans, called it a "ban," he remarks. "Perhaps taking a cue from these misleading descriptions, Forbes Magazine reported 'the new act now categorically outlaws online gambling,' while The Washington Post claimed 'placing bets over the Internet was effectively criminalized.'
"The Wire Act and the Unlawful Internet Gambling Enforcement Act do not apply to garden-variety gamblers 'placing bets over the Internet' but only to people 'engaged in the business of betting or wagering.' That business is no less legal now than it was before," Sollum asserts.
Sollum concludes with the observation that, to be on the safe side, financial institutions regulated by the U.S. government probably will shun gambling sites (if they weren't doing so already). But as a visit to any of the sites that continue to serve Americans confirms, there are several alternative payment methods the U.S. government will have a hard time blocking, including electronic checks, money orders, offshore based e-wallet systems and credit card transactions processed in other countries.
"As before, then, the [U.S.] government will pretend online gambling has been banned, and millions of Americans will give that position as much respect as it deserves," is his pungent closing comment.