Our wonderful justice department is doing everything it can to eliminate online poker:
http://www.nytimes.com/2004/05/31/te...&ex=1086580800
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Our wonderful justice department is doing everything it can to eliminate online poker:
http://www.nytimes.com/2004/05/31/te...&ex=1086580800
Hey can u copy and paste that article. Im not a member there and dont really want to fill out all the stuff to become one. Thanks
I wondered if that might happen. Apparently that link "expired" after 1 day.
U.S. Steps Up Push Against Online Casinos by Seizing Cash
By MATT RICHTEL
Published: May 31, 2004
Federal law enforcement officials routinely seize money they suspect is connected to activities like money laundering, terrorism or drug smuggling. But in early April, United States marshals seized $3.2 million from Discovery Communications, the television and media company, in an aggressive effort to crack down on a new target, Internet gambling.
The money initially belonged to Tropical Paradise, a Costa Rica-based Internet casino operation, which in October paid Discovery for television spots to advertise an online poker room, ParadisePoker.com. According to court documents, the government seized the money and told Discovery, which is based in Silver Spring, Md., that it could be party to an illegal activity by broadcasting such advertisements.
Federal prosecutors contend that online gambling sites are illegal, but the offshore casinos fall outside their jurisdiction. So for nearly a year, the government has been trying to curb the sites' activities by investigating and pressuring American companies that provide services to offshore gambling sites on the theory that they are "aiding and abetting" the operations.
Until now, the effort has largely involved seeking information from American companies, including major broadcasters, Web portals and industry consultants. The seizure of money significantly escalates the government's attack.
The move has raised strong criticism from First Amendment experts, media industry executives and people involved with offshore casinos. They assert that the federal government is relying on an untested legal theory in taking action against American companies, and using tactics more typically used against organized crime activities.
"This is not drug money or terrorist money," said Rodney A. Smolla, dean of the University of Richmond School of Law. "The fact it is being treated as such shows a crusader's zeal against offshore gambling."
The possible message being sent, legal experts said, is that any American company that does business with an offshore casino - including software makers and consultants - could be in danger of having proceeds from that business seized.
"This is a strategy of intimidating anybody who is in the chain of commerce," said Lawrence Walters, a lawyer who works with offshore Internet casinos, as well as software companies that do business with the casinos.
The Justice Department declined to comment about this case or other investigations in this area.
Tens of millions of Americans place bets over the Internet, wagering on sporting events and on casino games like virtual blackjack, roulette and poker. But the casinos are outside the United States, typically in Costa Rica and the Caribbean or in Britain, where the operations are fully licensed and legal.
The legality of online betting is a complicated matter of some dispute in the United States. The government asserts that the federal Wire Act prohibits all Internet casinos, but the courts have been divided, legal scholars said.
The individual states also have laws that prohibit any gambling enterprises that they do not formally authorize. Some states, but not all of them, make it illegal for individuals to place a recreational bet; New York, for instance, does not make it illegal to place a bet online.
In June 2003, the Justice Department sent letters to trade groups representing major broadcasters and publishers, telling them their members could be violating the law by displaying advertisements on behalf of offshore casinos. The government said the businesses could be seen as aiding and abetting the activities of the casinos.
Then, Raymond W. Gruender, the United States attorney in the Eastern District of Missouri, convened a grand jury, sending subpoenas to companies asking them to provide a broad range of information about their relationships with offshore casinos. The investigation had a significant impact. Some major broadcasters, including Infinity Broadcasting and Clear Channel Communications, stopped taking gambling ads last fall. Google and Yahoo, the Internet search engines, said in April that they would stop taking such advertisements.
So far, executives at media companies have not voiced public challenges to the government campaign. An executive for one media company, who asked that his firm not be identified so as not to attract further attention from the Department of Justice, said that the government was promising to go easy on broadcasters and Internet sites that cooperate with its inquiry.
The executive said he had heard from people involved in the investigation that the government might begin levying fines or pressing charges against media companies.
The financial stakes are not insignificant. In court papers, Tropical Paradise, a Costa Rican casino operator, said it had entered into a contract, dated Oct. 5, to pay $3.5 million for advertising during broadcasts of the "World Poker Tour" on the Travel Channel, a part of Discovery Networks, which is a unit of Discovery Communications. (Discovery is a partner of The New York Times in another cable channel.)
Under the contract, the Travel Channel was to broadcast 308 30-second commercials in a six-month period for ParadisePoker.com, where people can play virtual poker free or for pay.
In a separate contract, dated Oct. 14, Tropical Paradise agreed to pay $350,000 to run advertisements on the Discovery Web site. According to the court papers, filed in federal district court in Maryland, Tropical Paradise paid the amount of the contracts in full, and was told the money would be refunded if the advertisements did not run.
Indeed, only a small portion of the advertisements were broadcast. On Oct. 25, Discovery, after learning of the government's position about advertising of offshore gambling, told Tropical Paradise that it would cease broadcasting the commercials. According to court papers, the parties agreed Discovery would refund the money for commercials that did not run.
But Tropical Paradise never got its money back, and in April it sued Discovery for breach of contract in federal district court in Maryland, asserting that it is owed $3.25 million for the unperformed portion of the two contracts. In response to the lawsuit, Discovery, without challenging Tropical Paradise's right to the money, said it no longer had the money because it had been seized by the United States marshals on April 6.
"The issues presented by this case are intertwined with an ongoing criminal investigation (and seizure of money) conducted by the United States Department of Justice of offshore online gambling operations," according to Discovery's court filing on May 7.
Sanford Saunders, a partner for Greenberg Traurig, a law firm representing Tropical Paradise, said Discovery should not have taken the money in the first place if it had doubts about the legality of the advertising. "Discovery knew our business," Mr. Saunders said. "They knew the purpose of our advertising, and they told us this could be legally done."
The issues are considerably broader than a contract dispute between the two companies, said Mr. Smolla, the dean of the University of Richmond law school. It is not clear that the operators of offshore casinos are violating federal law, he noted. And he said there are First Amendment protections that apply to broadcasters, which could weaken any case against them in this context.
The issues are made even murkier because federal prosecutors are trying to extend their reach to companies operating legally overseas. The World Trade Organization in March issued a preliminary ruling that said the United States is violating its free-trade obligations by prohibiting online gambling operations.
Some members of Congress reacted angrily to the W.T.O. ruling, calling it an effort to extend the values of other countries to the United States.
But that argument could be applied to federal actions as well, Mr. Smolla said.
"It's an extraordinary exercise of American hubris to say that we have the right to seize the money," Mr. Smolla said. "This is a global worldwide and economic network, and we're using this vehicle to extend our laws into another nation in a very aggressive way."
Hey, Natural, thanks for the post, that was a very interesting read...
I hope I don't get in trouble for promoting and advertising online poker, and it would really suck if they start clamping down on this.
A while ago I was playing at EmpirePoker at Starbucks, and a cop walked in and saw us playing. We spoke to him about the legality of what we were doing, and he said that it was totally fine and legal since Poker was deemed a game of skill, not chance, in California...
Yeah, I was not familiar with that concept before I moved to Cali. That law seems kind of flawed though.. Unless I'm mistaken, it deems any card game to be a game of skill, even chance games like blackjack? Seems like they didn't put much thought into that law. Was it passed in the 1800s or something?Quote:
Originally Posted by ttanaka
Anyways, the Feds don't care what is legal under California law. Last year they arrested and convicted California citizens in federal court for growing and/or selling medical marijuana in California, even though California law specifically allows this.
The California law was passed in the mid-90s (1995, I think). Poker is the only card game that it deemed legal in the state. Other games, like blackjack, are still considered games of chance (not skill). Unlike other betting card games, poker can be played anywhere at anytime in California, not just in sanctioned casinos.Quote:
Originally Posted by TheNatural
I don't think the Feds are circumventing California law, but rather exploiting the gray area regarding online gaming in general, as Californians may not be completely in the clear when it comes to playing even poker (which is legal in California) online:Quote:
Originally Posted by TheNatural
http://www.gambling-law-us.com/Artic...california.htm
But even this last notion is disputed in some articles regarding California gambling law.
EDIT: I just found this...
http://www.winneronline.com/articles...2/inelson2.htm
I stand corrected.Quote:
Originally Posted by Xianti