I finally found the anti-online gambling amendment text. I went back where I left off yesterday at the Library of Congress website and I realized that while the link should have taken me to the proper section, it didn't. Instead it took me to the beginning of the document. I had to forward through to the end to get to Sections 801, 803, and 803, the anti-internet gambling sections.

Reading the text gave me a headache after a night of waking up every two hours for feeds (yes, still after nine months). I was, however, still able to find a few key pieces which stood out.

Perhaps I'm biased, but I couldn't find a real reason why they wanted to pass this law. Their findings weren't particularly convincing. "`(a) Findings- Congress finds the following:
`(1) Internet gambling is primarily funded through personal use of payment system instruments, credit cards, and wire transfers.
`(2) The National Gambling Impact Study Commission in 1999 recommended the passage of legislation to prohibit wire transfers to Internet gambling sites or the banks which represent such sites.
`(3) Internet gambling is a growing cause of debt collection problems for insured depository institutions and the consumer credit industry.
`(4) New mechanisms for enforcing gambling laws on the Internet are necessary because traditional law enforcement mechanisms are often inadequate for enforcing gambling prohibitions or regulations on the Internet, especially where such gambling crosses State or national borders."

I don't really see number 3 as valid since internet lotteries and internet horse race betting is still legal. Actually, I don't see the logic behind any of these since other forms of online betting is still legal.

It no longer matters where the internet sports books servers are located, it's all illegal. "The term `unlawful Internet gambling' means to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made."

With that said I doubt the US federal government will go after the individual. What they most likely will do is go after the individual's winnings or withdrawals, thus punishing without having to prosecute. Which brings me to whether one can still deposit…

Congress tried to close the gap between third party deposits. "No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling--
`(1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card);
`(2) an electronic fund transfer, or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of such other person;
`(3) any check, draft, or similar instrument which is drawn by or on behalf of such other person and is drawn on or payable at or through any financial institution; or
`(4) the proceeds of any other form of financial transaction, as the Secretary and the Board of Governors of the Federal Reserve System may jointly prescribe by regulation, which involves a financial institution as a payor or financial intermediary on behalf of or for the benefit of such other person."

Didn't catch it? Check out number two again. If the money transfer is made from the casino to a player via money transmitting business (read, Neteller) then it is illegal. The thing about this is, how will they know? Neteller and Moneybookers are located off-shore, which means the US will not have access to their records. A player could deposit into Neteller and from Neteller to the online gambling establishment. They can receive all withdrawals and winnings the same way. The US government has no legal reason to block Neteller as the money transfer could originate from a person as easily as it could from something else. I don't know how they can legally block Neteller deposits or withdrawals. This could be the hole in the law which makes the law rather irrelevant.

They could theoretically choose to block the casinos via the Internet Service Provider (ISP's) in order to prevent money being illegally transferred. Look at number one below. "`(b) Requirements for Policies and Procedures- In prescribing regulations under subsection (a), the Secretary and the Board of Governors of the Federal Reserve System shall--
`(1) identify types of policies and procedures, including nonexclusive examples, which would be deemed, as applicable, to be reasonably designed to identify and block or otherwise prevent or prohibit the acceptance of the products or services with respect to each type of restricted transaction;
`(2) to the extent practical, permit any participant in a payment system to choose among alternative means of identifying and blocking, or otherwise preventing or prohibiting the acceptance of the products or services of the payment system or participant in connection with, restricted transactions;
`(3) exempt certain restricted transactions or designated payment systems from any requirement imposed under such regulations, if the Secretary and the Board jointly find that it is not reasonably practical to identify and block, or otherwise prevent or prohibit the acceptance of, such transactions; and
`(4) ensure that transactions in connection with any activity excluded from the definition of unlawful internet gambling in subparagraph (B), (C), or (D)(i) of section 5362(10) are not blocked or otherwise prevented or prohibited by the prescribed regulations." If you look at number 4 you'll find that they did make sure what was previously legal, stays legal.

The Poker Players Alliance is trying to be as positive as possible in pointing out that they didn't attach this bill to the 1961 Wire Act. While the Department of Justice considers all internet gambling illegal the courts have found that sports betting is illegal while regular casino games and poker are legal. As Congress hasn't gotten to the details of which games are considered illegal the Poker Players Alliance is hoping on a wing and a prayer that Poker will be considered a skill game and will become legal. At this point I find that highly unlikely.

Jay Cohen should be glad he decided to go to court when he did. If he fought the law after this law goes through he would have faced up to five years in prison (instead of two). "`(a) In General- Any person who violates section 5363 shall be fined under title 18, imprisoned for not more than 5 years, or both."

You can read all the text for H. R. 4954 online at: http://thomas.loc.gov/cgi-b

Posted on: October 5, 2006

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