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by Jacob Sullum, http://www.townhall.com
April 9, 2004
If you like to gamble, you might want to check out http://www.888.com, where you can play blackjack, poker, craps, slots and roulette. If you prefer sports betting, try http://www.betonsports.com.
According to the U.S. Justice Department, I may have just committed a felony. Federal prosecutors say helping Americans find online casinos or sports betting operations could amount to “aiding and abetting” illegal gambling, a crime punishable by up to two years in prison.
Last June, Deputy Assistant Attorney General John G. Malcolm sent a letter to media trade groups warning that their members could be breaking the law by accepting ads for gambling sites. Meanwhile, Raymond W. Gruender, the U.S. attorney for the Eastern District of Missouri, has convened a grand jury in St. Louis that is issuing subpoenas to companies that do business with the online gambling industry.
This campaign of intimidation already has yielded results. Since last fall several media companies, including Infinity Broadcasting, Viacom Outdoor, Discovery Networks, and Clear Channel Communications, have stopped running ads for online casinos and betting services.
This month Google and Yahoo!, two of the most widely used Web search engines, also caved. Although Google was vague about its motivation, Yahoo! said “a lack of clarity in the environment” makes gambling ads “too risky.”
These companies have surrendered their First Amendment rights without a fight, allowing the government to silence speech it doesn’t like by floating a legal theory that almost certainly would fail if it were tested in court. Their capitulation illustrates the chilling effect of vague laws in the hands of ambitious prosecutors.
“There is concern that gambling advertising may create the impression among the public that these activities are legal, when in fact they are not,” Justice Department spokesman Michael Kulstad told Media Daily News. “It’s an ‘aiding and abetting’ kind of thing.”
The law is not nearly as clear as Kulstad implies. The Justice Department maintains that online gambling is banned by the 1961 Wire Act, which prohibits anyone “engaged in the business of betting or wagering” from using “a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers.”
But gambling sites are based in countries where online wagering is perfectly legal. It’s debatable whether a bet placed by an American via the Internet takes place on his computer, at the casino in, say, Costa Rica, or somewhere in between.
As much as the U.S. Justice Department might like to assert jurisdiction all over the world, such interference understandably raises hackles abroad. Last month the World Trade Organization, in response to a complaint from the tiny Caribbean nation of Antigua and Barbuda, ruled that the U.S. is violating its free trade commitments by trying to block cross-border betting.
The WTO’s arbitration panel apparently was convinced by Antigua and Barbuda’s argument that the ban on Internet wagering is a trade barrier aimed at protecting the American gambling industry. “The U.S. says it wants open competition,” said Antigua and Barbuda’s WTO representative, “but it only wants free trade when it suits the U.S.”
As if to confirm the double standard, U.S. Rep. Bob Goodlatte, R-Va., called the WTO ruling “appalling,” saying, “It cannot be allowed to stand that another nation can impose its values on the U.S.” What does Goodlatte think the U.S. is doing when it treats gambling operations that other countries consider legitimate businesses as criminal enterprises? By similar logic, American publishers could be prosecuted for posting material that a foreign government considered indecent or seditious.
In practice, of course, it’s hard to prosecute casino operators based in other countries, which is why the Justice Department is instead going after Americans who sell them services. Given how broadly the government seems to be interpreting “aiding and abetting,” it could bring charges against not just ad carriers but marketing consultants, banks, Internet service providers, telecommunications companies, computer professionals, and anyone else who facilitates online betting.
The upshot could be that both online gambling operations and their customers (who, depending upon the law in their state, may not be committing a crime by placing a bet) escape punishment, while the people who help bring them together are left holding the bag. Such a result might strike jurors as unfair. But given the way its crackdown has worked so far, the Justice Department probably won’t have to worry about that.
©2004 Creators Syndicate, Inc.
Originally posted by Randy
The law is not nearly as clear as Kulstad implies. The Justice Department maintains that online gambling is banned by the 1961 Wire Act, which prohibits anyone “engaged in the business of betting or wagering” from using “a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers.”Solution: Get a wireless network going.
:bigsmile:
Originally posted by Randy
These companies have surrendered their First Amendment rights without a fight, allowing the government to silence speech it doesn’t like by floating a legal theory that almost certainly would fail if it were tested in court. Their capitulation illustrates the chilling effect of vague laws in the hands of ambitious prosecutors.This is what baffles me the most. This legal theory most definately wouldn’t hold up in court – there are just too many variables in the equation.
Originally posted by Randy
The WTO’s arbitration panel apparently was convinced by Antigua and Barbuda’s argument that the ban on Internet wagering is a trade barrier aimed at protecting the American gambling industry. “The U.S. says it wants open competition,” said Antigua and Barbuda’s WTO representative, “but it only wants free trade when it suits the U.S.”As if to confirm the double standard, U.S. Rep. Bob Goodlatte, R-Va., called the WTO ruling “appalling,” saying, “It cannot be allowed to stand that another nation can impose its values on the U.S.” What does Goodlatte think the U.S. is doing when it treats gambling operations that other countries consider legitimate businesses as criminal enterprises? By similar logic, American publishers could be prosecuted for posting material that a foreign government considered indecent or seditious.
©2004 Creators Syndicate, Inc.
No kidding. Their idea of “free trade” has crippled the British Columbia softwood lumber industry – with major job loss, economic hardships, closing of mills, etc.
This article hit many nails squarely on their heads.
Mr. Sullum’s article is also being featured on [url]http://www.reason.com.[/url] He’s the author of a book called Saying Yes: In Defense of Drug Use, and another book called For Your Own Good: The Anti-Smoking Crusade and the Tyranny of Public Health. Notorious libertarian–my kinda guy.
Yeah, he sounds like my kinda guy too. I particularly liked the quote from the Justice Department guy : “It’s an ‘aiding and abetting’ kind of thing.”
Kind of thing… kind of thing…for crying out loud, it’s either aiding and abetting or it’s not. There’s a legal definition of ‘aiding and abetting’ and I’m damn sure it doesn’t have the words ‘kind of thing’ anywhere in it. Wouldn’t like to have that guy as my lawyer.
“Well, your honour, my client is sort of innocent, kind of thing, y’know, he didn’t really almost do it, sort of thing “
LoL
I don’t know about you guys, but when I read the “aiding and abetting kinda thing”, the Justice Department suddenly seemed like less of a threat to our industry.
It’s online gaming related program activities
While we are all laughing about how incompetant and ineffective the justice department is and how flawed their legal arguments are they (and associated government agencies) have been kicking our asses for the last year and a half.
* During that time frame they have convinced all the major credit card processing banks in the US and most of the ones abroad to stop accepting transactions for online gambling.
* They successfully sued Paypal and collected $10 million dollars in fines. This move also removed what was then the most popular alternative form of payment processing we had and cost us 30% of our business.
* Through subpeonas and threats of further legal action they forced major media outlets to drop our advertising. This includes Clear Channel, Infinity Broadcasting, Discovery Channel, Overture, Yahoo, Google and Tera Lycos. The cumulative effects of this are not yet known, but could very well prove fatal for a LARGE percentage of the smaller online casinos and affiliates.
*Their next target is ISP and Web Hosts. If we can’t host sites and ISPs block access to our casinos and our portals how will we shrug that off? (AOL, Earthlink, MSN etc…)
Folks this is VERY Serious stuff that’s going on. I understand the emotional need to let off steam or “whistle by the graveyard”, but it’s important to recognize the severity of our present situation.
I agree and the first order of business is regime change this November. In my opinion, if you are in this business and you vote for Bush and by proxy, Ashcroft, you are sticking a knife in your own back.
I know we don’t have many friends on either side of the aisle, but it’s hard to deny that Ashcroft and his buddy in Missouri (coincidence?) are trying to push us into the Red Sea like Moses.Professor, as always you are 100% correct in your post above. This is serious business and I agree with Jeff that everyone needs to vote Bush out of office.
Professor-
I agree too. And I agree that one of the first steps toward change is electing a new president in November.
The only lobbying organization I know of our business is http://www.profreedom.com.
Does anyone else have suggestions as to what we can do? I think we need to be as organized and show as much solidarity as possible. Those traits are what has helped make the Republicans so incredibly powerful over the last 20 years or so.
Lets hope that the next presidential Skull and Bonesman
John Kerry doesn’t have a big family
1. Jeb Bush … Governor of Florida … helped steal the election for his brother
2. Marvin Bush … a director of security for WTC, American Airlines, Dulles Airport
3. Idiot George Bush … blocked all true investigations into 911
4. Daddy Bush … shareholder of Carlye Group
(one of the biggest benefactor of Afghanistan and Irak saga, the longer the war lasts the more money they make):rolleyes:
All I care is that he has an attorney general in mind who will focus on REAL crime in America, and keeping us safe from REAL threats.
Originally posted by wagerprofits
All I care is that he has an attorney general in mind who will focus on REAL crime in America, and keeping us safe from REAL threats.Yes, and exercise some common sense when it comes to dealing with issues like these.
Here’s an exerpt from http://www.profreedom.com , which points out the logic in regulating online gambling, rather than trying to prohibit it:
Why We Should Regulate NOT Prohibit Internet Gaming
Attempts to prohibit Internet gaming are unlikely to succeed; they will have substantial unintended consequences, and they may have adverse implications for other forms of e-commerce.
Because of the inter-state and international nature of the Internet, it is nearly impossible to establish a prohibition and enforcement regime which does not compromise individual privacy and/or deputize private sector entities to enforce social policy. Most Internet gaming prohibitions, if enacted, would only succeed in driving Internet gaming underground and keeping it offshore. H.R. 21 and S. 627, currently under consideration in Congress, would drive payment processing from the most transparent forms (credit card transactions) toward the least transparent (blind e-cash). Finally, if the U.S. sets the precedent of using settlement (meaning payment processing) as the regulatory choke-point for e-commerce, it is reasonable to conclude that governments at every level in every country will do the same – that could make e-commerce unworkable.
Licensing and regulation of Internet gaming will extend appropriate protection against minor gambling, problem gambling, and money laundering.
Many jurisdictions, from the United Kingdom and Australia to Curacao and Antigua have commenced the process of regulating Internet gaming. They have found that appropriate regulations can ensure that Internet gaming operators know their customers, watch for signs of problem gaming, and follow established money-laundering criteria applicable to other industries.
Licensing and regulating Internet gaming could be a substantial revenue source for U.S. jurisdictions.
Today, in the absence of U.S. licensing, the U.S. Internet gaming market is estimated to be $2 billion, and that is expected to grow. If the operators processing those wagers were U.S. based, that growth will yield many millions of dollars to state governments and the federal government as well. However, because the U.S. chooses not to license, those wagers are placed offshore. If Internet gaming is going to exist, and it is clear that it will, then U.S. jurisdictions should take appropriate steps to ensure that their revenue interests are protected.
A U.S.-based licensed and regulated Internet gaming industry would “suck all of the oxygen” out of an off-shore industry without U.S. licenses.Rep. Bobby Scott (D-VA) put this well in hearing when he said, “If people in the U.S. have a choice between betting at Offhshore.com or Caesar’sPalace.com, they are going to go to Caesar’s every time. The marketing potential of U.S. branding, combined with the confidence that players would feel with a U.S. licensed entity would allow U.S.-licensed operators a substantial advantage.
In sum, licensing and regulation of Internet gaming is the best way to ensure appropriate consumer protections, appropriate protections against money-laundering, and an appropriate revenue stream to U.S. jurisdictions. Efforts at prohibition are unlikely to achieve any of these.
The way I see it, the root of the evil is here:
They successfully sued Paypal and collected $10 million dollars in fines.
That was like a successful Ddos attack, it resulted in a bunch of money.
Now the DOJ is on a roll – either result is acceptable. Either businesses run and hide, or they potentially pay up. No matter what, the DOJ laughs.
‘Folks this is VERY Serious stuff that’s going on. I understand the emotional need to let off steam or “whistle by the graveyard”, but it’s important to recognize the severity of our present situation.’
I agree with this statement entirely. Casinos is still my main source of income, and I do not want to see it dissapear, but what can we as webmasters do? I dont believe in one second that a link to profreedom from our pages is going to make a difference. Nor do I believe that sending an email or a letter to a representative is going to help. Those letters are ignored, they have agendas and that’s all they care about. As for voting I’ll have to leave that up tothose on the right side of the border. I know who i would not vote for.
Regarding the webhosting, the only way we could possibly get around that, is if casinos or webmasters bought thier own hosting provider. This hosting provider would have to be located in Panama or the Caribbean. I know of the problems webhosts have there, with hurricanes and all, but something like that would be better than nothing. Do not dissilusion yourselves, hosting in Canada or the UK will not help. Both countries kiss ass to the big old USA.
Antoine
