The NETELLER Debacle

"The federal government is still asserting that the 1961 Wire Act forbids online poker ... Other courts have already ruled that the 1961 Wire Act applies only to sports betting."

You are aware that Neteller is quite often used to transfer funds offshore for the purpose of sports betting? In fact, many of Neteller's marketing campaigns target American sports betters. That being the case, the Attorney General must prove is that an offshore company violates the 1961 Bank Wire Act when it offers to Americans, through the Internet, the ability to transfer funds to offshore sports books.

The question then appears to become, "Where does the American border exist in the Internet?".

Mr. Smith above points out something Ms. Shulman has overlooked: the actual complaint against the Neteller execs only references illegal sportsbetting. As the case progresses it will be interesting to see if the DOJ tries to include, as money "laundered," money Neteller sent to online casinos or poker rooms - if they do not, then the only interesting aspect of the case will be the jurisdictional one raised by Mr Smith, but it will also be a tacit admission that the other forms of online gambling do not violate the law. If the DOJ does try to include casino and poker money, then this case may well develop into the defintive case on the legality of online casinos and poker. Should be very interesting.

Anyone who reads Allyn's articles loses IQ points and gets awfully close to her IQ every second. Her writing style and arguments are just plain moronic and often incorrect. Do some research Allyn before typing. Or better yet, throw your computer out.

America does not control the world. Neteller is not listed on any US stock exchange and thus your whole article about the SEC is stupid and just makes you look like a complete moron (not that it was difficult to do). Also, online poker has never (show proof if you are going to state a fact) been ruled out of the 1961 wire act. Sports betting has been ruled as what it states but poker has never been specifically ruled OUT. Get your facts right!

I am not going to look up the actual cite for Loren Koss, the 5th Circuit US Court of Appeals specifically ruled in a case called "In Re: Mastercard" that the 1961 Wire Act was applicable only to sportsbetting. Although that decisioin did not reference poker specifically, it did say specifically that online slot play ond other casino games were NOT covered. If they are not covered, poker aint coverd either. Get your facts straight. (PS - even if you are not on a US stock exchange, you must register with the SEC if you are going to make your stock available for purchase in the US).

First, the prosecutions are being used as a proxy against the American poker player, playing is not nor ever has been illegal.
I suspect a deal will be reached by all parties, niether wants to go to court.
As to "(show proof if you are going to state a fact) been ruled out of the 1961 wire act. "In-fact 2 Federal Courts (UNITED STATES COURT OF APPEALS - For the Fifth Circuit No. 01-30389
In Re: MASTERCARD INTERNATIONAL INC. INTERNET GAMBLING LITIGATION) have ruled (the appeal Nov. 2002) the 1961 Wire Act does not even apply to poker or gambling, ONLY sports betting.
This fact, the Wire Act does not apply to Poker is in fact correct, the Attorney General though believes it does even though 2 ruling say different. The court NEVER ruled if the Wire Act applies to licensed gambling businesses, NO has ANY court to date ruled. The 2 cases brought BOTh resulted in 'deals" averting prosecution and a final (though way down the road) answer.
Additionally, the DoJ states the Wire Act includes betting on horses, the UIGA and the Horse Racing Act EACH exempt this from the Wire Act as are lotteries run by individual states and Indian Tribes are somewhat exempt as well.
Now, we are down to sports betting and money laundering.
I suspect, in the end the ruling may hinge on INTENT, that is the INTENT of the Wire Act, not the activity by Neteller and others.
The "intent' was organized crime, the Mafia, as so stated by Att. Gen. Robert Kennedy when lobbying for passage and in the application there of since then.
No, this case will not go to fruition in court either, expect a settlement very soon, neither wants to really get the questions resolved.

You are correct, it is the London Stock Exchange only, I believe...whether or not they have a commission like the USA I have no idea and am too lazy to research it...it's hard enough to finish this post. If I am to understand things, and believe me I roughly have no idea what I'm ever talking about, can't a country inforce internet guidlines that prevent its citizens from going to certain websites, or even parts of websites (i.e. China & Yahoo - if you know the story)...so instead of going after the businesses that provide the services, why not go after those that provide the roadway to the service? Seems like a better and easier (and perhaps cheaper - since we are all paying our own government to screw us out of money) way of doing things. Furthermore, what I am really pissed off about is the repeated notion that all of this is "in the best interest of the people" bullcrap. No one in the government cares if a citizen is addicted to gambling, so long as that citizen still has money to pay taxes. It is and will alwys be a money thing...if it wasn't, the cigeratte business would have been long dead years and years ago.
I feel this is all just a big farce anyways - the USA is pushing all of these foreign sites out of the country so they can launch a brigade to begin regulated and taxed local online gambling facilities...you'll see, in the (very near?) future you will see internet gambling back, legal, and respected in the USA, but it will also be USA companies running it, and making sure they and all of the players pay due taxes.

Also in regards to the internet providers:
Is it illegal for a Taxi Driver to pull over for a client so client can pick up a prostitute? I wonder...if so wouldn't the ISP's be responsible and have a case against them by the DOJ? I do not know anything!

Neteller also did business with online sports betting sites. If courts have said that the 1961 Wire Act applies to sports betting isnt this where the legal hook could be?

"so instead of going after the businesses that provide the services, why not go after those that provide the roadway to the service?"
Steve, actually, this is contained within the UIGA, though doubtful it will ever be enforced. There is the thing here called Freddom of Speech. Also, promotion of sporting bets ODDS are legal, even telling where to place bets at is legal, just accepting the money is not legal. ALL this is in the UIGA, lol.
Additionally, US banks that allow EFT's can be gone after as well.
The reality is, I do not see out government going after American interests, no, they will fight this battle over seas in the US courts.
"Neteller also did business with online sports betting sites. If courts have said that the 1961 Wire Act applies to sports betting isnt this where the legal hook could be? " Well, so far all cases that involved the internet, ALSO involved using Telephones, the internet was not even a twinkle in the eye so to speak in 1961. No court has ruled solely on a charge based on the internet alone. Lets face it, ALL internet is not transmitted via phone lines (the GV'T. stance is that is uses phone lines), there are cell applications and satallite service as well.
The stock is not traded on the U S Stock Exchanges, no SEC filing in the U S was needed or required. You can however, do online and "join" and buy stocks in London, well, actually Japan, China, France, Germany an all others as well.
The 2 recent cases in the courts were both settled pre-trial, neither really wanted to "gamble" on the outcome. You know, a coin flip for all your chips, mmmmmm, tough call sometimes.
BTW, Poker is a "casino" game and the plantiff's who brought the siut were - drum roll - POKER players.

I just thought of what the Judge in this case could rule. Let the buyer beware!
I hope we (the voting people) get rid of all the idiots who opened this can of worms in the first place.
Big brother bothers me... Alot!

Allyn, if the government loses, can NETeller, Lawrence, and Lefebvre countersue the DoJ for damages? And do you have any idea as to why this administration is cracking down on the industry like this? Thanks.

Joseph I think alot of has to do with why the Wire Act was created in the first place...this totally mirros Kennedy's attack on the mafia all of those years ago...you must be relentless in your attack, hitting all areas at once, never bending to critics, never admitting mistakes, until the whole thing collaspses...internet gambling is a monster...A HUGE MONSTER, and for the USA to get what they want they must do it this way before the voters push out the attackers...I get it...I dont like it...but I get it.

Since online poker is nothing short of fraud it is a good thig that the US Govt. has taken what steps they have to stop US citizens from participating in the games.

If operators of online gaming sites (of any kind) want to market to US customers, they should be subjected to the exact same scrutiny as any Las Vegas casino. If they want to operate on our shores then move your operations onshore and lobby for the creation of a gaming commission that is a true independent objective regulator.

Otherwise they can shut up and peddle their crooked games to the rest of the world.

Just saying I've been playing online poker for over 3 years, I've never once been frauded by a site. I've only been playing on the 6 to 8 most reputable places, but I've never once lost my money when I've wanted to withdraw it. I think Carson has made one hell of a careless accusation, to say "online poker is nothing short of fraud."

That being said Paradise Poker's operator has testified before the North Dakota legislature that he would operate in the U.S. if he could and subject himself to regulations (look in AJS's archives, thank you). The U.S. could easily invite the sites here, and subject them to the same level of regulation as other casinos.

Instead the hypocrisy of the U.S. government has taken the stand that online gambling is somehow less moral than the lottery, the tracks, and the indian casinos which they endorse.

I guess it has become typical of this administration to forgo the appropriate legal procedures before imposing its will on who or whatever it wants. Since the arrests of Neteller's founders, I have been trying to find a definitive answer as to whether or not any US Federal laws have been violated. I am not a lawyer, so reading the "Unlawful Internet Gambling Enforcement Act", is not only mindnumbing, but it seems very vague and connected to the 1961 laws, which are difficult to apply to online poker.
Why is the government skirting the issue by passing laws making the transfer of funds to online gaming sites illegal, and not taking measures to put in place updated laws which explicitly declare the legality, or unlawfulness of internet poker. Again, I'm no lawyer, but I cannot see how Neteller can possibly be convicted once this thing goes to trial, based on the "dominant element" criteria (chance vs. skill) alone, not to mention other areas of ambiguity, (i.e. Neteller is not subject to U.S. law). Is this just an attempt to scare other payment processors out of the US market? Do the feds really believe they have a solid case? Are they not working on a formal prohibition because they foresee a legalized, and regulated domestic online industry in which US dollars will stay in the US, and the Government will get their cut through taxation of winnings? I think the one area where the government is clearly being deceptive is their motive for this action. From the quotes I've read by the Congressman behind this recent legislation, they are trying to have us believe that their motives are based on "family values" and the "social harms of internet gambling". Why aren't they even admitting that this is about money? Clearly the $6 billion (or so) US dollars that are going to these foreign sites annually is the motive. All the government has been doing is cutting off the biggest pipelines of US funds, and its become a game of "whack-a-mole", 3 more companies pop up in its place. I truly hope that the judicial branch (whichever court eventually rules on the Neteller case) has the fortitude to stand up against this administration's wreckless attack on the industry. Like its "strategy" in Iraq, this makes no sense. To me, it looks like this will not be formally resolved with Bush in office because the laws that exist do not support their actions. This is just another mess that Bush is going to leave behind once he's FINALLY out of office.

We,, I have taken time to read the Neteller 'prospectus" and the government complaint.
Humm, Neteller NEVER stated they were possibly breaking any laws, in-fact they state they are NOT in the gambling business at all.
More-over, Neteller states that by EXTENSION they may be regulated at some point if the UIGA ever passed and Gambling Sites were regulated in any fashion, THEN they may be forced to follow the same. That, and that ALONE is all they admit in the prospectus.
Now, the charges, they have nothing to do with poker, rather betting on NFL football games by a member of the DoJ who opened an account and then violated the Neteller User Agreement of not breaking any laws in your jurisdiction while using the service. This betting is specifically prohibited (Sports Betting) in New York State (not however POKER), thus the charges are concerning Sports Betting Transactions.
Who will win, I do not know, who loses, well that one is easy, ALL AMERICAN POKER PLAYERS!

What in the hell is Carson Horton (Jan.25th post) even doing on this website? He must be a DOJ spy because everyone else on this website is PRO-POKER and not negative about it like he seems to be. I respectfully suggest that Carson Horton stop wasting cardplayer.com's bandwidth and go find something else to complain about. In fact, if he will post his address, I'll send him some cheese to go with his whine.