First, I will answer the question I received from people in the poker industry this week regarding Doyle Brunson. No, he did not get arrested. When I spoke with him this morning, he laughed and told me that these types of rumors fly about every year. Usually the rumor says he was taken out of a poker game in handcuffs for cheating! Now that's hilarious because he could beat a table even if all the other guys were cheating!
Next, let's talk about what's going on in the world of poker. Although the first online site opened its virtual doors about 12 years ago, there has been very little governmental intervention for most of that time. A few years ago the government issued subpoenas to some media companies without much follow-up. Recently, the government is taking a more proactive role, fumbling around trying to figure out a way to slow down the billion-dollar online gaming industry.
It has been incorrectly reported that the NETELLER arrests were the result of the new law passed at the end of last year. This is inaccurate, because, as I have explained in other articles, the ex post facto law does not permit the government to convict someone of a crime that was not illegal when an act was performed.
The Unlawful Internet Gambling Enforcement Act (UIGEA) was not in effect in 2005. If Lawrence resigned in May of 2006 and Lefebvre resigned in December of 2005, they cannot possibly be charged with violating the UIGEA, which wasn't signed by the president until October of 2006. So reports that say the UIGEA is already in full force and effect are inaccurate.
The Federal Reserve and the Treasury Department are required by July 10, 2007, to issue final rules for banks and financial institutions to block attempts to use bank accounts for online gaming.
Although some banks are attempting to comply with the UIGEA now, the concept of controlling a financial institution is incomprehensive. How does a bank know from where a check comes? Let's say an online site has a bank account with 25 signatories, such as Jack Cooper, Joe Smith, John Doe, etc. and then the site sends a check from John Doe to a US citizen who wants to withdraw some winnings. There is no possible way the bank could know that the check originated from an online site.
That notwithstanding, the South Florida Business Journal reported a few days ago that federal authorities have asked Florida banks to pay attention to all Internet gambling and small international wire transfers in an attempt to cut down on alleged "money laundering."
Further, as I write this, there is a convergence of efforts going on both for and against online gaming.
On one hand, the Florida International Bankers Association is meeting today at its annual Anti-Money Laundering Compliance Conference. US bank regulators and bank officials are discussing pending requirements under the UIGEA.
On the other hand, in Turks and Caicos, new, innovative, completely legal ways of sending and receiving funds are being explored. CardPlayer.com will keep you posted on this front.
The Poker Players Alliance is growing rapidly, with great plans for 2007 and a goal of getting a UIGEA poker carve-out passed this year. Although American Gaming Association President Frank Fahrenkopf told me he doesn't think there's a chance for a carve-out, the AGA wants to see a feasibility study conducted to determine the viability of regulating the industry.
While some people in our government seem to be going nuts, reason exists in other places in the world. On the heels of Frist busily sneaking the UIGEA through Congress, the first international summit for online gaming occurred in the UK with an agenda of discussing how to regulate the industry. Culture secretary Tessa Jowell criticized US antigambling legislation, telling delegates from 32 countries that the UK did not support the United States' stance on Internet gambling and was worried that its legislation would create unregulated offshore sites.
The UK position regarding online gambling is imminently reasonable. The UK has stated publicly that it wants online regulations that serve three basic principles: crime-free gaming, protection of the vulnerable, and insuring that citizens can engage in fair betting.
Even tiny Antigua regulates online gaming with great finesse, which includes independent audits and surprise visits to online sites to make sure rules and regulations are being enforced. When I was visiting with members from the Antiguan government a few months back, I learned that representatives from the US went to Antigua to learn from them, evidently to no avail as of yet.
So where do we stand? We are in the unique position of witnessing prohibition all over again. The government simply cannot tell good citizens what to do with their hard-earned money. History has proven that at day's end, good sense will prevail. In a free society, if we want to have a nice cabernet sauvignon after dinner or play some online poker, we should ultimately be protected to do just that. It's just a matter of time.
