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Proposed Treasury Regs Re: Uigea Came Out


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#1 terradawg

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Posted 01 October 2007 - 09:40 AM

http://www.treas.gov...roposedrule.pdfi saw this posted over at P5s and figured i would take a look. i am a lawyer (since last week ;-) ) so i figured i would provide a little analysis where possible (disclaimer: this is not legal advice). first, what type of internet gambling is not defined in the regulations. the regs refer to both the Act and other federal law to determine what is illegal. this brings up the old debate...is online poker illegal? i firmly believe that it is, but i hear over and over on internet forums people blindly saying that it isn't. until someone shows me come conclusive proof otherwise i will continue to believe that it is. it's non-licensed gambling within the US...kind of like running poker games in a warehouse...and we have all seen the stories lately about these getting busted. the act exempts some forms of payment processors, but one that is clearly not exempted is western union and moneygram. i think this deposit option is about to end. i found this passage very interesting:"In the case of payment transactions for thebenefit of offshore gambling businesses, none of the participants in the United States thatprocess the transaction would have a direct relationship with the gambling business thatreceives the payment and would, under the general regulatory requirements, be exemptand not required to have policies and procedures to prevent or prohibit restrictedtransactions."this seems to say that the fact that US based payment processors won't process their transactions directly with offshore gambling businesses because it will occur through an intermediary exempts them from monitoring and restricting the transaction. another passage talks about possibly creating a list of businesses that are engaged in unlawful internet gambling and any payment processor would be forbidden from transacting with the business. this is a proposal under consideration that invites comment on the subject but the tone of this passage indicates that it is not likely because of the difficulty of maintaining an accurate list. here's another interesting passage:The Act does not alter State, local or tribal gaming law. (this cites footnote 26 which reads, "Specifically, the Act defines the term “unlawful Internet gambling” as a bet or wager, which involves atleast in part the use of the Internet, where such bet or wager is unlawful under any applicable Federal orState law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.31 U.S.C. 5362(10)(A)." a quick reading of this seems to say that if you were in a state that had legalized poker and you are playing online poker on a site that is based in the state might not be "unlawful?" i'm not 100% certain here, but bring on CaliforniaPoker.com!!!i'm at work so i only did a brief review of this. my initial reaction is that there will continue to be ways to transfer money to and from poker sites. i continue to believe that online poker is technically illegal, but i don't see the players being targeted anytime soon.edit: just to be clear. this is a proposed rule subject to public comment and revision.
"Too many good docs are getting out of the business. Too many OB-GYNs aren't able to practice their love with women all across this country." —George W. Bush, Poplar Bluff, Mo., Sept. 6, 2004

#2 Flushgarden

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Posted 01 October 2007 - 10:44 AM

For the people who don't like to read...good news or bad news?
-Danny


#3 terradawg

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Posted 01 October 2007 - 10:46 AM

let's call it mildly positive...
"Too many good docs are getting out of the business. Too many OB-GYNs aren't able to practice their love with women all across this country." —George W. Bush, Poplar Bluff, Mo., Sept. 6, 2004




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