By
Dan |
Published
Nov 25 2008, 08:23 PM
Professor I. Nelson Rose is one of the foremost industry experts on internet gambling. His 1986 book, Gambling and the Law, helped put him on the map and he has since acted as a witness and consultant in a number of high-profile internet gambling cases. Rose first came on the PocketFives.com Podcast back in 2006 when the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed into law. Now, two years later, its regulations have finally come to fruition. Rose joins us this week on the PocketFives.com Podcast to break down how the regulations will change the landscape of online poker in the United States, if at all, as well as tell us why we should be worried about the domain name seizures in Kentucky.
The proposed regulations for the UIGEA were introduced last year and opened up for comment. In response, industry groups such as the Poker Players Alliance (PPA) as well as a number of concerned players spoke out against the unmanageable enforcement of the new law. Rose told the PocketFives.com Podcast, “The proposed regulations were really going to be horrible. The Federal Government said that it could not determine when a transaction was illegal gambling or not, but it was going to require banks to look at every transaction to identify and block any money going for what it called unlawful internet gambling.” In essence, the U.S. financial system would become the both the policemen of the law as well as its interpreter.
After taking the comments from concerned members of the industry into account, regulators from the U.S. Treasury and Federal Reserve released the final rules of the UIGEA this month. Rose weighed in on the final regulations now that he has had a chance to digest them: “The regulators pretty much gave up. They tell the banks not to look at individual transactions. What the banks are required to do is due diligence. When they get into a commercial relationship with a new customer, they need to ask that customer what business they’re in and then do a little checking to make sure they’re not lying.” Rose added that few illegal internet gambling sites would have a commercial relationship with a U.S. bank anyway.
Overall, Rose sees little change from the status quo. If a company such as PokerStars (for example) was complying with U.S. gambling law before the regulations were passed, it still is. If it was not complying with U.S. gambling law before the rules came out, it still isn’t. He explained, “I don’t see any change. The online gambling sites that are now still taking bets from the United States will keep taking bets. If someone wires money to them or uses an overseas credit card or even uses a U.S. credit card, they’ll probably continue to be able to do so.”
Meanwhile, the internet gambling world has been keeping a close watch on the latest news from the Commonwealth of Kentucky, where the case involving the seizure of 141 internet gambling domain names will be heard in front of the Court of Appeals on Friday, December 12th. The domain names in limbo include those belonging to many of the major online poker rooms, including Full Tilt Poker and UltimateBet.
Rose has also been a curious onlooker in the case and he told the PocketFives.com Podcast, “It’s a horrible precedent - horrible to the point that even the ACLU has gotten involved because it really does stifle free speech. The judge said that the domain names were gambling devices like slot machines. Clearly, they are not gambling devices. If the name is a device, then anything is a gambling device. They may reverse it on those grounds.”
Several online poker sites have responded to the ruling by Judge Thomas Wingate in favor of the State by not allowing new customers from Kentucky to sign up. They include sites on the Merge Gaming Network as well as Cake Poker. Rose explains what his legal advice would be to sites contemplating pulling out of the Kentucky market: “The Kentucky judge said if the gambling site will stop taking customers from Kentucky, then they’ll be dropped from the list. I would advise my clients to block Kentucky residents. On the other hand, it’s going up to the Court of Appeals.”
Check out Professor I. Nelson Rose this week on the PocketFives.com Podcast. To learn more about Rose, visit www.gamblingandthelaw.com.
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