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Thoughts on PokerStars VIP Changes
2015-12-20

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2015-05-17

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The Discomfort Zone: Manage it for Growth and Success
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The 4 Main Psychological Principles That Shape Your Poker Play
2015-02-15

A Detailed Rake and Reward Comparison of Three of the Top Poker Sites
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Don't Jump The Gun: Get Full Value From Your Best Hands
2015-02-01

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Recent Legal Developments

THE WEEKLY SHUFFLE, 2007-04-01, by TwoGun

Most of the time, no news is good news for the poker world. This is especially the case if the news is about legal issues.

In March, there were four major legal developments for the poker world. Shockingly, all were positive, or at least appear to be positive. This article will briefly describe these four developments, as well as comment on what the future may hold.

Neteller To Initiate Plan To Pay US Customers

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It's been rough past couple of months for any American with a significant amount of money in his or her Neteller account. Neteller has stated that they are unable to repay Americans and are unsure of when they will be able to do so. The company has, in general, been very secretive about the issue. Many Americans have given up on ever seeing their Neteller funds again. Some have even begun to talk about a class-action lawsuit against the major e-wallet.

Recently, Neteller announced that they struck an agreement with the US Attorney's Office that will enable them to repay their US members. Neteller claimed that they expect to have a plan in place within 75 days.

The announcement restored a lot of people's faith in Neteller. At the very least, it indicates the e-wallet has the intention of repaying its US customers. However, the wording of the announcement should give pause to any American who expects to see his Neteller money anytime soon. Neteller has only stated that it will likely have a plan within seventy-five days. The e-wallet has not indicated when this plan will actually commence or how effective they expect it to be. How long it will take for all of Neteller's American customers to actually receive their money is still anyone's guess.

Neteller made headlines for Canadian customers as well, though not in a good way. Neteller recently decided to exit the Canadian market, effective April 9. Unlike their American counterparts though, Canadian customers can still receive money from online gambling merchants and will likely be able to cash out their funds without any problem.

Barney Frank Attempts To Repeal The UIGEA

The poker community may not have many friends in Washington, but at least it has one. Barney Frank, a veteran Congressman from Massachusetts, plans on introducing legislation to repeal the UIGEA. Frank views the law as a gross violation of individual liberties. News of the proposed legislation sent online gambling stocks soaring. Party Gaming, the company that owns Party Poker, went up 12.5% the day the news broke.

Unfortunately though, Frank has almost no chance of successfully repealing the UIGEA. For most politicians, voting to repeal the UIGEA is political suicide. Many Congressmen still believe online gambling is the work of terrorists, mobsters, and kiddie porn enthusiasts. They conveniently ignore the fact that many of the major sites pre-UIGEA were public companies.

The wording of the UIGEA also makes it almost invulnerable to being repealed. The law blocks financial transfers that are used for "illegal online gambling," where "illegal online gambling" is defined as gambling that violates existing state or federal law. Most Congressmen would raise the issue of why they should vote against a law that merely attacks something already illegal.

The only way to beat the UIGEA is through state legislation. If a state legalizes online gambling for its residents, the UIGEA would not apply since it would no longer be "illegal gambling." "Hopefully, poker can someday enjoy the same status as horse racing, which is currently a legal avenue through which to gamble online in most states.

Placanica Decision

Many European countries are hostile to online gambling because they wish to protect their state monopolies on gambling. They do not want people betting online at foreign-owned sites. Instead, they want players to bet with the highly-taxed gambling operators based in their country. Some European countries have taken more actions against online gambling than others. For example, France is widely considered to be the leader of the prohibitionist movement in Europe since it arrested two executives of Bwin, a major European sportsbook.

Fortunately for online gambling supporters, the EU seems to be on their side. The European Court of Justice recently issued a ruling in the Placanica case that has set a strong precedent for liberalizing gambling throughout Europe.

In 2004, Massimiliano Placanica, Christian Palazzese and Angelo Sorrichio Placanica set up a shop in Italy for Stanley Leisure, a gambling company based in the UK. Stanley was primarily a sports betting operation, with both brick-and-mortar stores as well as an online betting site.

The three men were arrested in Italy and charged with operating an illegal gambling business. The trio protested since Stanley had a valid UK license. The court found in favor of the defendants, citing free trade provisions of the EU. The court believed that a country cannot discriminate against foreign gaming companies in order to protect domestic gaming operators.

Of course, this does not imply that online gambling is here to stay in all European countries. EU decisions are made on a case by case basis. If a country is able to justify its monopoly on the grounds that it significantly guards against gambling addiction, then it may be able shut its doors to foreign competition. Because of this, many of the EU countries will continue attempting to restrict foreign competition under the guise of preventing gambling addiction.

Unlike the United States, where the stroke of a pen led to the exit of most online gambling companies, the European legal battle will take time and be fought on many fronts. The future of online gambling in Europe is still uncertain, but the Placinaca ruling is certainly a win for the online poker community.

WTO Rules Against US In Online Gambling Dispute

Online gambling is one of the leading industries in the tiny Caribbean nation of Antigua. Many of the Antiguan online gambling companies derive most of their revenues from the US players and have been significantly affected by the US crackdown against online gambling.

For several years, Antigua has been battling the United States over the US stance against online gambling. In 2003, Antigua filed a complaint with the WTO arguing the American stance against online gambling is a violation of trade agreements.

In April of 2005, the WTO ruled in favor of Antigua. The WTO's decision was primarily the result of the horse racing exception present in US law. The WTO believed the United States had the right to ban online gambling, provided they banned both domestic and foreign operators.

While the US has taken a stand against online gambling in general, it has also made an explicit exception for horse racing betting. Companies like US-based YouBet.com are allowed to take US bets on horse racing, while Antiguan companies are not. The WTO found this to be an unfair trading practice and therefore ruled against the US.

The WTO gave the United States time to clarify its laws so that it would no longer be in violation of the ruling. The US could have complied in two ways. It could ban all online gambling, including horse racing, or relaxed its stance against online gambling and allowed Antiguan operators access to the US market. Instead, it passed the UIGEA, which hardened its stance against online gambling, though still made the explicit exception for domestic horse racing.

This past Friday, a WTO compliance panel issued a ruling declaring the United States has failed to comply with the WTO's decision. The US still can appeal the compliance panel's decision, though chances are the compliance panel's decision will be upheld.

It is unlikely the United States will alter its position on online gambling due to the WTO's decision. The WTO is not nearly as powerful as the EU, so this decision will not have as much affect on US policy as the EU's decision will have on European countries' policies. Any punishment the United States receives will likely not be significant enough to sway its stance on online gambling. A final Antiguan victory in the case merely allows Antigua to seek trading sanctions against the United States.

The Weekly Shuffle is our Sunday column with our observations and commentary on the poker world. Have an idea for an article? Leave a suggestion on the feedback page.

 


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