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Ruling by Justice Dept. Opens a Door on Online Gambling

Guy Korobase

By Guy Korobase,
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Ceka Cianci

Ceka Cianci

Posted
Posted

Guy Korobase wrote:

Based on this ruling ....... Second Life should allow casinos again

 

it won't be like before..i saw this in SLU and was excited for a bit ..but then after the thread went on you could see it would take a lot for it to come back still..

it would all end up having to be regulated gambling..

then pay pal may be a problem unless they changed their policies as well..it would take a lot for it to come back i'm thinking..

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Lynda Baran

Lynda Baran

Posted
Posted

The articles says that States could operate gambling sites within their own state.   I would assume that would mean they could allow other organizations to do so under state regulations.   Unless the opinion is expanded, it sounds like LL might be able to operate some form of state regulated gaming, but that it would have to be limited to residents of California.

I would think that states with Lotteries would start offing the ability to purchase tickets on line, and perhaps expand that into some daily recurring games like Keno.   I doubt it will expand much beyond that unless the DOJ makes a further clarification on exactly what limits they will enforce.

If I were going to gamble on line, which I wouldn't, the last place in the world I'd do it would be in SL.

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PeterCanessa Oh

PeterCanessa Oh

Posted
Posted

While I understand it the legislation sounds so petty: talking about across state lines, etc.  Have any of them noticed that telecommunications, including the internet, is global?

[i'm no lover of gambling but there are any number of internet 'casinos'.  Any country only hurts itself with prohibition when it has no control over supply.  If the demand exists it will find a supply, legal or not (booze, drugs, gambling, etc., etc.)]

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Pussycat Catnap

Pussycat Catnap

Posted
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PeterCanessa Oh wrote:

While I understand it the legislation sounds so petty: talking about across state lines, etc.  Have any of them noticed that telecommunications, including the internet, is global?

Legal "terms of art" that have specific meanings in law is why you see words like that.

Much like saying "IP Address" in technology does not mean you're referring to the address of intellectual property, and being 'peer reviewed' in science  does not mean someone glanced over at you from across the way and gave you a score from 1 to 5.

 

 

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PeterCanessa Oh

PeterCanessa Oh

Posted
Posted

I can see your thinking there Bree, good question.

I'd expect it to go the same way as Linden Homes; introduced without warning, undermining a large section of their existing customers and using content (eg; houses) taken from more favoured residents.  So I'll start importing my bingo/roulette/blackjack/slots/other software ready for when LL want to grab the money.

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Innula Zenovka

Innula Zenovka

Posted
Posted

If gambling does return to SL, I would imagine that -- to satisfy the requirements of the online payment processors like Visa or PayPal, if nothing else -- it would have to be conducted by someone with an online gambling license acceptable to both the US authorities and the payment processors.

A more likely scenario than LL introducing gambling, I think, would be one of the established online gaming operators starting their one in-world casinos, using their own scripted applications.  I'd suspect we'd simultaneously see the end of Zyngo and so on, unless the operators could themselves obtain gaming licenses.

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Ceka Cianci

Ceka Cianci

Posted
Posted

Roseysun Galicia wrote:

Only way the door to Online Gambling is opened is if the
is modified, changed, repealed, etc.  Until then it is still illegal for Linden Labs to allow gambling in SL.

 

wouldn't that only cover gambling that is considered unlawful internet gambling?

i'm just looking at the title of the act ..but i'll probably read it later..

but to me it sounds from the title that it would cover unlawful internet gambling not gambling that would be considered legal..

some things kind of amend themselves as laws change..just curious if this is one of those?

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Ceka Cianci

Ceka Cianci

Posted
Posted

Roseysun Galicia wrote:

What Gambling/Betting/Wagering is covered by UIGEA?
  The
made
all
betting and wagering/gambling online across state lines illegal. It also makes it illegal for any bank or financial institution to process any transaction from online gambling.

What was the DOJ announcement?
The DOJ received a request by the states of Illinois and New York as to the lawfulness of using the Internet and out of state transaction processors to sell lottery tickets to in state adults. The
on the last page:
  • Given that the Wire Act does not reach interstate transmissions of wire communications that do not relate to a “sporting event or contest,” and that the state-run lotteries proposed by New York and Illinois do not involve sporting events or contests, we conclude that the Wire Act does not prohibit the lotteries described in these proposals. In light of that conclusion, we need not consider how to reconcile the Wire Act with UIGEA, because the Wire Act does not apply in this situation. Accordingly, we express no view about the proper interpretation or scope of UIGEA.

Have there been any proposals for changes to the law since 2006?
Yes.
of them have gotten very far. In
Congress once again rethought its ban on internet gambling. Those attempts have not moved far either.

What about state laws?
New Jersey, California, Illinois, Florida and Iowa have
bills for
Intrastate
online gambling/poker/lottery sales. A representative from
to these new developments announced a bill to prohibit any online gambling in that state.

Are they enforcing UIGEA?
April 15, 2011 the US Attorney Office for the Southern District of New York and the FBI brought charges against Poker Companies operating online.

 

Ceka Cianci wrote:
Roseysun Galicia wrote:

Only way the door to Online Gambling is opened is if the
is modified, changed, repealed, etc.  Until then it is still illegal for Linden Labs to allow gambling in SL.

 

wouldn't that only cover gambling that is considered unlawful internet gambling?

i'm just looking at the title of the act ..but i'll probably read it later..

but to me it sounds from the title that it would cover unlawful internet gambling not gambling that would be considered legal..

some things kind of amend themselves as laws change..just curious if this is one of those?

 Edited to correct typo.

how it reads to me..It makes the processing of transactions for “illegal Internet gambling” illegal..

UIGEA made it illegal for banks to process Internet bets for prohibited forms of gaming..those forms of gaming have changed now..

since the wire act involved over state line illegal wagering ..it trumps UIGEA with the new changes if those states do not have laws making those types gambling illegal..

so if california has a law saying online poker is illegal then  UIGEA  can be applied..if new york allows online poker..those guys may be getting off..unless  the courts say..well it was law at the time..you still broke the law when it was law..hehehehe

but it doesn't apply to states that allow it and do not have laws making online poker or the allowed types of online gambling illegal..so the transactions would be legal in those states now..

they wouldn't fall under the restrictions..

(From the definitions)

(7) Restricted transaction.— The term “restricted transaction” means any transaction or transmittal involving any credit, funds, instrument, or proceeds described in any paragraph of section 5363 which the recipient is prohibited from accepting under section 5363.

 

§ 5363. Prohibition on acceptance of any financial instrument for unlawful Internet gambling

 

No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling—

(1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card);

(2) an electronic fund transfer, or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of such other person;

(3) any check, draft, or similar instrument which is drawn by or on behalf of such other person and is drawn on or payable at or through any financial institution; or

(4) the proceeds of any other form of financial transaction, as the Secretary and the Board of Governors of the Federal Reserve System may jointly prescribe by regulation, which involves a financial institution as a payor or financial intermediary on behalf of or for the benefit of such other person.

 

§ 5366. Criminal penalties

 

(a) In General.— Any person who violates section 5363 shall be fined under title 18, imprisoned for not more than 5 years, or both.

(b) Permanent Injunction.— Upon conviction of a person under this section, the court may enter a permanent injunction enjoining such person from placing, receiving, or otherwise making bets or wagers or sending, receiving, or inviting information assisting in the placing of bets or wagers.

 

§ 5367. Circumventions prohibited

 

Notwithstanding section 5362 (2), a financial transaction provider, or any interactive computer service or telecommunications service, may be liable under this subchapter if such person has actual knowledge and control of bets and wagers, and—

(1) operates, manages, supervises, or directs an Internet website at which unlawful bets or wagers may be placed, received, or otherwise made, or at which unlawful bets or wagers are offered to be placed, received, or otherwise made; or

(2) owns or controls, or is owned or controlled by, any person who operates, manages, supervises, or directs an Internet website at which unlawful bets or wagers may be placed, received, or otherwise made, or at which unlawful bets or wagers are offered to be placed, received, or otherwise made.

this is how i am reading it so far from the link you provided in your first post..basically the wire act changes weakens the range the UIGEA had since it is really based on what is illegal from other laws..those transactions are only restricted if the wager is unlawful..UIGEA doesn't make a transaction illegal..the state or federal laws do which the UIGEA does not over step..

(From the Definitions)

(10) Unlawful internet gambling.—

(A) In general.— The term “unlawful Internet gambling” means to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.

 

(B) Intrastate transactions.— The term “unlawful Internet gambling” does not include placing, receiving, or otherwise transmitting a bet or wager where—

 

(i) the bet or wager is initiated and received or otherwise made exclusively within a single State;

(ii) the bet or wager and the method by which the bet or wager is initiated and received or otherwise made is expressly authorized by and placed in accordance with the laws of such State, and the State law or regulations include—

(I) age and location verification requirements reasonably designed to block access to minors and persons located out of such State; and

(II) appropriate data security standards to prevent unauthorized access by any person whose age and current location has not been verified in accordance with such State’s law or regulations; and

(iii) the bet or wager does not violate any provision of—

I) the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.);

(II) chapter 178 of title 28 (commonly known as the “Professional and Amateur Sports Protection Act”);

(III) the Gambling Devices Transportation Act (15 U.S.C. 1171 et seq.); or

(IV) the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.).

the rest goes into tribal

 

again..all this is based on how current the site is and how accurate it is..it's by no means everything in the sections..i tried to keep it to things the wire act changes would have impact on..

i may have missed something i am sure lol

this is what happens when people work thrid shift and nobody else is awake around them..LOL we kill time hehehe

i'm curious how close i actually am on all this.. hehehehe i guess we will see soon..that is if people decide to reply to it hehehe

signed..a curios kittly cat

 

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Ceka Cianci

Ceka Cianci

Posted
Posted

Roseysun Galicia wrote:

Dear Curious Kittly Cat: 

Let me start with it was a great post in response.  Just an FYI the website in question is a Legal Institute associated with a major (and old) University.  To note one point that you made in your reply a State Supreme Court also stated in an analysis of UIGEA as it pertained to a case they heard.  :-)

Hope the below helps:

1. The Department of Justice's mission and authority:
  • "To enforce the law and defend the interests of the United States according to the law; to ensure public safety against threats foreign and domestic; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans."

They issue interpretations and opinions about laws; not rulings or law changes.

2.  The entire 13 page statement they made is a discussion about the application of the
1961 Wire Act
to a proposal for two states to run in state lotteries with tickets being sold in state and to adults.

This is the relevant portion of the 1961 Wire Act:

 
  • Subsection 1084(a): Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

This is the final section of the DOJ's statement:

 
  • What remains for resolution is only whether the lotteries proposed by New York and Illinois involve “sporting event
    or contest
    ” within the meaning of the Wire Act. We conclude that they do not. The ordinary meaning of the phrase “sporting event or contest” does not encompass lotteries. As noted above, a statute enacted the same day as the Wire Act expressly distinguished sports betting from other forms of gambling, including lotteries.
    See supra
    pp. 10-11 (discussing § 1953(e)). Other federal statutes regulating lotteries make the same distinction.
    See
    18 U.S.C. § 1307(d) (2006) (“‘Lottery’ does not include the placing or accepting of bets or wagers on sporting events or contests.”).
  •  Nothing in the materials supplied by the Criminal Division suggests that the New York or Illinois lottery plans involve sports wagering, rather than garden-variety lotteries. Accordingly, we conclude that the proposed lotteries are not within the prohibitions of the Wire Act.
  • Given that the Wire Act does not reach interstate transmissions of wire communications that do not relate to a “sporting event or contest,” and that the state-run lotteries proposed by New York and Illinois do not involve sporting events or contests, we conclude that the Wire Act does not prohibit the lotteries described in these proposals. In light of that conclusion, we need not consider how to reconcile the Wire Act with UIGEA, because the Wire Act does not apply in this situation. Accordingly, we express no view about the proper interpretation or scope of UIGEA.

3. The Supreme Law of the US is established in the Supremacy Clause of the US Constitution.  It establishes the U.S. Constitution, U.S. Treaties, and Federal Statutes as "the supreme law of the land." The text decrees these to be the highest form of law in the U.S. legal system, and mandates that all state judges must follow federal law when a conflict arises between federal law and either the state constitution or state law of any state.

US Constitutions Commerce Clause states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

The Supreme Court has both upheld a state's law that conflicted with a Federal Law and over turned a state law when it didn't conflict with a Federal Law however did conflict with the Commerce Clause.

4.  Court Rulings:
  • The U.S. Fifth Circuit Court of Appeals in 2002
    prohibition on the transmission of wagers applies only to sports betting and not other types of online gambling
  • The
    Court stated in Rousso V State 2010 (830401maj):  "The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), codified as 31 U.S.C. §§ 5363-5367, prohibits any person engaged in the business of gambling from accepting money in any form for participation in unlawful Internet gambling.  Id. § 5363.  The UIGEA recognizes that some types of bets are rendered unlawful under state law, id. § 5362(10)(A), and clarifies that it does not alter any state gambling laws, id. § 5361(b).  Nowhere does the UIGEA permit the states to regulate gambling activities outside their borders or without regard to the commerce clause.  The federal wire act of 1961 (Wire Act) criminalizes the use of wire communication facilities to place bets through interstate or foreign commerce.   18 U.S.C. § 1084(a).  The Wire Act then clarifies it does not prevent transmission of information assisting the placement of bets from a state where the bet is legal to another state where it is legal.  18 U.S.C. § 1084(b).  Again, the Wire Act recognizes the states authority to regulate the type of gambling permitted within its borders, but does not delegate any authority to regulate interstate commerce with impunity. Congress has not delegated to the states its authority to regulate interstate Internet gambling."

5. Even if a state allowed Online Gambling of for example Video Poker.  In order for LL to allow Residents of SL to participate they would:
  • Have to make sure only Adults could play
  • Have to make sure the resident in RL was physically located within the state where it was legal at the time they participated in the activity
  • Have to make sure that only the type of betting/wagering/gambling that was made legal happened
  • Have to make sure all transactions happened inside the state where it was legal
  • Have to make sure all the funds processed were done in the state it was legal

They could not get it wrong or believe that the Federal Law didn't apply to them.  As defined in UIGEA it applies to wagering or betting "something of value".  The Wire Act specifies money or credit.  Lindens are a currency inside SL, and can be traded for RL currency; making it something of value, money, or credit.

Below is the list of Charges,
the owners and operators of the three Internet Poker Companies that believed the US Congress had no control over them are facing:
  • Charge: Conspiracy to Violate Unlawful Internet Gambling Enforcement Act:  Max Penalty 5 Years in Prison, Fine of $250,000 or twice the gross gain or loss; 3 years supervised release.
  • Charge: Operation of Illegal Gambling Business:  Max Penalty 5 years in prison; fine of $250,000 or twice the gross gain or loss; 3years supervised release; forfeiture of proceeds of offense
  • Charge: Conspiracy to Commit Bank Fraud and Wire Fraud:  Max Penalty 30 years in prison; fine of $1,000,000or twice the gross gain or loss; 5years supervised release; forfeiture of proceeds of offense
  • Charge Money Laundering: Max Penalty 20 years in prison; fine of $500,000 or twice the amount laundered; 3 years supervised release; forfeiture of proceeds of offense
  • Charge: Violation of Unlawful Internet Gambling Enforcement Act: Max Penalty 5 Years in Prison, Fine of $250,000 or twice the gross gain or loss; 3 years supervised release.

As initially stated the laws, including UIGEA, have to be changed before LL could bring Gambling Legally into SL. 

Signed,

Searching for more tea. :-)

 

 

 

Let me also say ..Great response as well  thank you =)

i drifted from the real matter at hand and your response has put me back on course.. =)

 

i can see now it would be way too much of a pain for LL to bring it to second life..i believe i said early on it would have to be regulated..

but seeing your points in your response it makes it much clearer just how hard it would be even if it was regulated..they couldn't keep track..i would say it looks impossible at this point really hehehehehe

i guess i had gotten off path with my research and lost track of it being about second life and more about states lol

again thank you =)

*hands you a cup of tea*

signed. Earl Grey

hehehehhe*winks*

 

 

 

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Ceka Cianci

Ceka Cianci

Posted
Posted

Rene Erlanger wrote:

Love it or hate it.....Gambling within SL would kick some life into it! Gambling was one of those huge activities in SL pre-2007 ban.

i agree it would be a nice influx if they could add it in some way..but it looks like they could never monitor it..

also  it was actually mid summer 2007 when they banned it..june or maybe july i think..i remember having to pull all our extra curricular things from the club back then that fell under the ban..what a bummer that was then..so many people stopped coming to the grid right away..a lot of peoples incomes were hit instantly also  that the gamblers would spend money on =(

what a drastic change that happened overnight to a lot of people..we knew it was coming and had planned for it ahead of time..but a lot never saw it coming..=(

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Qie Niangao

Qie Niangao

Posted
Posted

Many folks who were in SL before gambling was banned remember it as a huge benefit to the SL economy.  Full disclosure: I made some money off of the activity (I built casinos under contract to one of the big gambling equipment makers). Nonetheless, I think the actual economic impact on the grid tends to be greatly overestimated.

It was a heady time in the SL economy, the RL housing bubble was still going strong in the states, and LL couldn't print virtual land fast enough. It's easy to be nostalgic about it.  In reality, however, most of the gambling money stayed in tight little cycles of circulation. Transaction volumes were huge, of course, but most of the money came and went in the casinos, with just a bit of splash-over to regular businesses.  Kinda like Vegas, I suppose.

That's not to say that the change wasn't disruptive.  That could have been handled a lot better, from our viewpoint at least -- maybe not in the eyes of Linden lawyers.  The end result was a regulated monopoly on gambling scripts and a wink-wink-nudge-nudge faux "skill game" label, but the Lindens couldn't say that out loud (and still won't), so it took a long time for word to get out to all the clubs that had a few slots and a sploder.

(Incidentally, to the main topic of the thread: If all legal impediments were lifted -- and this little DoJ ruling is a far cry from that -- if that were ever to happen, I would not expect to see resident-run casinos back in SL, and indeed I'd expect a clamp-down on the current "skill-based" loophole.  If it were all really legal and above board, I'd expect LL to want a much larger cut of the action than just skimming tier from residents; rather, I'd expect them to make exclusive licensing arrangements with the large internet gaming operators.  There won't be any call to dust off those old slots from Inventory.)

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Sharonuk

Sharonuk

Posted
Posted

Well I used to have casino's back then and when they was banned I left as All my friends was on my msn list anyway so had no use for SL no more.

I do have an account I made up a few days ago to see what SL is like now but I find it boring and no way would I bother buying L$ or investing £1000's like I did before, once bitten twice shy.

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