Second Argentinean Bill Seeks to Block Online Gambling

A second legislative proposal has been presented in Argentina aimed at disrupting the activities of online gaming companies, this time in the province of Santa Fe. The move follows the proposal last week in Buenos Aires of a bill seeking to ban remote gambling in the province.

 The latest bill, from Santa Fé Provincial Councillor Luis Alberto Mauri of the PDP-FPCS party, proposes penalties for local companies that do not block internet sites providing games of chance for money. The penalties range from fines to prison sentences.

 “We understand that gambling is a part of social behaviour and increasingly popular online, but the fact that citizens in our province have access to this method of gambling does not mean that the State should refrain from exercising control over it,” said Mauri.

Mr. Mauri added that it was the responsibility of the state to guarantee that games are offered “only via legal channels” in order to be able to collect taxes for subsequent investment in social programs.

Online Gambling Summit to Take Place in Kentucky Next Week

The Internet Commerce Association (ICA), a non-profit trade organization representing domain-name investors and developers and the direct search industry, is responding to Kentucky’s attempt to seize 141 domain names of online gambling companies by holding what it’s calling an emergency summit.

Hosted by the Bluegrass Institute, which calls itself “an independent research and educational institution offering free-market solutions to Kentucky’s most pressing problems,” the summit takes place 1 p.m. Oct. 6 at the Capital Plaza Hotel-Frankfort in Kentucky’s capital.

Scheduled to appear on the panel are representatives from the Poker Players Alliance, Interactive Media Entertainment & Gaming Association, and the Americans for Tax Reform organization, as well as ICA executive director Michael Collins.

The summit takes place a day before a Kentucky judge is set to decide if the Commonwealth has the right to seize the domain names used to gamble and play poker by using a law that allows Kentucky to seize gambling devices. The Commonwealth is arguing that URLs should be considered gambling devices in this case.

The summit will focus on why the ICA believes the seizure is wrong and how it violates the commerce clause of the U.S. Constitution. People interested in attending the summit should visit www.internetcommerce.org.

KENTUCKY EXPECTATIONS

Next Tuesday’s resumption of debate on the legality of the attempt by the state of Kentucky to seize control of 141 international online gambling domains (see previous Online-Casinos.com/InfoPowa reports) continues to generate significant interest both within and outside of the industry.

Judge Thomas Wingate of the Franklin Circuit Court, who had earlier signed off on a temporary seizure of domains through registrars at the behest of outsourced lawyers working for the state, faced a platoon of legal representatives from online gambling companies, trade associations and public interest groups supporting freedom of speech and the Internet at the initial hearing last week.

Lawyers for both sides argued legal technicalities centered on the legal standing and identification of domain owners and claims that the action against 141 domain names took place “under cover” and with no notice to their clients. They sought a continuation to brief Judge Wingate on matters of law which they contended will demonstrate the court has no jurisdiction and should dismiss the action.

Judge Wingate gave all involved until October 7 to submit detailed legal briefs on their positions and qualifications for legal standing. The judge pointed out that the case was a complex matter in law where decisions reached could set precedents and have far reaching consequences outside the online gambling industry . It was therefore appropriate that those with the right to be heard submitted their arguments for debate and examination.

However, the judge sounded an ominous note when he told lawyers representing the domain names at issue: “You are going to have to eventually pony up and say who these people are.”

In the meantime the judge’s temporary seizure of the domains remains in place.

The October 7 hearing looks likely to be even more crowded as opponents to the Kentucky state’s action, which officials have admitted is aimed at forcing operators to bar Kentucky online gamblers and pay unspecified compensation to state coffers, present their arguments in a case that is already attracting wide mainstream publicity.

The state’s lawyers, employed on a contingency “no win no pay” deal, have claimed that online gambling falls within existing legislation which prohibits ‘gambling devices’ because domain names can be classified as such devices, a point that will no doubt be hotly contested. Online gambling is not specifically declared illegal in Kentucky, where Governor Steve Beshear has proved to be a staunch supporter of land-based casino and horseracing activity.

Among those who will have legal representatives present are the Internet Gaming Counsel, The Poker Players Alliance, iMEGA, the Internet Commerce Association and the Americans for Tax Reform, and it is understood that an open press conference is planned for the day before the October 7 hearing where a diverse range of representative bodies will make relevant statements.

The executive director of the Poker Players Alliance, John Pappas is driving the press conference and urges all interested parties to discuss participation with him by using the PPA website.

Successful Gambling Regulation

The crux
Online gaming activity is set to top $24.5 billion by 2010 yet widespread global regulation of the industry has yet to take place. The online gambling industry is headquartered almost entirely outside the United States, but almost half its customers reside in the United States. While the United States prepares to open its doors to regulating online gambling, another lesser-known entity is already cashing in, big time.

Alderney – a tiny island some 30 km off the coast of Guernsey- with a population under 2,500, has struck gold. They are now home to a regulated online gambling community and it’s already paying dividends. Its Gambling Control Commission has contributed $6.2 million towards the development of its commercial quay and the money just keeps on coming.

License fees for online casinos cost around £70,000 per annum, and the goal is to get 100 casinos signed up within 3 years. The number of licensed companies in Alderney spiked from 25 to 34 last year. Already gambling takings have translated into £4.2 million cash in the bank.

The process
If applicants can prove their games are fair and honest – with the protection of minors and addicts in mind, that their management is not linked to the underworld then they are eligible to apply. The benefits for getting regulated (white-listed) in Alderney: limitless bandwidth, zero-rated corporation tax, plus freedom to maintain a legitimate and profitable gambling operation. According to Robin le Prevost, e-commerce development head for the States of Alderney, “Interest in Alderney has never been higher.”

It is unrealistic to prohibit Internet gambling because regulation and internal compliance provides revenue and checks and balances on an industry that is experiencing unparalleled growth. Likewise the tiny island of Malta is set to have at least 147 online gambling companies regulated. Perhaps the time has come for other countries to take notice?

Casino bosses defy U.S. anti-online gaming laws

A new online casino is setting itself up against the American government by opening up to U.S. players.

Internet gambling is effectively banned in America by the Unlawful Internet Gaming Enforcement Act, or UIGEA.

But Cherry Red — a sister site of Rushmore Casino — has opened with a declaration that all US citizens are welcome.

It’s even offering a dedicated 1-800 customer service phone number.

Kentucky Governor Attempts Mass Domain-Name Seizure Targeting Online Gambling Sites

In a surprise political move termed separately as a “stunt” and a “blatant protectionist move” by interested observers, Kentucky Governor Steve Beshear on Thursday pushed through a court order to seize domain names connected to various online gaming sites allegedly accepting business from Kentucky residents.

The order, signed by a Franklin County (KY) Circuit Court judge, names 141 different Internet domains covering several different forms of online gaming, including sports betting, bingo, casino-style games and poker. Many major US-facing sites were listed in the complaint, including but not limited to the following: PokerStars.com, FullTiltPoker.com, Doylesroom.com, Bodoglife.com, sportsbook.com, UltimateBet.com, AbsolutePoker.com, Microgaming.com (which is a software provider and does not provide any sort of gaming directly under the “Microgaming” name), and Pokertime.com.

A story published by the Kentucky Post at kypost.com erroneously reported that all 141 domain names had been transferred to “an account of the Plaintiff, Commonwealth of Kentucky” as dictated by the court order, but only two minor, non-poker domains – luckypyramidcasino.com and highrollerslounge.com – are known to have had their domains seized under the order, which was sent electronically to Internet registrars after its issuance. Both of those domains are believed to have been serviced by US-based registrar service ENOM, allowing the seizures to occur. None of the poker sites above, however, are believed to use US-based domain services, and all of those sites remained accessible with no interruption in service.

Governor Beshear, in comments made to state news outlets, readily admitted to the protectionist nature of his actions. “The owners and operators of these illegal sites prey on Kentucky citizens, including our youth,” Beshear was quoted as saying, “and deprive the Commonwealth of millions of dollars in revenue.” One of Beshear’s election platforms, coincidentally, was an expansion of gambling for Kentucky residents.

An AP wire story offered comments in a similar vein: “Unlike casinos that operate on land or on riverboats in the United States, these operations pay no tax revenues, provide no jobs and yield no tourism benefits,” Beshear said on Monday. “They are leeches on our communities.” Beshear also described horseracing interests such as Louisville’s Churchill Downs as Kentucky’s “signature industry.”

Kentucky Secretary J. Michael Brown chimed in with a similar statement. Said Brown, “Gov. Beshear has once again demonstrated that he is willing to take bold and innovative steps to protect Kentuckians and Kentucky’s legitimate businesses.”

The Kentucky court order drew nearly universal condemnation from the poker world, including a swift rebuke from the Poker Players Alliance. In a statement on the PPA site, executive director John Pappas was quoted as follows:

“The Poker Players Alliance is outraged at the actions taken by Kentucky Governor Steve Beshear and the Franklin County Circuit Court to seize the domain names of Internet gambling websites. We believe this action not only unduly restricts the freedom of Kentucky residents to play games of skill, such as poker, online, but sets a precedent for censorship of the Internet by force.”

Continued Pappas, “Many of Governor Beshear’s arguments – that online poker is illegal, unregulated, and without a mechanism to capture tax revenue – are false. Online poker is not illegal under Kentucky law, is regulated in its home jurisdiction and the Commonwealth of Kentucky chose not to license and regulate poker websites.” PPA’s Kentucky state chairman, Rich “The Engineer” Muny, also promised a more direct response to Beshear’s actions in the coming days. A second hearing involving the forfeiture of the domain names is scheduled for October 25th.

The censorship issue regarding domain-name seizures is important as well, given that some sites included in the seizure attempt are information-only and all involve voluntary participation. Several previous attempts at domain seizures involving US concerns have been thrown out at later dates on First Amendment grounds, a topic likely to be pursued if and when Beshear’s fast-tracked court order comes under challenge.

Republicans bluff on anti-gambling provision

Just a few days ago we heard that the US Republican party, commonly known as GOP (Grand Old Party), had unexpectedly withdrawn online gambling prohibition from their platform.

The provision that prohibited internet gambling of all forms, including online bingo, poker and casino games, was removed from the Republican platform by a draft committee. This caused a huge speculative buzz around the world that the days of the UIGEA prohibition might be coming to an end.

However the Republicans backtracked on their earlier policy revision, and just a few hours later the exact same provision was reinserted into the platform and the draft committee adjustment was nulled.

The Poker Players Alliance had been lobbying the Republican party to remove the online gambling prohibition from the GOP platform, with many comments posted on the GOP website urging for the removal of restrictive laws against online poker.

In the wake of the UIGEA, many Americans still continue to play games online, a fact supported by the many US facing online casinos, online bingo sites and poker sites with the ‘US friendly’ tag.

EU-U.S. online gambling dispute intensifies

The United States seems to be on a collision course with European Union online gambling companies based on the country’s Unlawful Internet Gambling Enforcement Act.

Reuters released a story earlier this week that said the dispute between the remote operators and the U.S. could soon be headed to the World Trade Organization.

“It looks very much as if this matter will … be sent to the WTO at the end of the commission’s investigation,” said Lode Van Den Hende, an outside counsel for the Remote Gambling Association.

The European Commission began an investigation after the RGA complained about being excluded from the U.S. online gaming market. The real issue is that the U.S. has allowed some American-based online gambling entities, especially those handling wagers on horse racing, to continue operating despite UIGEA.

A formal complaint to the WTO could mean the U.S. will be faced with millions of dollars in trade damages in the future.

It would not be the first time that a country has successfully fought the U.S. over online gaming laws through the WTO. Late last year the tiny Caribbean nation of Antigua and Barbuda, where a large number of the world’s gaming servers are located, won the right to waive U.S. copyrights in films, television and music in an unusual ruling by the WTO.

Antigua and Barbuda filed a formal complaint against the U.S. over the loss of billions of dollars in its online gambling business since UIGEA was passed and the U.S. market was closed to offshore operators.

As of yet the Caribbean nation hasn’t ignored any U.S. copyrights, and officials have mentioned several times they would prefer to settle the dispute amicably.

For its part, United States government representatives have said several times that the country never intended to allow online gambling services to be a part of its WTO commitments.

According to the Reuters article, an unidentified EU trade official said he expected the European Commission to decide by the end of the year whether to start a WTO case.