Hmm.....interesting idea. I know people. Who do we beat up first?

I certainly understand all the frustration though. The DOJ is like the big schoolyard bully who steals your lunch money every day (I don't really know - never actually happened to me) and there's nothing you can do, but go home and kick a wall. It's just so difficult to be patient when you're constantly reading things like this which make your blood boil.

If the PPA set up a player owned site, would that have standing? There are plenty of software shells out there to use.

no line will be of use(except litigation) if the gop wins the house. the gop wants nothing but to legislate morality and gambling will always be on that list. count me out if the ppa starts shelling $$ into a gop controlled congress that will always have the religious right as their strongest ally and who are our greatest enemy. the conservative ideal of personal freedom is something thats been dead for a long time now and is only spoken as false words to those that hate the left more than they love the truth.

You may want to avoid the "broad brush" of painting all Republicans as anti-gambling and, by inference, all Democrats as pro-gambling because, frankly, it's just not accurate. My Congressman, John Campbell (R), represents one of the most conservative districts (if not the most conservative district) in California and is a co-sponsor of HR 4976. Meanwhile, the two Senators who represent California, Barbara Boxer and Dianne Feinstein, both quite liberal Democrats, are very much opposed to online gambling legalization.

Yes, there's a 'morality' wing among the GOP who will always be opposed to gambling. But it will be quite interesting to see how the new GOP Congresscritters--most of whom espouse limited government--will react when they reach Washington. This is a group that the PPA will hopefully reach out to as they should be supportive of our cause.

+1

And the PPA has been reaching out to many of these "small government" republicans, mostly through the work of TE.

Online poker is simply not a partisan issue. The interplay between Rs and Ds does make a difference, especially among the Congressional leadership. But it is wrong to assume that if the Rs take control of the House or Senate we are doomed. It will make things a bit harder if we lose the leadership advantage that Frank has, or if Reid goes down, but changes like that hardly "doom" our issue; and that is so precisely because we have worked hard to get bi-partisan support.

Skallagrim

If you play online poker, the DoJ has been stealing from you in one of two ways, or both:

1) Hindering the online poker economy in any way, shape, or form is theft of the winning players' profit potential.

2) Whether you profit or not from online poker, our liberties are being witheld from us every second of every day we deal with the "online poker is banned" misnomer. Not to mention we get a bad rep, like this guy.

I have to disagree with the gist of this. Technically, you are right. Republican does not mean, necessarily, you are against us, nor Democrat, for us. But a pro-Ipoker bill will have a harder time getting through a Republican Congress than the one in power now. If we can’t get something through now, it’s very unlikely we will be able to get something through when the new Congress takes their oath.

For example, who is even going to put a bill out there? Frank will have lost his agenda-setting power in the House Banking Committee.

I do think there are other opportunities. For example, HR wants to get something through too. Maybe we can block them until they include us. But even under that scenario we are much better off with a Democratic Congress than a Republican one. And it's just a function of denial to assert otherwise.

Is this related to the recent delay in e-checks

Can someone explain to me what law was broken here?

Yep. Nobody should have any illusions that there are not large swaths of the government who do not agree with the PPA's legal positions regarding online poker. And until there's a definitive court ruling on the matter, there's always the chance that poker players could lose if the big court case ever came down the pike.

We need a good online poker bill.

Perhaps none. But here's the thing. The DOJ has tremendous prosecutorial resources. Banks, also, have all sorts of other things to worry about-- they need the Federal Reserve to clear their checks and permit them to loan out their reserves, the FDIC to insure them, TARP to bail them out, etc.

So the federal government has all sorts of leverage against them.

Now, let's say the actual chance of the DOJ getting a ruling that online poker is illegal is 20 percent. That may be too high, that may be too low, that may be correct. But it's a number to work with. Or, to be more accurately, let's say that Goldwater Bank's in-house counsel estimates that the chance of the DOJ getting that ruling is 20 percent.

Now, if you are a Goldwater Bank executive with a fiduciary duty to maximize the business' value and profitability for the shareholders, are you going to take a 1 in 5 risk that the DOJ can shut down your company? Or are you going to pay the piper and do what they want?

This is why, even though it matters whether the Wire Act or the UIGEA really apply to online poker or not, it doesn't matter as much as you might think in the absence of a definitive court ruling. The federal government has tremendous leverage at its disposal, should it choose to exercise it. Indeed, even this case doesn't show you the full extent of its leverage-- they can also go after telecommunication companies / ISP's, for instance. As long as there are significant elements in the federal government who believe that online poker is illegal, they can make our lives miserable, especially over the long term. And as long as their legal interpretation is not so completely stupid that even a cautious corporate counsel would say "go ahead and challenge it, they got no chance", corporate America is likely to bend to the will of the Feds.

We need a poker bill.

Wow, this sucks. Nice explanation lawdude.

I still don't really get how something that seems to be in such a legal gray area, can be seen as definitely illegal by the DOJ. WTF? Headasplode.

For over 25 years the DOJ used the "honest services" law to charge and prosecute numerous businessmen for questionable business practices. People in the legal community complained that their broad interpretation of this law was wrong and their prosecutions overzealous. The DOJ laughed and continued prosecuting. Most defendants pled guilty.

Then came the Enron case. They would not offer a light plea to those folks so they went to trial. And were convicted. And appealed.

And earlier this year the US Supreme Court tossed out the 'honest services" convictions of the Enron CEO (Skilling) saying the law was flawed and the DOJ's interpretation of the law was incorrect (the law should only be applied to bribery and kickbacks).

The DOJ's power to intimidate is real. But they are hardly the final say on how a law should be interpreted.

Skallagrim

Looky here, the non-gop is busy trying to seize websites again. How long will it take them to use similar tactics for online poker?

Anti-Piracy seizure bill


Sponsors include Orrin Hatch (R-Utah), Senate Judiciary Committee Chairman Patrick Leahy (D-Vermont), and committee members Herb Kohl (D-Wisconsin), Arlen Specter (D-Pennsylvania), Chuck Schumer (D-New York), Dick Durbin (D-Illinois), Sheldon Whitehouse (D-Rhode Island) and Amy Klobuchar (D-Minnesota). Sens. Evan Bayh (D-Indiana) and George Voinovich (R-Ohio) are also co-sponsors. All those D's stand for Democrat, in case you wondered. 8 D's & 2 R's.

Kentucky, anyone?

And lol at that bill. Epic fail waiting to happen. popcorn.gif

This is true, but it's also true that you can count the number of times this has happened in two and a quarter centuries of American history on your fingers and toes. Usually, long-established DOJ interpretations hold up. (And, of course, even when they don't, all those people who were prosecuted or plea-bargained or cooperated with the government while "honest services" was the law can't unring the bell-- the government's power was still immense and changed lives.)

I can't read minds, but I suspect that the DOJ's attitude about online poker probably arose not out of any particular animosity for poker players over the internet but because two of the great headaches of federal prosecutors dating back generations are the mafia and money laundering. And here's why this would explain a lot:

1. The Wire Act was originally passed to try and wrest control of gambling away from the mob. The mob ran numbers rackets, made book on sports and horse races (in the 1960's, bear in mind, there was no interstate horse racing simulcasting and it was very hard to bet on sports legally), and ran some illegal casino games as well (there's a reason there's a song in Guys And Dolls, composed in the 1950's, called "The Oldest Established Permanent Floating Crap Game in New York"). I don't have any firsthand information as to whether the mob ran any underground poker rooms, but it certainly wouldn't surprise me if they did.

Now, obviously, some of that gambling activity was conducted "live" and was outside the scope of the Wire Act. But by criminalizing anything that involved a bet being taken over a telephone line, the Wire Act made it possible to go after bookies and numbers rackateers who took their bets over the phone. So it really did get at a significant part of the problem. And state laws generally covered other gambling-related things that gangsters did "live" rather than over phone lines.

Because the Wire Act has a pretty central role in going after organized crime, which has been a big DOJ priority for 50 years, I can see them not wanting to see it narrowed in any way. Again, it isn't so much that they are scared to death of Full Tilt Poker, but that they want to be able to, for instance, prosecute a bookie who takes bets over a computer network instead of a telephone, and if a gambling syndicate is involved in poker or other arguably "skill"-type games, they don't want an interpretation that takes away their ability to use the Wire Act to prosecute.

And then, you combine with that the fact that there are a lot of folks in Congress who certainly DO hate online gambling and even online poker specifically, who are probably calling over and talking to AUSA's and pressuring them to push forward on this issue. Meanwhile, the poker sites themselves are offshore and have less lobbying clout, the PPA notwithstanding.

2. You have to understand that every poker site functions as a sort of an offshore bank. They take deposits, make withdrawals, issue checks, accept and initiate wire transfers, process payments, etc. EVERY organization that has this structure is probably going to concern the DOJ. The reason is we have all sorts of "know your customer" rules that domestic banks have to follow to prevent money laundering. When you deposit a lot of cash, or you structure your deposits, or you have money coming in or going out to suspicious places, your bank is required to notify the government and file suspicious activity reports, which can trigger government investigations.

And while offshore banks are not regulated to the extent DOJ would like, they are also regulated a lot more than they used to be. Even Switzerland has started to provide formerly secret information about accountholders to the US for criminal and tax investigations.

I suspect that to someone in the money laundering unit of the DOJ, a company that cycles a few billion dollars through its coffers every year, and which maintains accounts for tens of thousands of depositors, is a very dangerous institution. And, by the way, Stars, Tilt, and other poker sites are keenly aware of this issue, which is why you sometimes see threads in Internet Poker about people being kicked off sites or getting their money tied up when there's a possibility of laundering.

So there's got to be a constituency within parts of the DOJ for using every tool at their disposal to shut down large online poker operations because of the possibility that they could be used for money laundering.

And by the way, in this respect, I am willing to bet that the Absolute Poker / Ultimate Bet scandal made things worse. One of the things that happened there is that the superusers were able to circumvent the companies' controls against money laundering and withdraw pretty large sums of money ($70,000 or so at a time) while bypassing corporate security measures. Well, you can imagine what a DOJ lawyer would think about this sort of thing.

In other words, even though there is no evidence that online poker sites are a center of money laundering operations, our banking system is premised on the idea that you need close regulation of banks and shadow banking institutions to prevent criminals from moving their money around without detection. The DOJ is going to try to make life miserable for any unregulated / insufficiently regulated offshore depository institution that is moving the kinds of sums that Stars and Tilt (and to a lesser extent other poker sites) are.

Very informative post lawdude. Thanks for taking the time to write all that.

+1

Dude, what are you talking about?

Also +1 to Obama owns this. We can debate whether things would be better or worse under McCain, but the facts are the Obama DOJ continues to prosecute online poker.

There is a shred of fact to the use of poker sites for money laundering for terrorists. There was a case where a poker site caught some suspicious activity. The site cooperated with British authorities and nailed the perps.

However, there are also many more cases of money laundering that occurs every day in the regular banking system. It is a red herring to say that poker sites are more complicit than the regular banking system.

At this time, it is Obama's DoJ. However, Obama can not just interfere or halt an ongoing prosecution. Once an AG is confirmed, they have considerable prosecutorial discretion. Obama did not clean out the DoJ when he had his chance, which is a mistake that Bush made, too.

The average person does not understand these issues and simply blames Obama for the DoJ's prosecution of such things as MMJ, raw milk, porn and other Bush era holdovers.

Right, so since he didnt he has to own their actions IMO.

In a way, yes. It puzzled me when he elected not to do what needed to be done when he had the chance. Many of the irritating policies that were pinned on Bush were a result of his DoJ and not his overt action. People react to the DoJ as if it were the policy making arm of the government, which it is not.

Perception is sometimes reality. While Congress or the POTUS could legislatively or administratively contradict the DoJ, on issues that may cost them votes, they rarely act.

It seems pretty clear that you do not practice either criminal or civil rights law. I could use up my "fingers and toes" counting the number of times the Supreme Court has disagreed with the DOJ in just the last 5-15 years (depending on how big the disagreement has to be). If I could use the Warren Court era, I could exceed 20 such reversals in probably a cherry picked 3 year period.

Look, no one says beating the DOJ is easy. But neither should anyone say its impossible, rare or even improbable.

The main reason it does not happen MORE, in my opinion, is similar to what you put in your second post on this page - for most defendants the cost-benefit analysis of trial versus plea bargain is heavily weighted on the side of the plea bargain. The system is indeed structured to have that bias. But it is still a bias, and exceptions will occur (and do frequently).

Skallagrim

I agree with this. But DOJ prosecutors have a certain worldview about money laundering issues, and are probably suspicious of any institution that operates as a sort of shadow online bank. Also, bear in mind that we have a tradition (which has very good reasons behind it) of discouraging our political leaders from interfering in prosecutorial decisions. So this attitude is likely to persist no matter who is President.