Defeated

The bad news is in, and that is that the vote on H.R. 5767 has been defeated in the House Financial Services Committee.

Bummer.

So it looks like America - and by extention the world - is stuck with the useless, unworkable piece of crap that is the UIGEA.

Looking back, I am a little surprised at the strategy of bringing the matter to a vote right now. The Bill appeared to be gathering momentum and co-sponsors, so it would have seemed better to wait a bit longer and let the momentum build.

Either way, it is a sad day when legislators feel it is their duty to put the onus of enforcing laws on financial institutions, rather than actual law enforcement officials.

It is also a sad day for horse racing fans too, since I would imagine that a natural backlash by banks will be to block ALL online gambling transactions, including legal horse racing bets.

However, if there is a light at the end of the tunnel, it is that this matter has illuminated our newest enemy, and he is Rep. Spencer Bachus of Alabama.

Bachus has been quoted as saying, "The banks have decided that this is a financial burden. We have decided, on the other hand, that our children are worth protecting."

That kind of backwards, self-serving, non-logic of using a non-problem (children gambling online) to justify supporting a bad  ideological law shows that this clown considers himself to be the self-appointed moral authority for the entire nation.

We'll be re... [More]

Antigua dispute takes a mulligan

Question: What do you call a deadline that keeps being re-scheduled?

Answer: A waste of time.

The negotiators between Antigua and America must be using Vonage for their discussions, because there appears to be an echo somewhere.

For the second time this month, Antigua and America have re-set the deadline for a resolution in their ongoing gambling dispute.

The next deadline is set for Friday, July 11. The following deadline will be announced shortly thereafter.

This whole exercise is starting to sound like an elaborate attempt by government officials to use up as many frequent flyer miles as possible before they expire.

Lawmakers to vote on suspending the UIGEA

Things are about to get very interesting on the Hill.

Tomorrow, June 24, should see a scheduled vote by the US House Committee on Financial Services regarding H.R. 5767. Specifically, that bill is  Barney Frank's legislation to effectively suspend the UIGEA from ever being enforced.

So, what does this mean?

Well, Democrat Barney Frank sponsored the bill and is also the Chairman of the Committee, so that's a good sign. The bill was co-sponsored by Republican presidential candidate Ron Paul, who also sits on the committee - another good sign. As well, the number of Democrats on the committee outnumbers the Republicans.

So, all things considered, one would have to think that this bill has a pretty good chance of passing through this vote.

But what then?

That's when things get cloudy because this vote, for all the promise it brings for the dismissal of the UIGEA, is really pretty preliminary. A positive vote by a committee, even a committee as powerful as this one, is by no means a guarantee that a bill will become law.

Many a bill has been passed by House co... [More]

Deadline looms for US to respond to EU inquiries

Today, June 23, is the day.

A few weeks ago, the European Commission sent a questionnaire to a number of US government agencies, basically asking them to clarify and/or justify their position of persecuting and prosecuting foreign online gambling companies.

Those American agencies were given until today to respond.

Now, given America's track record of meeting deadlines with regard to online gambling disputes, I fear that participation in the questionnaire by all requested American government agencies will be somewhat less than 100%.

That being said, the EU is a much larger and more meaningful trading partner than tiny Antigua, so hopefully the American agencies will move a bit to cooperate with the EU requests.

Really, any failure by the Americans to respond to this polite questionnaire could (and should) be viewed as a blatant insult. It would be the equivalent of saying, "Yeah, we know you are pissed about what we are doing, but we don't want to talk about it. So what are you gonna do about that?"

Hopefully, America does the right thing in this matter - for once.

The UK is waking up

The Times Online posted a great column today by Anthony Julius, in which he vents his frustration over the one-sided relationship that has developed between America and Britain.

Of particular note to Julius is the American activities following the passage of the UIGEA.?

"The US nevertheless continues to act against those who withdrew from the market in 2006, while US businesses still operate in America free of interference or the risk of prosecution. The US seems untroubled by WTO findings. Nor is it deterred by an EU investigation into its discriminatory legislation and its violation of international trade principles. Remarkably, US companies are developing equivalent businesses in the UK and elsewhere in Europe on equal terms with UK and European businesses."

Really, what more can be said about America's actions?

They want it every way. Not only do they want to stop other companies from marketing their services in America in accordance to international law, but they expect other countries to allow American companies to market those same services elsewhere.

Amazing.

Betbrokers is broken

The London Evening Standard is reporting today that Betbrokers "warned today that trading has collapsed because it doesn't have enough money to service its biggest punters."

That pretty much says it all.

If you have never heard about Betbrokers, they are a publicly traded company in the UK that appears to have a unique business model. They describe themselves as a retail and wholesale brokerage and clearing house for the sports betting industry.

But what does that mean? Well, ideally, they would work like a regular stock broker but for sports bets. You give them your money, and they would try to find the best bets at the best prices from 200 different bookmakers.

But this isn't an ideal world. What looks like a brokerage to the press, looks an awful lot like a betting syndicate to a bookie.

For those unaware, a betting syndicate is a group of gamblers that pool their money to make larger bets. A syndicate's real advantage comes when they can manipulate the odds on games by placing one-sided bets on games and force unsuspecting bookies to move the line - at which time the syndicate will bounce back onto the other (preferred) side with a larger bet.

Syndicates can bankrupt small bookmakers, which is why so many online books have small limits. Bookies aren't afr... [More]

The world is watching the Antigua gambling dispute

As predicted last week, the deadline for a settlement in the US / Antigua gambling dispute passed without any kind of resolution.

According to the Antigua Sun, while both sides seem to be agreeable to continue discussions, it doesn't really appear that they are anywhere close to an agreement.

As Antigua's attorney, Mark Mendel, says, "Although there is a willingness to talk, I think we are quite far off from an agreement."

So, it looks like I can stick to the other prediction I made last week, when I said that this dispute will not get settled until Dubya gets out of the White House.

The real interesting twist on this story is how the  implications of this dispute are starting to take on a life of their own.

The legal journal, Daily Report, today published a great analysis of the legal issues surrounding this dispute, and outlined how this originally insignificant little tiff might actually turn out to be one of the most significant and meaningful trade di... [More]

The war on gambling is failing

This story from the St. Petersburg Times caught my eye today.

Apparently, a storefront Internet center was shut down a month or so ago [why is this only breaking now?] because it was effectively operating as an online casino.

According to the article, "patrons paid money upon entry and were able to load the money value onto a magnetic card, then given access to the computers... Patrons then slid the magnetic cards through a reader to start a gambling session, placing bets on poker and keno, or slot games, through the Internet".

If this sounds like a Kinkos to you, don't worry, this is where it gets good.

The key to this crime is that the center paid cash payouts to people who won online.

This reminds me a lot of a common situation that used to happen 15-20 years ago when bar owners would frequently honor the customers' winnings when they played the video poker games. Of course, that crime was eliminated when many jurisdictions started cashing in themselves by licensing VLTs.

In fact, it is a nearly identical situation, with the only difference that people are playing online.

The government can stop crimes like these - and cash in financially - by simply legalizing online gambling and regulating it.

US, Antigua to miss another settlement deadline

The Canadian Press reported late yesterday that America and Antigua will once again fail to reach a settlement in their gambling dispute before the latest deadline of June 6.

According to the article, Antigua's legal representative, Mark Mandel, is quoted as saying, "I don't think there is any chance of an agreement by [Friday]".

It's hard to argue with that statement. He should know.

I'm not really all that disturbed by this latest setback, since the June 6 deadline was just the latest in a series of self-imposed deadlines that have all been missed. I am certain both sides will agree to push the deadline forward to another future arbitrary date - let's say August 15th - which will also be missed.

Looking into my crystal ball, I see the following sequence of events panning out...

After the next missed deadline, both sides will agree that the looming elections in America will sufficiently muddify the environment for negotiations to the point that the deadline will have to be pushed back once again until sometime in early 2009.

Which is most likely exactly what the American trade representatives want... to delay the negoti... [More]

The latest evil... free gambling

Maybe it is just me, but I got a kick out of this story coming from AP via OregonLive.com.

The premise of the article is that Oregon youths are in grave danger because they like to play at free online gambling sites.

That's right. They are playing free games, not with real money. And this is bad.

But it gets even worse apparently, because the article goes on to mention that less than one percent of Oregon youths actually gamble with real money.

Now, far be it for me to make light of the fact that some underage minors are gambling online for money. Yes, that shouldn't be happening.

And I can almost agree with the premise that kids who enjoy playing online would naturally be interested in playing for real.

But let's not get stupid here, because the facts of this study actually show that the opposite is happening. Maybe one-third of the youths are trying out the free games, but less than one percent are moving to the next level and playing with cash.

If somebody told me that less than one percent of the youths in Oregon were gambling, I would congratulate the state for doing something right.

Only a few weeks ago, I ... [More]

Party Poker's billion dollar bribe

The NY Post reported over the weekend that there is billion dollar bribe offer on the table between the Department of Justice and PartyGaming Plc to buy Party out of trouble for its previous history of accepting wagers online prior to the passage of the UIGEA in 2006.

Is it just me that finds this story completely wrong on so many levels?

Where do I start?

If online gambling wasn't officially illegal before 1996, then why should Party have to pay anything?

If indeed it WAS illegal, then why should Party be able to buy itself out of jail when nobody else has been allowed this treatment?

Were they even charged with anything, or is this just a billion dollar shakedown by the American government?

Why would Party even care to make this deal if they weren't given assurances that they would eventually be allowed back into the American market somehow - even if it is some kind of merger? So exactly what circumstances are going to change, and when?

If Party pays this price, are both sides setting a legal precedent for every "illegal" operation to potentially buy their way out of jail?

Was BetOnSports offered a similar deal before the founders were arrested? If not, why not?

This whole situation reeks of the worst kind of rule-bending that can only happen when the American gove... [More]

Another scandal rocks online poker

The Absolute Poker scandal mostly flew under the mainstream media's radar last year, but as the old saying goes, "Fool me once, shame on you. Fool me twice, shame on me." Maybe George W. Bush can't get that cliche correct, but if he played online poker he would definitely understand it's meaning right around now.

The news is now official as UltimateBet has admitted that it has suffered its own cheating scandal.

And this time, the mainstream press is noticing. Canada's National Post newspaper is already on top of the story.

A media organization with an already conservative bent, on Saturday the Post published a stark story about the state of security inside the poker world, with an article titled Native policing of gambling in doubt after online cheating.

And while I'm generally loathe to agree with conservative views of online gambling, I'm having a hard time disagreeing with the premise of the article, which questions whether the Kahnawake reserve has the balls to properly regulate the gaming companies under its watch.

Right now, it looks like it doesn't.

The Kahnawake Gaming Commission has to realize how this looks from the outside. We are living in a world where the very existence of the online gambling industr... [More]