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Vip.com online poker room has picked out specific states in America and said they won’t be able to play on the site in response to the new law recently signed into being by President Bush. Michigan, Illinois, Louisiana, Oregon, Wisconsin, Washington, Indiana, Nevada, New York, New Jersey, and South Dakota are the states, and residents in those eleven places will not be able to reach VIP.com poker site. These specific states have legislation that bans online gambling. This along with the new law is a strong enough situation to call for Microgaming to shut down access.

In the past couple of days, I’ve been dong a bit of research and thinking. However limited my thinking may be on a subject upon which I am notoriously biased… I’ve been trying to come up with a solution, one way or the other. Not there yet.

Wouldn’t any enforcement be subject to the claim of discriminatory enforcement? That is, enforcing restrictions against one sort of entity and not another? For example, every casino has many many ATM and credit card machines placed there for the precise purpose of getting money to gamble. The banks of origin of the various cards are often out-of-state, as are the folks using them. There seems to be little or no difference between getting money to use at a legal casino in, say, Nevada and getting money to use at a legal online gaming site based in, say, Antigua. There is still the interstate/iinternational access to money. Taking this argument to its logical extension, it would also be illegal to accept money for betting that has crossed interstate lines in any fashion. It starts getting absurd. If one further extends this rationale to lotteries, state paramutuel betting, etc., it becomes untenable.

The key seems to be to educate a majority of Congressmen and Senators. First of all, educate them to understand that poker is not a problem activity. It is entertainment, and, for some, a livelihood. It is no more subject to abuse (and is no doubt much less subject to abuse) than alcohol and smoking, and is far less damaging to health and welfare. Rather than an “immoral” enterprise, it can be entrepreneurial and invigorating. A game of skill, played against other players, not against house odds. A game one can study for and improve upon one’s skills. They need to rethink the “immorality” issue. We cannot let them continue to go with the easy knee-jerk reaction that poker must be bad.

Then educate them about the revenues involved. In a country that has been adding to the national debt by leaps and bounds, online poker has the potential, if licensed, regulated and taxed, to be a terrific source of revenue. Perhaps it would be possible to simply permit already existing casinos and similar state-owned enterprises to link through to online sites, thus permitting their citizens to enjoy the great game of poker while, at the same time, substantially increasing monies coming into the state through licensing/taxing.

Finally educate them that regulation, not criminalization, is the key to avoiding money-laudering, fraud and preventing children from playing poker. Regulation and cooperation could help the police locate any terrorist and criminals who might be trying to launder money through such venues. Criminalization leads to subterfuge; regulation leads to openness.

The bill may be on its way to being signed into law. But laws can change. They can be revised, rewritten, rethought, overturned as knee-jerk reactions give way to a more considered approach.

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Monday brought a flood of action in response to the passage of Internet gaming legislation in the U. S. Congress late Friday evening. Some companies have come out already and stated that they will suspend American action from their sites (most notably PartyGaming and 888.com) while others have yet to decide what action to take. I was interested in the analysis of the issue from one of the finest legal minds on gambling when I contacted Professor I. Nelson Rose over the weekend.

Professor Rose is viewed as the foremost authority on gambling law. He has published several books on the subject, most notably his book from 1986 “Gambling and The Law”, and continues to write many articles regarding the subject. He also is a professor of law at Whittier Law School in California and has been involved both civil and criminal legal cases regarding gaming on both personal and industry wide levels. His views regarding the passage of the bill were quite eye opening and his thought processes very complete.

In an e-mail that I received from Professor Rose, he first took on the methods through which the bill was passed. “Would-be presidential candidate Sen. Bill Frist warped the law-making process to score a few points with his right-wing religious base,” he stated in the opening of our conversation. Professor Rose quickly moved on to his analysis of the bill by remarking, “The new law will be difficult to enforce. It only applies to “unlawful” gaming, but does not expand the reach of the main federal anti-gaming statute, the Wire Act. So, there are still going to be arguments that Internet poker, for example, is not unlawful.”

“The new crime on transferring money only applies to gambling businesses,” he continued. “Payment processors are not covered, unless prosecutors want to use theories of aiding and abetting. Treasury will make new regulations to require money transferors to identify and block funds from gambling sites. Banks will thus not be required to read paper checks.”

When looking at offshore payment processing houses, Professor Rose pointed out a very important factor. “Why should NETeller comply with U.S. regulations? The U.S. and state Attorneys General can get court orders preventing ISPs from hosting sites that transfer money, but NETeller is not hosted by a U.S. server. Foreign nations are not usually required to enforce U.S. injunctions.”

Professor Rose was also kind enough to send along his complete, line-by-line breakdown of the legislation as it appears in the Port Security bill that is awaiting President Bush’s action. You can visit Professor Rose’s website, gamblingandthelaw.com, to view the entire text and I certainly appreciate the time Professor Rose took to respond on this issue during his teachings overseas

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