Home > Gambling News > US Gambling Legislation Sneaked into Defense Act

Gambling Article

US Gambling Legislation Sneaked into Defense Act

On September 30, 2006, the US Congress passed an act on Internet gambling that had been attached to an unrelated Department of Defense report called the SAFE Port Act. The Poker Player’s Alliance and other interested parties now hope that poker will be exempted from this legislation, given that it is a game of skill rather than gambling.

In a very late stage of the process of passing the SAFE Port Act designed to enhance US port security expected to be signed by the president of the United States, the Internet gambling act was attached as a rider - a method deemed "not germane" by some members of the senate. The law aims at prohibiting banks and other financial companies from making payments to online gaming websites. A list of those sites is to be drafted within nine months by the Attorney General’s office.

Though a definite hinder to the online gambling industry, it is considered as unclear what sort of gambling actually falls under the prohibition, since it fails to expand the reach of the Wire Act. While Internet sports betting is clearly barred by the federal Wire Act, there is some doubt whether online poker falls under the same prohibition.

Nevertheless, offshore online gambling companies are already taking measures to stay out of trouble with US legislation. PartyGaming Inc., operator of PartyPoker, the biggest of all online poker rooms, has suspended cash deposits from US players until further notice. No small adjustment, seeing that US players make up about 70% of PartyPoker’s player base.

"This development is a significant setback for our company, our shareholders, our players and our industry," said Mitch Garber, chief executive of PartyGaming Ltd.

Shares of PartyGaming, based in Gibraltar, lost 58% in Monday's trading in London, while shares of Neteller, a British payment processing company based on the Isle of Man, fell more than 60%.

"We are immediately working on [the behalf of poker players] to obtain an exemption for Poker prior to the financial enforcement provisions are finalized" said Michael Bolcerek, President of the Poker Players Alliance.

"The exemptions included in the "Prohibition" are for wagering on Horseracing, Intrastate Lotteries, Intrastate Gaming (where legal), Indian Reservations, and playing Fantasy Sports, but nothing yet for Poker. This must change."

"The Poker Players Alliance will renew its fight to obtain separate treatment for a great game of skill, poker, and a community game. In the next several months, this will be our focus, to ensure that Poker is protected from this outrageous intrusion into the lives of 70 Million poker players. Long term we seek to have Poker affirmatively legalized, on a Federal level. You have our commitment on this" said Michael Bolcerek.