Saturday, April 16, 2011

Those Americans Are At It Again

You've probably seen the headlines from major news services where the FBI shut down three "illegal" internet poker sites yesterday and stated that they were committing bank fraud and money laundering.
For those who didn't actually read the stories, here's what happened.
All the FBI has actually accomplished is to arrest three US Citizens and to seize five internet domain names.  The sites are still up and running for the rest of the world.
As for the rest of the story:

  1. The three companies are legitimate online poker sites with customers from all over the world.
  2. The three companies are ALL hosted and run in other countries by foreign corporations and were in full compliance with the laws of their countries.  The countries involved are the Isle of Man (home of the famous TT races), Ireland and Costa Rica.  One is even licensed by the Canadian Kahnawake Gaming Commission.
  3. The FBI has issued orders to 14 countries to seize ~$3 Billion held in accounts there (and presumably turn the money over to the US Treasury.)
  4. The FBI has asked their foreign countries to arrest eight of their citizens (who have not broken any laws in their countries) and to presumably ship them to New York for trial.
  • The "illegal gambling" was because since 2006, it is illegal in the United States for a US Citizen to play poker online.  (Rather than stopping United States IP addresses from being able to get to the foreign sites, much like China does with sites of which it doesn't approve, the FBI has chosen to go after the companies themselves.)
  • The "bank fraud" charges stem from the companies having set up other companies to sell things like golf balls, as many credit card companies will no longer handle charges from gambling companies.  This happens in Europe as well as the US.  When you buy the "golf balls" you also "happen" to get the same value in chips at the poker sites.  BTW, this same method is used by Adult internet sites as a number of credit card companies will no longer handle charges to Adult sites as well.
  • The "money laundering" is from the foreign companies actually receiving money from US poker players and depositing it in foreign bank accounts.  Hell, if I had a company in Ireland, I'd most likely do my banking there as well.
Now... besides the fact that the FBI is telling foreign nations to arrest people who have broken no laws in those countries, another part that bothers me is the requested seizure of ~$3 Billion.  They would be seizing money belong to Canadians, Irish, Germans, English, Italians, etc. as well as US Citizens.
Finally, though my memory is faulty enough that I can't currently remember the case, I seem to remember that last year, a foreign country objected to a US based website and wanted our government to shut it down.  Our government's response was to "suck eggs, it is legal here."
Now that the shoe is on the other foot, I think that should be the response of those fourteen countries to the FBI.
Would this happen to have anything to do with trying to eliminate the competition for Iowa, Florida, California and Nevada which are working to legalize online poker based in those states?
Note: I subscribe to Press Display, a web, iPhone/iPod Touch/iPad, news site that offers over 1,700 newspapers from 92 counties in their full original format (and in 48 languages) and does it for less than the cost of my local newspaper subscription. (The Las Vegas Review Journal is also one of the papers that they carry.)  What is neat about this, is that most of the foreign newspapers either ignored this story or have taken the stance that, "Those Americans are at it again".
BBC NewsCNNFBI Press ReleaseThe RegisterUSA Today
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