The bill sponsored by state Sen. Raymond Lesniak, D-Union, specifically would allow “New Jersey residents to place wagers on casino games via the Internet,” according to the text of the legislation.

All games, including poker, would be offered through Internet wagering, the bill states.

In addition, the bill would require that the equipment used to operate the Internet wagering be located in a restricted area of a casino hotel or in a secure facility off the premises of the casino hotel, “but within the territorial limits of Atlantic County.”

The bill comes with an annual tax of 20 percent on gross revenue from Internet wagering, which would be paid into a casino revenue fund. It also provides for the creation of a Division of Internet Wagering under the direction of the state Casino Control Commission.

Additionally, the Casino Control Commission and the New Jersey Racing Commission would allow the operation of terminals at racetracks at which “individuals who have registered to participate in Internet wagering may wager on games conducted at casinos in Atlantic City.”

Those terminals would be identical in appearance to casino slot machines.

The full text of the proposed legislation, S3167, “Permits Internet wagering at Atlantic City casinos under certain circumstances,” is available here.

Source: http://www.pressofatlanticcity.com/news/breaking/article_dfdd5dcc-0375-11df-b557-001cc4c002e0.html

Similar legislation failed in the last Congress. Frank, a Massachusetts Democrat, has support for the bill from such companies as Youbet.com Inc., and Harrah’s Entertainment Inc., in addition to the Poker Players Alliance, formed to overturn a 2006 ban on Internet poker.

Supporters “have been mobilizing,” Frank said last week. “This is a grass-roots thing.”

The legislation would allow licensed gambling operators to accept online wagers from people in the United States. The bill would revise the 2006 law, which made it a crime for banks to process financial transactions used to place illegal bets online.

Harrah’s vice president Jan Jones said regulating and taxing online gambling might swell government coffers by $2 billion to $6 billion annually. “At a time where there is no money, that can be going to healthcare or S-CHIP,” the children’s insurance program, Jones said.

St. Paul resident Chris Wallace said he makes about $2,000 a week playing poker online, enough to support himself, his fiancée and his dog. He’s not about to stop, even as Minnesota officials take new steps to try to crack down on online gambling.

“I have e-mailed the Justice Department, and I’ve volunteered to be arrested,” said Wallace, 35, who left college because online poker was taking up so much of his time. “I play online poker. Come and get it.”

The state of Minnesota wants to do just that. A division of the state Department of Public Safety that enforces gambling and alcohol laws said Wednesday that it has instructed 11 national and regional telephone and Internet service providers (ISPs) to block access by all Minnesota-based computers to nearly 200 gambling websites.

Minnesota, citing a 1961 federal anti-gambling law, says all online gambling within its borders is illegal, even if the games are hosted outside the United States.

“We are putting site operators and Minnesota online gamblers on notice and in advance,” says John Willems, director of the state’s Alcohol and Gambling Enforcement Division. “State residents with online escrow accounts should be aware that access to their accounts may be jeopardized and their funds in peril.”

Full story at: startribune.com

The unanimous decision by three judges of division I of the appeals court says that Rousso would have to show that policing Internet poker imposes excessive burdens and not worth the state’s commitment to regulating gaming.

“Ultimately, given the importance of the state’s interest in protecting its citizens from the ills associated with gambling, and the relatively small cost imposed on out-of-state businesses by complying…Rousso has failed to meet his burden….”

Rousso said appeals court rejected many of the state’s arguments in the case, so he is leaning in favor of taking the case to the state Supreme Court…

While in New Jersey, a group representing gaming and horse-racing industries in New Jersey filed a lawsuit on Monday seeking to overturn a federal law that bans sports betting in New Jersey and most other U.S. states.

The suit filed against the federal government claims the Professional and Amateur Sports Protection Act of 1992 violates five amendments to the U.S. Constitution by discriminating against the people of New Jersey and by regulating a matter that should be reserved to the states.

Gaming is an important industry in New Jersey, with 11 casinos located in Atlantic City. New Jersey Governor Jon Corzine told reporters the initiative to legalize sports betting was “worth pursuing” and would boost Atlantic City if it happened.

The sat particularly badly with the island nation of Antigua, which complained to the WTO over what it saw as discriminatory trade practices. The WTO agreed and ruled against the United States back in April of 2007—a fact the US has more-or-less ignored. Gambling laws have always been a patchwork of contradictions; the federal government prohibits gambling across state lines but allows states to set their own laws when it comes to intra-state betting. Many states have laws that favor particular types of gaming over others; Kentucky has gone so far as to try to seize control of online gambling sites and makes no secret of its stance on horse racing. Taken as a whole, the US policy of simultaneously condemning and supporting gambling is uglier than the hypothetical love child of Janet Reno and Alan Greenspan.

The Bush Administration settled the initial Antigua complaint by offering the country concessions in other trade-related areas, but multiple European countries remain angry; the UK-based Remote Gambling Association has claimed that the US Department of Justice (DOJ) has discriminantly targeted certain websites while ignoring the operations of others. The European Commission reportedly plans to file its own complaint with the WTO. In the face of international bad feeling and an uncertain positive impact at home, it may be time for the UIGEA to fold its hand.

Source: http://arstechnica.com

“The bill introduction should happen in the next month,” a spokesman for House of Representatives Financial Services Committee Chairman Barney Frank said.

On Thursday, Reuters reported the EU could file a complaint about U.S. enforcement of the gambling ban at the World Trade Organization.

“Mr. Frank will bring back legislation to repeal the UIGEA (Unlawful Internet Gambling Enforcement Act),” the spokesman said, referring to a Republican-crafted bill passed in 2006 when the party controlled Congress and the White House.

Supporters of the ban argued offshore Internet gambling websites take billions of dollars out the U.S. economy, damage families and serve as vehicles for money laundering.

The law cost Europe’s online gambling companies billions in lost market value as they were forced to retreat from one of their most lucrative markets. It barred businesses from knowingly accepting payments in connection with unlawful Internet gambling, including payments made through credit cards, electronic fund transfers and checks.

Against Frank’s advice, the Bush administration finalized regulations late last year to implement the ban and gave companies until December 1 to comply.

Frank said the rules would burden the financial service industry at a time of economic crisis.

Many publicly traded European companies, including PartyGaming and 888.com, withdrew from the United States after Congress passed the ban, but they face possible criminal prosecution for activities before then.

Anurag Dikshit, a founder of PartyGaming, pleaded guilty in December to Internet gambling charges and agreed to pay $300 million in fines. He still faces possible jail time under a deferred sentencing arrangement. Other PartyGaming founders have not settled with the U.S. Justice Department.

EU industry officials said the pressure on Dikshit to make a deal showed the Justice Department had crossed a major line in its prosecution of cases.

The European Commission, acting on industry petition, began a formal investigation in March into whether Washington was singling out EU companies for enforcement actions while allowing U.S. online firms to operate freely.

Sources familiar with that investigation told Reuters in Brussels on Thursday they expect the investigators’ report, initially due last year, to recommend action at the WTO when it is released next month.

Rather than move immediately to litigation, EU officials would use the report as leverage to seek a negotiated solution with the United States, they said.

U.S. Sen. John E. Sununu complained a year ago that the law was ambiguous and was grabbing legitimate enterprises in its net. He warned that “risk-averse financial institutions will simply choose to block every transaction that may be interpreted or could resemble gambling, whether legal or not.”

Lottery Executive Director Rick Wisler said the problem is definitely affecting lottery sales here, which are down significantly. He said his concerns have been made known to Visa and MasterCard and that those companies say they will review them.

The problem seems to have spread beyond Internet lottery sales. We have been told that even employees at state liquor stores have declined to allow lottery ticket purchases using a bank-issued debit card.

Gambling proponents often cite the New Hampshire Lottery as a viable and reliable generator of public revenues and an example of why it should expand. But if even the sale of a scratch ticket is going to be thwarted by the feds, how do they expect bigger gambling to succeed?

Observers say it’s a landmark moment for online gambling.

Growing hostility of the US authorities to online gaming led in February last year to internet payment processing giant Neteller withdrawing from the States after a nationwide crackdown saw the FBI freeze funds held in customer account.

Funds were subsequently released under a deal reached with the US Attorney’s office.

The guilty plea of the co-founder of PartyGaming in New York’s federal court last week is a move that doesn’t directly affect e-gaming businesses that have set up here, many of whom are targeting the European and Asian rather than the US markets.

For them, it’s business as usual although they are monitoring developments closely.

Paul Telford, head of legal services at Poker Stars, insisted: ‘As far as we are concerned it’s biggest as usual.

‘It doesn’t affect the company. This doesn’t change the law, no precedents have been set.

‘But it will give us food for thought as to the bigger impact. The situation is very fluid so there is little point in commenting further.’

Garth Kimber, head of e-gaming development at the Department of Trade and Industry, said: ‘We are monitoring the situation closely to look at any potential impact.’

Meanwhile, delegates to a seminar held in Douglas heard that e-gaming is well-placed to ride out global recession.

Thirty people attended the event organised by Global Betting and Gaming Consultants Ltd on December 3 at the Claremont Hotel in Douglas, including representatives from the Department of Trade and Industry.

Chief executive Warwick Bartlett told delegates: ‘GBGC is constantly being asked how the recession was likely to affect e-gaming. A question difficult to answer as there is no comparable data.

‘Gambling benefits from not being a big ticket item, whereas people will stop spending on cars and moving house they will continue to have a pint and have a bet.

‘The global roll out of broadband is also assisting the growth of internet gambling. So it is far more resilient than the traditional land-based betting shop or casino.’

He emphasised that while the Isle of Man had done well from financial services, it was not beneficial to be too reliant on one business sector and it was in everyone’s interest to promote the Island as an e-gaming centre.

GBGC was instrumental in setting up Malta as an e-gaming centre.

Attorneys for a trade association for the gambling web sites countered that Kentucky lacks the authority to make that move because the domain names aren’t property and, besides, they are based offshore and beyond Kentucky’s jurisdiction.

A three-judge appeals court panel in Kentucky is now weighing whether a state can seized a web site domain name to curtail gambling within its borders, even if it means cutting the rest of the world off from the site.

The question arose after Franklin County Circuit Court Judge Thomas Wingate ruled in October that the state’s lawsuit seeking to block Kentuckians’ access to more than 140 online casinos could go forward. Wingate also ruled that he planned to hold a hearing about whether the state could seize the web sites.

The hearing has not been held pending the outcome of the appeal heard Friday.

The state sued the web sites after determining that they allowed Kentuckians to gamble illegally and asked a judge to either force the sites to block Kentucky users or allow the state to take possession of the domain names. Kentucky already allows gambling on horse racing and bingo and has a state lottery.

Attorneys for the state and the web sites estimated that about 13,000 people in Kentucky use the online casinos.

William Johnson, who represents five of the web sites, said Kentucky’s laws do not spell out that the state can seize domain names. Because lawmakers haven’t acted since the law was written in 1974, the state lacks the authority to seize the web sites and shut them down, Johnson said.

“If they had wanted to correct this law, they could have done so annually,” Johnson said. “That is a matter for the legislature to decide.”

Attorney Jon L. Fleischaker, who represents Interactive Media Entertainment and Gaming Association, Inc., an online gambling trade association, said that by trying to seize the web sites, Kentucky was aiming to apply a criminal penalty to a civil proceeding.

“What they have done is turn the law on its head,” Fleischaker said. “If they want to bring a criminal case, they should bring a criminal case.”

Eric Lycan, who represented the Kentucky Justice Cabinet, referred to the online gambling sites as a “massive, global, offshore criminal enterprise” whose owners know they are violating the laws of nearly every state in the country by fostering gambling via the Internet.

More than 80 percent of the revenue generated by the web sites comes from the United States, giving any state willing to try jurisdiction over the sites, Lycan said.

“They are doing this because they don’t think anyone can catch them,” Lycan said.

Judge Michelle Keller asked Lycan why the state doesn’t handle the illegal gambling the same way it handles illegal drug transactions — by making both the sale, purchase and use of the drugs against the law.

“It’s illegal to sell the drugs and it is also illegal to use the drug,” Keller said. “I don’t see much of a difference here.”

Lycan said the decision to only criminalize the offering of gambling was a decision made by lawmakers.

“The legislature specifically exempted the player from the legislation,” Lycan said.

The results of the four-month investigation by 60 Minutes correspondent Steve Kroft, producer Ira Rosen and The Washington Post’s two-time Pulitzer Prize-winning reporter Gilbert Gaul will appear this Sunday, Nov. 30, at 7 p.m. ET/PT on 60 Minutes.

“He was raising, just really, really bad hands against very good hands. He seemed to play crazy,” says Todd Witteles, a computer scientist turned poker player who believed he was losing too much to the same person. “It seemed like he was giving his money away. Except the only thing was, he wasn’t losing. He was playing in a style that was sure to lose, but he was killing the game day after day,” Witteles, who played a key detective role, remembers.

Michael Josem, a player and a computer security expert, plotted the odds of such consistent success. “We did the mathematical analysis to find that they were winning at about 15 standard deviations above the mean…approximately equivalent to winning a one-in-a-million jackpot six consecutive times.”

The cheating, which netted the cheaters more than $20 million, occurred on two of the Internet’s most popular sites, Absolute Poker and Ultimate Bet. The two sites operate out of a shopping mall in Costa Rica and run their games on computer servers housed on an Indian reservation outside of Montreal. They are licensed by a Mohawk tribe that has no background in casino gambling, a tribe that previously made the majority of its money selling tax-free tobacco. Though such gambling is illegal in both Canada and the U.S., the betting laws in those countries have no jurisdiction on the sovereign reservation.