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Eclipse please cut and paste text from the report. For security reasons (I wont download attachments I see posted online generally) and for those without Acrobat.
Internet Gambling Regulation and Enforcement Act of 2007
With the imminent possibility of the USA moving towards
regulation, Rushmore Casino together with Affibucks has
commissioned a legal opinion on the ramifications to our already
turbulent industry, should the bill come to pass.
Rushmore Casino is committed to becoming a leader in the online gaming industry, with unrivalled customer support and the fastest payouts to both players and affiliates.LEGAL OPINION
I. Subject of the opinion.
This legal opinion was prepared in order to present a bill by congressman Barney Frank in the United States of America (hereinafter “USA”), which concerns gambling provided in the Internet(hereinafter “internet gambling”) in the USA.II. The IGREA bill – basic information.
Congressman Barney Frank presented a bill, cited according to the provision of section 1. as the “Internet Gambling Regulation and Enforcement Act of 2007” (hereinafter “IGREA”). This bill was created in order to amend title 31 of the United States Code, to provide for the licensing of Internet gambling facilities by the Director of the Financial Crimes Enforcement Network
(hereinafter “the Director”), and for other purposes.
The United States Code (hereinafter “USC”) is the codification by subject matter of the general and permanent laws of the United States. It is divided by broad subjects into 50 titles and published by the Office of the Law Revision Counsel of the U.S. House of Representatives. Since
1926, the United States Code has been published every six years. In between editions, annual cumulative supplements are published in order to present the most current information. Section 2. of the IGREA, titled “Federal licensing requirement for internet gambling operators” stipulates the amendment of Chapter 53 of Title 31 of the USC by adding at the end of it the following subchapter: “Subchapter V – Regulation of lawful internet gambling” (hereinafter“Subchapter”).III. The IGREA bill – most relevant issues.
§ 5381.
In the beginning Congressional findings and purpose are described – i.e. that internet gambling is a $ 13,000,000,000 and growing industry worldwide, that it is a popular activity domestically,licensed or regulated in more than 50 countries providing billions of dollars in tax revenues, that the global gaming market grossed about $ 258,000,000,000 in 2005 which of 5% was from online
gaming and that 47% of all players are ones from North America, that licensing or regulating internet gambling is needed to provide appropriate protections against underage gambling, compulsory gambling, money laundering, fraud, that licensing or regulating internet gambling in
the USA would provide additional tax revenues to the budget and would reduce tax avoidance.§ 5382.
This paragraph has been added in order to describe the following definitions: Director (Director of the Financial Crimes Enforcement Network), Bet or Wager, Licensee (internet gambling operator licensed by the Director in accordance to this Subchapter), State, Internet, Sporting league, Operate an internet gambling facility (direction, management, supervision or control of an Internet site through which bets or wagers are placed or accepted), Indian lands and Indian tribe.§ 5383.
The next paragraph treats about the necessity of obtaining a license to for operating an internet gambling facility within the territory of the USA. Such license may be obtained by anyone who submits an application containing:
• A complete financial statement of the applicant;
• Documentation showing the corporate structure of the applicant and all related
businesses and affiliates;
• A certification that the applicant agrees to be subject to USA jurisdiction and all
applicable USA laws relating to internet gambling.
The Director shall evaluate the application and the applicant on the basis of such factors as he determines to be appropriate, i.e.:
• The financial condition of the applicant;
• The business experience and compliance with law provisions of the applicant;
• If the applicant is an individual – a background check to determine if the individual
has any criminal record;
• If the applicant is an entrepreneur – any other factors which may be relevant according to the Director.
Furthermore the assessments for administrative expenses for the Subchapter are made – mainly the budget shall consist of license fees evaluated and given for solely use to the Director. The expenses of the evaluation mentioned above shall be borne by the entity which applies for the
license. The appropriateness of the assessment is not reviewable. The user fee may not be deducted from amounts available as deposits to any placing a bet. The Director, at his sole discretion, shall grant licenses to entities which fulfill all of the abovementioned obligations and which are generally fit to engage in the business of internet gambling. A license will not be
granted to an entity which fails to provide:
• Appropriate safeguards to ensure that the individual placing a bet or wager is 18 years
of age or older;
• Appropriate safeguards to ensure that the individual placing a bet or wager is
physically located in a jurisdiction that permits internet gambling at the time the bet or
wager is placed;• Appropriate mechanisms to ensure that all taxes relating to internet gambling are
paid;
• Appropriate safeguards to combat fraud and money laundering as may be prescribed
by the Director;
• Appropriate safeguards to combat compulsive internet gambling;
• Appropriate safeguards to protect privacy and security of any person engaged in
Internet gambling;
• Appropriate mechanisms to ensure that all assessments are paid to the Director;
• Such other requirements as the Director may establish by regulation or order.
No license shall be granted to an individual who has been convicted in any other country for any criminal violation involving gambling laws, financial markets, money laundering etc. The above mentioned rules are applicable to business entities (persons who act on their behalf). A license is issued for a one year term. The license may be renewed. The license may be revoked
by the Director (his decision is a final action) in case:
• The licensee fails to comply with any provisions of the Subchapter;
• The licensee (or person acting on behalf of an entrepreneur in case of business entities) is convicted for crimes mentioned above.
The licensee must also fulfill all other demands prescribed by all other provisions of law.
Furthermore there are administrative provisions i.e. the Directors powers (examining documents, calling for hearing etc.) – among other, in case an entity fails to act accordingly to the Director’s decision, he may pass the case to the Attorney General who may ask the Court for help – in this
case the Court may force the entity to participate in a hearing before the Director. Refusal of fulfillment of the Courts decision may result in major consequences.§ 5384.
This paragraph is titled “Financial Institutions” and stipulates that an entity which was granted a
license may involve itself in financial activities (provided by banks and other financial institutions)
accordingly to the provisions of the Subchapter.§ 5385.
“Prohibition and limitation of licenses in States and Indian lands” is the title of this paragraph. It is stipulated that no internet gambling licensee may engage, under any license issued under the
Subchapter, in the business of internet betting or wagering in any State which prohibits such business within such State if the Governor of such State informs the Director of such prohibition
before the end of the 90-day period beginning on the date of the enactment of the IGREA. This obligation involves every type of internet gambling in every State. Any changes to State limitations after the end of the 90-day period mentioned above, shall apply with respect to the business of internet betting or wagering in such State by any licensee beginning on the first January 1st that occurs after the end of the 30-day period beginning on the later of noticing the Director (or other if the period was prescribed longer). The abovementioned remarks apply to the Indian Tribes and the Indian Chief.
The Director is obliged to undertake all necessary actions in order to ensure that all prohibitions and limitations of the licenses are respected.§ 5386.
This provision is titled “Sporting leagues may prohibit internet gambling on league activities”.The remarks made regarding § 5385 are applicable to the sporting leagues and the chief executive
officer of such league.§ 5387.
This paragraph is titled “Safe harbors”. In this provision it is stipulated that it shall be a defense against any prosecution or enforcement action under any Federal of State law against any personpossessing a valid license under the Subchapter that the activity is authorized under and has been
carried out lawfully under the terms of the Subchapter.§ 5388.
Provision titled “Criminal penalties” stipulates that whoever knowingly violates any provision of the Subchapter shall be fined or imprisoned for not more than 5 years or both. The court may also enter a permanent injunction enjoining such person from taking part in betting and wagering.§ 5389.
This paragraph stipulates that no provision of the Subchapter shall amend, limit, extend any Federal, State or Tribe law regarding prohibiting, permitting or regulating gambling within the territory of the USA.IV. Other provisions of the IGREA.Moreover IGREA stipulates that the Director is obliged to submit a yearly report to the Congress of the USA, consisting of the following information:
• A comprehensive statement regarding the limitations imposed by the States, Indian tribes, and sporting leagues;
• Relevant statistical information on applicants and licenses;
• The amount of the collected licensing and user fees during last year;
• Information on regulatory or enforcement actions undertaken during the period;
• Any other information which may be relevant for the Congress of the USA during the evaluation of the effectiveness of this Bill.
Furthermore, the Director is obliged to prescribe regulations which will enable the appropriate implementation of Subchapter V, and shall publish such regulations in a final form in the Federal Register before the end of the 180-day period beginning on the date of the enactment of the Bill.
The essential provisions of the Bill shall apply after the end of the 90-day period beginning on the date of the publication of the regulation described in the previous sentence.
V. Final conclusions.
The IGREA bill, which is the subject of this legal opinion, is a result of a general tendency which can be spotted in the USA regarding internet gambling. This tendency is set to widen the role of the Government regarding this sector of market. The major consequences of IGREA concern
certain powers given to the Director. He will solely be ably to grant license for activities relating to internet gambling. The Bill imposes also many obligations on the entities which conduct business in this sector. Nevertheless, it needs to be underlined that the guidelines described in
this legal opinions are at this moment at the phase of a bill and there is no certainty whether theywill become effective and binding law in the USA, and even if they would – we do not know when it will happen.can anybody put that in layman’s terms for those of us dummies?
I gotta step out but when i get back it’d be great to if someone could point out the important stuff
thanks in advance
S.
Here are a few notable mentions that people may find interesting.
1. The applicant agrees to be subject to USA jurisdiction and all applicable USA laws relating to internet gambling
2. Stipulation for the NFL, NBA, NHL, MLB, etc… Sporting leagues may prohibit internet gambling on league activities. (In other words, no sportsbooks in the United States since the leagues oppose this bill).
3. No licensee shall accept bets or wagers, or engage in any Internet gambling activity within any State or in the tribal lands which prohibit it. (you would see a lot states enacting explicit bans on internet gambling if the bill passed..)
4. Intermediate Routing – The intermediate routing of electronic data shall not determine the location or locations in which a bet or wager is initiated, received or otherwise made (Hmmm…this is also in the UIGEA. This means that I can place a bet in Texas, and my data can take a hop through an ISP in California, as long as the bet returns and is placed in Texas.. no bets outside of the state)
5. Financial Institutions- No financial institution shall be held liable for engaging in financial activities and transactions for or on behalf of a licensee or involving a licensee, if such activities are performed in compliance with this subchapter and with applicable Federal, State, and foreign banking laws and regulations (gotta protect the banks.. of course)
In layman’s terms, I think the intent of this bill is to further expand the exclusions for intrastate gambling that were carved out in the UIGEA… I don’t think it’s meant to open the flood gates…more like limiting the action to the individual states
:stirpot: as always, just my two cents
