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MOGUL'S PLEA RESURRECTS UNFAIR U.S. LAW ARGUMENTS
This week's $300 million "settlement" and Wire Act guilty plea by the co-founder of Party Gaming, Anurag Dikshit has resulted in a blizzard of high-visibility coverage for the industry in the world's mainstream media, and much of it has been positive - highlighting the confusing and often discriminatory nature of US laws on Internet gambling and its application by the Department of Justice.
Among the subjects resurrected this week were the continued house-imprisonment after 2 years of being denied liberty of former BetonSports CEO David Carruthers, and lengthy detention without bail of BoS founder Gary Kaplan; the still unresolved World Trade Organisation disputes with the European Union and Antigua; the highly questionable acts by the state governor of Kentucky, his officials and a local county court in attempting to seize 141 global online gambling domains; the manner in which the UIGEA was rammed through Congress, and the way in which the supporting regulations became a "midnight drop" for the incoming Obama administration; the arrest of Neteller founders and how this was used to wring substantial sums of money from the e-processor and drive it from the US market; the inequitable nature of US legislative "carve-outs" for US horseracing, lotteries and fantasy football and several cases of official intimidation enacted against advertising media in the past.
The overall picture this publicity painted of official zealotry, commercial protectionism, uneven application of the law and political chicanery did the United States no credit.
Headed "I Plead Guilty to Possibly Violating Your Ridiculous Gambling Laws," the piece covered the Dikshit settlement with the DoJ, claiming that his brief statement when pleading guilty before a New York court this week alluded to the vague and arbitrary nature of US law.
"Even in admitting his guilt, Dikshit alluded to the arbitrariness and vagueness of U.S. gambling laws, especially as applied to foreign companies that are perfectly legal in the countries where they operate," wrote Sullum, quoting Dikshit's statement thus:
"I came to believe there was a high probability that the company's business was illegal under US laws. I acknowledge my actions and have come to believe that what I did was wrong."
Sullum examines that admission, writing: "Doesn't the rule of law require something more than the possibility of gradually realizing, after operating a business for years, that you are probably committing a crime?"
The Dikshit settlement immediately triggered a sharp statement from the UK-based Remote Gambling Association condemning the US Trade Representative at the World Trade Organisation for the unresolved status of its complaint on the inequities of US law as applied to its members. The trade association, which numbers most of Europe's major online gambling groups among its members, submitted a complaint to the European Commission which took up the issue with US authorities, apparently without a resolution.
One person in US politics concerned about the cooling US - European Union relationship was Rep. Robert Wexler (D-Fla.), chairman of the Europe subcommittee of the House Foreign Affairs Committee, who also quickly responded to Dikshit's guilty plea by urging the legalisation of online gambling:
"It is of critical importance that we find an effective and immediate way to regulate and tax internet gaming in order to avoid a serious trade dispute with the E.U., which, in turn, could have global trade repercussions for the United States. The retroactive and discriminatory enforcement against E.U. parties, who ceased operating in the U.S. a long time ago, has directly led to an escalating trade dispute with the E.U.," he said.
Sullum's piece elicited a number of comments, among them these:
"This is two things: a shakedown, and a message to other gambling providers that US-based gambling interests control the US market. Plain and simple."
"'It is of critical importance that we find an effective and immediate way to regulate and tax internet gaming.' Sadly, this counts as progress. I, for one, am still very curious (and dubious) about how the US exerts criminal jurisdiction over a foreign national who has no "nexus" with the US (that is, no physical footprint here)."
"What we need is to take over a flag-of-convenience microstate, make it illegal there to make gambling illegal anywhere, and then start seizing the persons of American legislators, executive branch personnel, and judges wherever we find them. Only allow them to leave if they plead guilty, surrender assets, and accept caning. That would be fair, right?"
"Maybe call it Extortiania or Gougestan?" another poster commented.
"I was thinking more along the lines of Hoistepetardikia," wrote another.
"There's no way to rule innocent men. The only power government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws."
Techdirt commented on the Dikshit issue and recalled previous cases in which the DoJ has extracted online gambling related "settlements" outside of the courtroom. Doing some quick calculations, it found that Dikshit's and the Neteller founders' settlements alone pulled half a billion dollars into US federal coffers.
"If revenue generation is the goal, why not simply legalize online gambling, then regulate and tax it? That way, the government gets its slice, while US citizens can enjoy some protection while betting, instead of being forced into the grey market where they're largely at the whim of site owners," the popular publication concluded.
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