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Internet Arrests Deal Huge Blow to Online Gambling
Tuan Nguyen (Blog) - January 19, 2007 9:01 AM
Print E-mail del.icio.us 36 comment(s) - last by OrSin.. on Jan 22 at 11:17 AM
Arrests of those involved with the online gambling business make waves

Prosecutors in the U.S. have arrested two business men who are executives of a company called NETeller, responsible for processing payments for online gambling websites. Most details of the arrest are unknown, but it was made clear that NETeller illegially handled and processed billions of dollars generated from online gambling.

NETeller founders John Lefebvre and Stephen Lawrence were arrested and charged with processing gambling proceeds. Prosecutors are looking to push for a maximum sentence of up to 20 years in prison. Many popular online gambling websites such as Full Tilt Poker, PartyGaming, Pokerstars and Sportingbet use NETeller to process payments from customers.

The days are limited for online gambling, however. Late last year, the U.S. government formally banned online in the U.S., making any company or website hosting such services online fully illegal. Some of the more prominent gambling sites such as the ones listed above have pulled or are pulling their businesses out of the U.S.

NETeller operated its business in the Isle of Man, away from U.S. jurisdiction, and allowed gambling companies to transfer money from their U.S. operations to offshore accounts.

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Ridiculous
By Suomynona on 1/19/2007 10:17:43 AM , Rating: 5
I don't gamble and I think doing it is usually stupid, but the anti-gambling laws are absolutely ridiculous. The more relatively harmless activities that you outlaw, the more "criminals" you create. It's so hypocritical of them to specifically outlaw online gambling just because they can't tax it.




RE: Ridiculous
By TwistyKat on 1/19/07, Rating: 0
RE: Ridiculous
By Christopher1 on 1/20/2007 12:35:59 AM , Rating: 1
Unfortunately, there are too many people out there who think that 'freedom' is: the ability to impose YOUR moral values on other people via laws that are ostentably to 'protect' them from their own stupidity or what they think it their own stupidity.

Until people start speaking out about these laws, and realize that also 90% of them are NOT fair to people, ranging from the sexual prohibition laws to the drug laws, we are going to have more and more of them passed.

It would be better if they would heavily tax 'vice', a 25% tax or more on online gambling. That would dissuade the 'chumps' and kids from getting involved in it, and would provide revenue for the United States government.


RE: Ridiculous
By FITCamaro on 1/21/2007 4:50:53 PM , Rating: 2
Drugs are illegal. Get over it. You don't wanna go to jail for it, don't use it. You're retarded if you use them anyway. As far as gambling goes, I can understand why they banned it. People were going deep into debt with online gambling and it was completely unregulated. Was it 100% necessary? No. But it wasn't a bad idea.

As far as American's pushing American morals and values, uh yeah. You're in America and our laws are based on them. If you don't like things here, unlike a lot of other countries, you're free to leave. We shouldn't have to change our society to make you feel more comfortable. Either speak our language and follow our laws, or get out. No ones telling you to believe in a certain religion, to be a saint, or anything else. We're just telling you to be a good person and behave yourself or face the consequences.

I have no problem with people from any other country, but don't come here and expect us to do things your way. We're not in the Middle East, you can't cover your face on your drivers license for religious reasons. Our official language is English, learn it. We're not in Canada, pot's illegal here. This country promotes freedom of religion but it was largely formed by Christians so yes, the word God appears. It doesn't mean you have to believe in the Christians God or a God at all. Just say it in the pledge and get over it. Or don't. Skip it and keep going. Don't bitch about it being there and demand it be removed. I'm not Christian and don't get offended, you shouldn't either.


RE: Ridiculous
By OrSin on 1/22/2007 11:17:44 AM , Rating: 2
You are one big idiot. First english is not our offical language. The US has no offical language. Beleive me I wish it was english but its not. Our laws are not based on morals or vaules. They are based on the Constuition. And only that. All law made after that are law made by those in power at the time. It have nothing to do with the bases of American culture.

You want people to gt over it but you would not say a pleged that had Alli in it or Satan. So dont get made at the people that dont want it. You have not clue about America. Until the 50's women could not even vote. Until the 60 I could not use the samr rest room as white people. SO dont act like America treats thier citizens so great. Yes they are better now but less then 50 years ago this nation was completely fucked. Sorry if your to young to remmebr but alot of people in power are not and they still want things to go back to way it was.

So yes every fight everything. If not I would still be 2/3 a man.

PS
they are outlawing online gambling, but not gambling everywhere else. So thier is no moral high ground


RE: Ridiculous
By IMPoor on 1/19/2007 11:58:29 AM , Rating: 3
Amen brother. you hit the nail on the head. The govt does not care if you gamble at all. In fact they are all for it as long as they get their cut. The problem is that ALMOST nobody pays taxes on money won online. The govt would be smarter to legalize it and force neteller and others to tax the winnings apropriately. It would be easy for neteller and online gamling sites to track the flow of money from ones account. When I win a big jackpot in vegas the tax man is right there to take his cut. Why not make it the same for online gamblers. Nobody likes to pay taxes but wouldn't this solve the problem. Its stupid to waste so much resources on a problem like this when we have so many real issues in this world.


RE: Ridiculous
By TheDoc9 on 1/19/07, Rating: -1
RE: Ridiculous
By Polynikes on 1/19/2007 1:29:34 PM , Rating: 3
You really think the government cares if people waste their money gambling or choosing a fake site? Gambling may not be smart, but it's definitely not a scam on a lot of the sites online. People know better, the FBI couldn't care less about stupid people wasting their money at fake gambling sites, and this is ultimately about a bunch of stupid baby boomers trying to force their bullshit morality down our throats.


RE: Ridiculous
By Oregonian2 on 1/19/07, Rating: 0
RE: Ridiculous
By jmunjr on 1/19/2007 10:48:08 PM , Rating: 2
Lol, you must be really young. The baby boomer group stopped growing in the early to mid 60s. The Gen X group followed, and I am not sure when that ended, probably in the 70s some time.


RE: Ridiculous
By mindless1 on 1/19/2007 5:31:35 PM , Rating: 2
You cannot arbitrarily declare it "not a scam on a lot of the sites", that is the whole purpose of regulation.

People DON'T know better, and you'd be deluded to think a game of chance couldn't be electronically or programmatically manipulated.

Perhaps a large percentage of complaints are from those trying to force morality on others, but certainly not all. There has to be a balance between freedom (to gamble or not)) and justice (to make it a fair gamble). This is yet another example of the internet population advancing faster than government can keep up. Those who are gambling would be wise to wait it out until there is effective regulation, but in today's America is seems we are our brother's keeper so,


RE: Ridiculous
By Christopher1 on 1/20/2007 12:38:53 AM , Rating: 2
Well, that is true. It COUDL be electronically or programmatically manipulated. But then again, so could the machines in the Casinos in Nevada!

What keeps that from happening? Strict government oversight, which includes pulling the programming at time and making sure that no one has f***ed with the programming, either at the casino or at the manufacturer.


RE: Ridiculous
By akugami on 1/21/2007 9:36:42 PM , Rating: 2
Some of the larger gambling sites are definitely not cheaters. I know of someone personally who has made about 18K last year on online gambling alone. He was pretty PO'ed when he found out they were about to outlaw it.

It's all about the government and them wanting their cut. That's all it's about.


RE: Ridiculous
By Samus on 1/20/2007 1:25:15 AM , Rating: 2
If they were smart they'd tax it, let there be corruption (because corruption exists in all facets of gambling) and still make a lot of money, inevitably lowering our taxes or helping to rebuild Iraq, probably the later.


RE: Ridiculous
By Oregonian2 on 1/19/2007 3:20:15 PM , Rating: 2
quote:
The problem is that ALMOST nobody pays taxes on money won online.


Although that's part of it, the government wants their cut of the gross revenue of the gambling racket. Just as they do for state "lotteries", "video poker" and the like (and/or the taxes that Nevada gets on the gambling places there).


RE: Ridiculous
By Steve Guilliot on 1/19/2007 7:21:50 PM , Rating: 3
quote:
It's so hypocritical of them to specifically outlaw online gambling just because they can't tax it.


First, it's not "hypocritical". You can argue that it's unfair, but not that it's hypocritical.

Second, there's nothing inherently wrong with banning something for economic reasons. If this was a physical good being siezed at the border because smugglers weren't paying taxes, no one would blink. But this is *online* gambling, so it's a golden calf and everyone is upset. Freeeeddooooommm!!


I thought poker sites were ok
By thejez on 1/19/2007 10:14:34 AM , Rating: 2
I just saw a notice on PokerStars that NETeller was pulling out but it didnt mention the arrests... but i thought poker sites were exempt because they are classified as game of skill rather than gambling... maybe these other sites offered other types of gambling games?




RE: I thought poker sites were ok
By h0kiez on 1/19/2007 10:43:36 AM , Rating: 2
No...this law has lumped in Poker sites as well. It is a game of skill, but the government isn't intelligent enough to see it that way.


RE: I thought poker sites were ok
By KilljoyTXinMI on 1/19/2007 11:00:28 AM , Rating: 2
Agreed. Personally, it seems to be much more of a risk for me to invest my disposable income in the virtual World of Warcraft or SecondLife economy than it is to play poker online, because I'm paying money for digital constructs that only have -perceived- value. I might as well be paying for a pretty sunset.

For an $8 investment, I make $30-$120 a month playing skills-based games on my cell phone, in competition with other players. It paid for my kids' Christmas this year, for crying out loud. Explain to me how -that- is different from online poker.

I can play in dart tournaments, pool tournaments, and poker tournaments at pubs and MAKE MONEY every month, based on my abilities vs. the others who choose to participate. A computer-generated card deck is the same as a real one, it's the people across the table that are giving me the money.


RE: I thought poker sites were ok
By Oregonian2 on 1/19/2007 3:31:19 PM , Rating: 2
I gather then, it being skill based that if a group of equally skilled people play poker with one another then all will win money? Luck not involved?


RE: I thought poker sites were ok
By Beckett on 1/19/2007 5:47:31 PM , Rating: 2
I hereby claim ownership of the idea that football is a luck based game, because clearly if two groups of equally skilled players square off against each other they can't both win, therefore, it must be a game of luck.


RE: I thought poker sites were ok
By Oregonian2 on 1/19/2007 6:54:33 PM , Rating: 2
Good point! In fact the Chargers, who had the much better players, lost last weekend to new england because of bad luck.


RE: I thought poker sites were ok
By Oregonian2 on 1/19/2007 6:59:24 PM , Rating: 2
Also reminded me about how long ago when I was single, I used to go to poker parties with my co-worker friends almost every weekend. Same set of people every week, so whatever skill sets were, they weren't changing week to week. My (and other players) outcome varied wildly from week to week -- even though our skill sets were a constant. Why? Luck.


RE: I thought poker sites were ok
By jtesoro on 1/20/2007 12:20:14 AM , Rating: 2
Just because luck can decide matches doesn't mean that these matches are a game of luck.


Few comments
By gramboh on 1/19/2007 1:20:14 PM , Rating: 2
quote:
Prosecutors in the U.S. have arrested two business men who are executives of a company called NETeller, responsible for processing payments for online gambling websites. Most details of the arrest are unknown but it was made clear that NETeller handled and processed billions of dollars generated from online gambling illegally.


The two men are not executives of NETeller, they were founding directors but at the time of arrest they were no longer directors and simply shareholders.

In essence, the US authorities are attempting to prosecute individual shareholders/foundres of a foreign public corporation. Pathetic.

Also, NETeller is a UK company (formerly incorporated in Canada) which did business with US institutions.

What is the basis for the law here, was the US annoyed at not getting a cut of the proceeds and not being able to regulate foreign financial institutions? Lame.




RE: Few comments
By Polynikes on 1/19/2007 1:31:21 PM , Rating: 2
If that's true then I really hope those guys are cleared of the charges. What a bunch of crap.


RE: Few comments
By Hawkido on 1/19/2007 3:19:32 PM , Rating: 2
Look guys, the real charge is that they let US citizens generate income on US soil by playing online, then allowed them to deposit the income in an off shore account, without reporting the income to the IRS. That is tax fraud. Lawyers, Attorneys, and citizens go to jail for that all the time. The only way you can use an off shore account legally (and this is a very very thin line), is if you generate income outside the US and any countries that have a Tax agreement with the US (like the Bahamas and Puerto Rico) and never bring it into into the US, but deposit it in an off shore account. Then you can get a debit card and use it in the US. Technically it nevery enters the US in your possesion. It is passed electronically from the off shore account to the store you used it at.

This is a perfect reason to switch to a consumption tax versus income tax. Make all Federal taxes a flat sales tax on all new purchases. No one can get away from that. Build a new house, taxed. Buy a new car, taxed. Buy a hamburger, taxed. No exceptions, even foriegners, drug lords, and illegal immigrants will get taxed. After that who cares if the mexicans want to come up here and cut my grass for $7. He still has to eat, sleep, and dress; all taxed.

you make $10,000 a year. you will only pay that flat tax on what you spend. Let's say 20%, so that would be $2000. You make $100 million, well that would be $20 million. assuming you spent it all. If you didn't, then you put it in the bank where someone else borrows it and then they spend it, BAM! taxed. That way you only get taxed once. No payroll tax, sales tax, then property tax.

The fair tax even has a prebate on your monthly taxes for the minimum cost of living for your family size (to take most of the tax burden off of the really low income families) It's called the fair tax because even the extremely wealthly family of four gets the exact same prebate as America's poorest family of four. But everyone pays at least some taxes. The poorest can at least say "I AM a Taxpayer, not a Taxpayee!!" The money would go into a pie chart and get divided up between all the programs that currently demand seperate "unaccountable" taxes (Social Security comes to mind).


RE: Few comments
By Christopher1 on 1/20/2007 12:47:13 AM , Rating: 2
A flat tax isn't fair to some people, because some things are necessities that you cannot live without. Food, clothing, housing, heating, transportation.... these are all NECESSITIES in this day and age that should NOT be taxed.

Taxing computers, TV's, candy, snacks and other things that are LUXURIES I can agree with. Not taxing everything period.

It just isn't fair to those who would see 7% of their income disappear for no good reason at the cash register when they are trying to buy things that they cannot do without.

A better thing would be to have a tax rate of ZERO for people earning less than 15,000 a year, a tax rate of 10% for people earning up to 100,000 dollars a year (with some tax breaks for children), from 100,000 to 1 million 30% (with some tax breaks), and for people earning over 1 million a year 50% tax with NO exemptions.

I am serious with this, these are FAIR RATES when you come out to it, because the people making over 1 million STILL have more money than those making less than 1 million.


RE: Few comments
By Kazairl on 1/20/2007 10:26:34 PM , Rating: 2
If you bother to check fairtax.org, you'll find that they propose all families get a rebate check equal to the sales tax on the poverty level. This is actually MORE fair than simply exempting food, clothing, and housing. That's because the rich pay more for those things than the poor. (Think lobster vs. canned soup, Macy's vs. Value Village, "affordable housing" apartment vs. condo/luxury home.)








Disturbing
By INeedCache on 1/21/2007 2:11:15 AM , Rating: 2
Some of you people don't really have any idea what's going on in life, do you? Comments like gambling being "relatively harmless". Go to a gambler's anonymous meeting and listen up. If you still feel it's relatively harmless, you're really lost.




RE: Disturbing
By shabazkilla on 1/21/2007 12:34:51 PM , Rating: 2
If someone were to attend a Food Addicts Anonymous meeting I'm sure you would hear plenty of stories about food ruining peoples lives just as much as gambling. Addicts will always find something to be addicted to; gambling, food, heroin - it really doesn't matter.

I think the real question is should society outlaw things because a small percentage of the population has a character flaw that limits their self control? Ultimately I think you need to look at the "thing" in question. Does it have a beneficial use or is it simply destructive? Gambling can be seen as a form of entertainment.


RE: Disturbing
By typo101 on 1/21/2007 2:00:27 PM , Rating: 2
Same goes for alcohol. For me, both gambling and alcohol are relatively harmless. Sometimes I wake up with a bad hangover, sometimes I leave a poker night with a lot less money.

It depends on the person. Personally I don't think alcohol, gambling or weed should be against the law (some drugs like crystal meth are not recreational but apparently instantly life altering, and i feel those are rightly illegal).


Online gaming NOT illegal in US
By pokermanx on 1/19/2007 11:42:38 AM , Rating: 3
Your post today includes the comment " the U.S. government formally banned online in the U.S." This is not at all true; what the UIGEA actually did was make financial transactions for online gambling illegal. The issue of whether online gambling is illegal is still in question excepting laws enacted in specific states (like Washington).

It is still completely unclear whether online poker is covered by this or other legislation.




i agree
By ElJefe69 on 1/20/2007 1:37:14 AM , Rating: 2
Gambling is giving your money to someone and you hope you get more back. If you dont, you leave or give more. Nothing illegal about that except our corrupt government who enforces laws that organized crime people want. It keeps only a select few with the priveledge to gamble.




By shabazkilla on 1/20/2007 12:35:22 PM , Rating: 2
The only reasons why online gambling has been outlawed is simply greed and corruption.

Traditional casinos are a huge business - one that stood to loose an increasing amount of money to online gambling if left unchecked. How much money do you suppose casino owners would be willing to spend lobbying for the outright banning of online gambling? How much money does it take to grease the wheels of government?




pay your taxes!
By paydirt on 1/22/2007 8:27:31 AM , Rating: 2
Why should gangsters and the rich profit for online gambling without paying taxes?




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