I have to disagree with your analysis of my post. Mainly because your reply actually backs up my main points. Essentially what we are discussing is your use of the terms “illegal” and your understanding of being “subject to US law”.

Please let me go through your reply.

1) Bill said:
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Actually, I think you’re wrong on this. France has sued Yahoo over things that are only illegal in France and has won.

http://informationweek.com/news/showArticle.jhtml?articleID=177100347
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As I said in my original post: “So, in fact, you are only *subject* to US law insofar as the country in which you operate agrees with and are prepared to cooperate with the enforcement of that law”

The point is here, that the US authorities decided to cooperate with the enforcement of the French law. The US allowed the US court to examine whether or not Yahoo was liable. But it was the US who made that decision of whether or not to subject Yahoo to the French law. Yahoo were not subject to it merely by the fact the law exists.

2) Bill said:
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China isn’t going to say that a US citizen can’t have a website critical of China if he doesn’t live in China but they can and do say that if you’re a Chineese citizen it’s illegal for you to view that website and it would likewise be illegal for you to produce that website if you lived in China.
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True, but not really relevant since the US haven´t made it illegal for a US citizen to place an online bet with an offshore website, and, the Chinese government are not saying that such a US website is breaking Chinese law and those involved in that US website will be prosecuted should they ever visit China.

3) Bill said:
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The US went the other way around and basically said, if you do business with a US citizen while he is in the US, you are subject to US law.
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This is where I think you need to be clearer as some people may well think that “you are subject to US law” means that US law enforcement agents can come and get hold of you and take you to court, wherever you are in the world. Or wherever you are int he world will send you to the US and the waiting law enforcement agents. You would only be subject to US law, in the case of online gambling, should you find yourself in the US.

4)Bill said:
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If Amazon sells me a book in California they have to abide by Ca. law even though they’re in Washington. Likewise, it would be illegal for a foreign country to break the laws of the US or states even if it were online.
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Yes, but if they broke Ca. law there is a mechanism in place in the US to take them to court, agreed by those states. i.e. they are subject to Ca. law because there is a method of enforcing that law.
If it´s illegal for a foreign country to break the laws of the US then why aren´t those involved in online gaming sites being prosecuted, i.e. why isn´t the law being enforced and punishing those who breaking it if they are subject to it?
perhaps because it´s legal in the country in which they operate?
You need to understand that what´s illegal in the US is not necesarilly illegal in other countries.

5)Bill said:
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But the US is not only a desireable place to live and do business but many international flights stop in the US because of its size. The long arm of the US lawman can easily snatch someone it wants. Perhaps not as easily as if these companies were located in the US but it’s far more likely a successful business person is going to cross into the US than they are to cross into Iran.
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It´s not such a desireable place to live if you want to play a little online poker unfortunately.
Yes the US lawman has a long reach. It reaches all the way to the edge of US international waters. Sometimes it also reaches into other countries…….. but only where the other countries agree with the reason for it reaching in. Online gambling prohibition is not one of those cases.

6) Bill said:
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So, you, like many, seem to confuse the likelyhood of extradition with whether or not the act itself is illegal. It is illegal.
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In Ireland, Gibralter, the Isle of Man and the Carribean Islands it is NOT illegal to accept bets from US citizens!
No, I completely understand what “likelyhood of extradition” is and what what the word illegal means. You need to stop talking in absolutes and understand that the word “illegal” is relative….. i.e. relative to where you are in the world when you perform the action.

7)Bill said:
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The choice you make when you break that law is whether or not you ever want to set foot in the US again. Sure, you could live the rest of your life in the UK or some other country but chances are you just might have some ties to the good ol’ US of A and don’t feel like making a decision that could haunt you for the next 20 or 30 years just so you could line the pockets of stockholders.
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Exactly, this hits the nail on the head, it all depends on whether or not you are likely to go to the US. If you stay in Europe where you took the bet from the US citizen you don´t have to worry, since it´s not illegal to do that in Ireland and being in Ireland you are subject to Irish laws, not US laws. But if you go to the US you then subject yourself to US laws regarding your taking of that bet when you were in Ireland.
And we hope this prohibition doesn´t last for the next 20 or 30 years, please.

Anyway, I argue all the above with the greatest respect to you and the site and thank you for many interesting blogs on the US poker scene.

mark

Actually, I think you’re wrong on this. France has sued Yahoo over things that are only illegal in France and has won.

http://informationweek.com/news/showArticle.jhtml?articleID=177100347

So, your Iranian example could happen and could also end up with IMDB executives in hot water should they ever travel to Iran.

Most countries restrict their citizens because they realize that trying to get jurisdiction would be impossible. China isn’t going to say that a US citizen can’t have a website critical of China if he doesn’t live in China but they can and do say that if you’re a Chineese citizen it’s illegal for you to view that website and it would likewise be illegal for you to produce that website if you lived in China.

The US went the other way around and basically said, if you do business with a US citizen while he is in the US, you are subject to US law. There’s plenty of previous rulings that make this quite reasonable. If Amazon sells me a book in California they have to abide by Ca. law even though they’re in Washington. Likewise, it would be illegal for a foreign country to break the laws of the US or states even if it were online.

I think some of the confusion is over jusrisdiction. Iran doesn’t pass a law making it illegal for a US citizen to create the IMBD because they pretty much know that the chances of the founders of IMDB coming to Iran are slim and none. But the US is not only a desireable place to live and do business but many international flights stop in the US because of its size. The long arm of the US lawman can easily snatch someone it wants. Perhaps not as easily as if these companies were located in the US but it’s far more likely a successful business person is going to cross into the US than they are to cross into Iran.

The other part people don’t understand is that a CEO is an employee. Sure, he might make a big fat salary but if you’re the CEO of an online gaming company making $1 million a year and you could go to 10 other companies and make a similar salary, why would you risk going to jail to make shareholders rich? Same goes for board members. And the same goes for Joe Blow who works as a systems engineer and happens to be a US citizen.

So, you, like many, seem to confuse the likelyhood of extradition with whether or not the act itself is illegal. It is illegal. The choice you make when you break that law is whether or not you ever want to set foot in the US again. Sure, you could live the rest of your life in the UK or some other country but chances are you just might have some ties to the good ol’ US of A and don’t feel like making a decision that could haunt you for the next 20 or 30 years just so you could line the pockets of stockholders.

“But when you take bets from US customers while they are physically in the US, you are subject to US laws”

What exactly does that mean? In what way would I, as an offshore gaming site, be *subject* to US laws?
To me, being subject to a law is defined as suffering the appropriate punishment should you break the law. And that those who enforce the law have the ability to punish you.
An action can be either legal or illegal in the place where the action takes place. Acceptance of a bet from a US customer is not illegal in the Isle of Man or anywhere else that offshore gaming sites operate.

Another rather dubious analysis from the blog

“I recently explained it to someone by saying that selling, possessing, or using marijuana is illegal in the US. A US citizen can go to Amsterdam and toke up all day long and not be in violation of any US laws. Nor would the Bulldog Cafe be in violation of any US drug laws for selling a US citizen a few joints while the US citizen is in Amsterdam. But the Bulldog Cafe cannot sell marijuana to US citizens while they are in the US. The Bulldog Cafe can’t set up a website and sell joints to US citizens”

No they can´t, because the DUTCH government has made it illegal to do that, so bad example!
Let´s expand on the Blog´s logic.

Iran makes it illegal for websites to give information about Hollywood films as it believes, oh i don´t know, they are a corrupting influence or attempt to rewrite history or something. An Iranian student accesses the IMDB.com and reads all about the latest Steve Segal offering. So according to the blog´s logic IMDB is now *subject* to Iran´s law about Hollywood websites? Rubbish!!!!!

Why haven´t the US government been seeking the extridition of Gaming site board members then if they are subject to US laws. Just as the US wouldn´t send the owners of IMDB to Iran for any kind of trial, no European or carribean government would send gaming site owners/directors for trial in the US. Just as the US would fundamentally dissagree with Iran´s law on hollywood websites so the European goverments fundamentally dissagree with online gamblng prohibition (check out the UK government´s recent comments on prohibition).

So, in fact, you are only *subject* to US law insofar as the country in which you operate agrees with and are prepared to cooperate with the enforcement of that law. Just try and send an extradition request for a British Gaming exec via Tessa Jowel, or whatever her name is :-)

I’m not 100% sure I agree. Those FT points have value. You’re allowed to exchange them for stuff in the store, right? If you’re wagering your points instead of money, I don’t think that makes any difference in the eyes of the law. I mean, if you wanted to get down into the details, you purchase chips and you wager chips and not money so all forms of gambling that involve chips should be legal. I’m unaware of any court who has taken that position so I would have to assume that as long as you wager something that has tangible value (e.g. not toothpicks or something silly) the courts are going to view that the same as a money wager.

Now, if the guy wins via a freeroll that’s a bit of a different story. Of course, that still does nothing to negate the fact that the company has been accepting illegal wagers since Oct 13. Any FT exec who shows up at that tournament would still be subject to possible arrest.

Bill

Think there are also free satellite’s that get you into weekly tournament that don’t require points. It’s unlikely but possible that everyone who wins there way to Red Rock has not made a financial transaction or $ bet since Oct. 13.

Of course the law is hypocritical and silly, but that doesn’t matter. Not at all. Stop complaining about it.

I don’t think the Feds will make prosecuting people who gamble online a priority. Actually, I think it’s quite likely they won’t give it more than passing attention. The people responsible for it will trumpet its passage to score political points, but it probably won’t be funded fully enough to put real teeth in it. I doubt Bill Frist dreams of seeing Chris Ferguson and Greg Raymer in handcuffs. He’s cynical and ambitious enough to be satisfied with the law’s mere passage.

Unfortunately, the way the law in constructed seems to make this irrelevent. Because the onus was placed not on individual players, but on the financial institutions who process the payments (and, of course, on the poker sites themselves). Instead of 50 million poker players as targets, this law goes after the senior managers and directors of those companies. Like Bill said, bankers are inherently risk-adverse. They aren’t going to risk a federal investigation of their company (or of their own conduct) for the sake of, at best, a few million dollars poker players may have on deposit with them.

Even if the odds of a federal investigation are 1% (or even much less), why would a bank risk it? Even the hint of financial malfeasence could make a bank’s stock tank overnight, plus there’s the possibility of prosecution of the bank’s senior management if they didn’t take steps to block gambling transactions. And as Bill has said, EFT transactions aren’t hard to filter and/or block. Why would a bank do business with Neteller? Why risk it? The cost-benefit ratio is heavily weighted on the wrong side.

While I don’t think the DoJ will give this law more than cursory attention, it wouldn’t surprise me if they tried making one high-profile case early on. Or at least threatened to. Actually bringing a case could be counterproductive–they might lose. The Feds don’t need to put people in jail for this law to work. They just need people, the right people, to be scared. In that way, everybody loses. Except Bill Frist. Well, until Bill Frist’s Presidental hopes die in Iowa or, perhaps, New Hampshire.

I don’t think Frist is doing this on moral grounds, anyway. He is pandering to the Moral Majority for his ’08 POTUS run and probably to help the US casinos get a piece of the online poker pie. I would be interested to see how much Harrah’s Gaming stock he has bought recently or if he shorted some Party Gaming stock on the LSE. He does have a history of using insider trading info…