I was just skimming through the actual text of H.R. 2267 to tie up a few loose ends on my previous post, when I noticed something unexpected. I was looking for what I assumed would be a provision for criminal prosecution and punishment for offering online gaming without a federal license. As far as I can tell, there is none. I.e., there's nothing that lays out as a crime, with specific associated penalties, the act of providing online gaming without a license. It looks to me as if the only way the feds will have to prohibit such gaming is by going to court and obtaining an injunction--basically a cease-and-desist order, the continued violation of which would bring the offender under the provisions of contempt of court.
That strikes me as odd and unexpected, because virtually every time a licensing program of any sort is put into place by any jurisdiction it is accompanied by a provision making it a crime to engage in the activity involved without obtaining said license. Still, I'm not at all sure what, if any, significance to attach to this fact. I also don't know how it would work in actual practice. After all, if a company has its headquarters and servers entirely outside of the U.S., what can a federal court actually do it? Of course, that's true of criminal provisions, too, as long as the owners/operators don't make the mistake of deciding to celebrate a good year by going to Disneyland.
Incidentally, there is also no clause that I can find making it a crime to engage in online betting as a person prohibited from doing so under the new regulatory scheme; the responsibilities lie wholly with the licensee/operator. Similarly, nothing in this bill makes a federal crime out of placing online bets with an unlicensed operator. Interesting.
Thursday, July 29, 2010
A legal oddity
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6 comments:
Actually, the penalties for breaking various laws are meted out by the Justice Department after a bill is passed. No bill or amendment specifically defines the parameters of criminal activity in the form of a penalty until after it has been signed into law.
No offense meant, Edgie, but that's just about entirely wrong. Congress has to spell out the penalty for trangression of a criminal act as a fundamental requirement of due process.
Well, actually, this was just a markup. There is no specificity when a bill goes for markup. It is discussed when the bill hits the floor of Congress, and the Justice Department specifies the punishment that is recommended by the Congress. A markup in the Financial Committee is not where that sort of thing takes place.
I just noticed this provision towards the end of the bill, in the section on cheating:
"(d) Criminal Penalty- Whoever violates subsection (a) or (b) of this section shall be fined under title 18 of the United States Code or imprisoned for not more than 5 years, or both."
So clearly the authors knew how to specify criminal penalties when they wanted to, but the only thing in this bill that triggers criminal penalties appears to be cheating--not operating a gambling site without a license.
After giving this a little thought, I wonder if--out of a combination of ignorance/arrogance--the anti-gaming forces blithely assume that the Wire Act and UIGEA already provide criminal penalties, not realizing those statutes most likely don't apply to online gaming sites. Sort of a reverse of the pro-poker forces who assume they aren't violating state gaming laws.
Another possibility is that other criminal provisions will be added in markup in the Juidiciary Committee (where the bill also was referred). I'm just not that up on the intricacies of House procedure.
Guys, the penalties are in the tax bill.
(The one no one likes to talk about.)
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