Saturday, April 16, 2011

I'll ask it again

About 2 1/2 years ago I wondered out loud, and in some detail, why the online poker sites had not sought a declaratory judgment about the status of their product. See here, part #5. In light of the indictments and seizures announced within the last 24 hours, I come back to that same question.

If the sites had pooled their resources (or even each gone it alone, perhaps in different judicial districts), they may well have gotten an answer that offering online poker--at least in states where state law allowed it--was not a violation of the Wire Act, the UIGEA, or any other federal statute. If that had happened, then, one presumes, banks would have had little or no fear of prosecution for payment transactions. Which, in turn, would have meant that the sites would not have been tempted to miscode transactions, buy their own banks to do the dirty work, and whatever other shananigans they are alleged to have resorted to. However difficult and expensive that legal battle might have been, it would have been peanuts compared to what they are now facing--and they could have kept operating while getting it resolved.

As I wrote in December, 2008, "I cannot understand why nobody has filed a case to answer the question before indictments get handed down and one's actual liberty is put on the line. I think if I were one of the site owners, I would have insisted that my lawyers do it as soon as the DOJ started to show interest in finding targets. I would much rather have the question addressed on my own terms in a civil case than on the prosecutor's terms, with prison time hanging in the balance."

I still can't think of a good reason why this didn't happen. I still don't get it.


Marcio Rauwerda said...

I'm not convinced that everyone in the industry genuinely believes a.) that poker is a game of skill and that b.) the wire act doesn't apply.

Yet your question is excellent and I'm not sure why others haven't asked it. Perhaps because outside the US legal profession know such an action is possible?

Wolynski said...

I'm puzzled how an antiquated law pertaining to telephones can be applied to the Internet.

Prostitution is illegal, except for a few counties in Nevada, yet you can order them over the Internet quite easily.

So it really is NOT about upholding the law and splitting hairs over its finer points - it's about who chooses to prosecute whom when its convenient, er, when a pissload of money is involved.

If Harrah's is to enter Internet gaming, best to get rid off pesky competition. They can go to Washington and have any law made up - they already did it with UIGEA.

Party Poker perhaps decided there's not much point in wasting money trying to fight for their rights in an already utterly corrupt climate.

Grange95 said...

Probably because the poker industry feared losing, and having a definitive negative ruling on the books (note the mess the sites' stalking horse--the PPA--made of the legalization by litigation strategy). Better (i.e., more profitable) to declare their business entirely legal and reap the millions (or billions) in profits.