New Online Gambling Indictment

Jacob Sullum | May 14, 2007

Brett Tolman, the U.S. attorney for Utah, has charged four companies and seven people with evading the Unlawful Internet Gambling Enforcement Act, which bars financial institutions from handling payments for illegal online gambling, by processing Americans' bets through disguised overseas wire transfers and credit card payments. The indictment accuses the defendants of Wire Act violations, money laundering, bank fraud, and racketeering, all based on the same underlying actions. The government also is seeking forfeiture of $150 million, plus what looks like everything of value that the defendants own, under the Racketeer Influenced and Corrupt Organizations Act. Notably, although Tolman repeats the Justice Department's position that "virtually all Internet gambling is illegal," the website targeted by this indictment, BetUS, specializes in sports betting, which is clearly covered by the Wire Act, as opposed to other forms of gambling, which are not. As far as I know, all of the Justice Department's recent Wire Act prosecutions have involved sports betting.

Comments

Christopher Monnier|5.14.07 @ 11:33AM|#

Wow, I don't know about you but personally I feel a lot safer now.

|5.14.07 @ 11:34AM|#

I'm one who more or less applauds government efforts to curb gambling before the problem gets too bad.

Of course, the various state governments who run lotteries seem to have no problem about contributing to it.

Go figure.

|5.14.07 @ 11:35AM|#

Ah, yes. The Bush/Gonzales "Justice" Department.

squarooticus|5.14.07 @ 11:38AM|#

Dan, please detail the logic chain leading from "more gambling" to "Dan is unsafe".

Rhywun|5.14.07 @ 11:39AM|#

I'm one who more or less applauds government efforts to curb gambling before the problem gets too bad.

What problem?

Bhh|5.14.07 @ 11:45AM|#

Big Gambling must have some amazing pictures of our politicians. Maybe they have a special politician's penthouse in Las Vegas all wired up for video.

Gaming and injuns must give protection money to DC, but I figure so do people who could cash in on online gambling - credit card companies, etc.

|5.14.07 @ 11:58AM|#

Dan, please detail the logic chain leading from "more gambling" to "Dan is unsafe".

I don't claim that gambling makes me "unsafe". But it is a social problem and we're opening up a can of worms by becoming more permissive about it.

|5.14.07 @ 12:00PM|#

In lieu of online gambling, feel free to buy as many state lottery tickets as you want.

|5.14.07 @ 12:05PM|#

Big Gambling must have some amazing pictures of our politicians. Maybe they have a special politician's penthouse in Las Vegas all wired up for video.


A more likely reason is that internet gambling is more harmful than casino gambling due to lower costs for the gambler. In the old days, you had to plan a trip to Vegas in order to lose your shirt, now you just log into a website.

|5.14.07 @ 12:13PM|#

Libertarian militia. I call out the Libertarian militia.

Scooby|5.14.07 @ 12:28PM|#

In the old days, you had to plan a trip to Vegas in order to lose your shirt, now you just log into a website.

So it's Big Travel that's behind this? (Ignoring casinos within commuting distance of most of the population of the country- Texas being the exception, for which the taxpayers of Louisiana are grateful).

|5.14.07 @ 12:38PM|#

A more likely reason is that internet gambling is more harmful than casino gambling due to lower costs for the gambler.

Do you want to rethink that statement? Lower costs = greater risk? As a commenter in another thread said, "I need to take up smoking weed so I can understand that"...

|5.14.07 @ 12:38PM|#

I don't claim that gambling makes me "unsafe".

Then why should the government put the jackboot on it?

But it is a social problem and we're opening up a can of worms by becoming more permissive about it.

Who is this "we" you are talking about? What business is it of this "we" if other people gamble their own funds as the see fit?

|5.14.07 @ 12:40PM|#

Also, Dan T., you fail to consider the local dog tracks / horse tracks / jai-alai / casinos / etc.

The internet added a little convenience, but the venues were already there for people to lose their shirts if they wanted to.

|5.14.07 @ 12:41PM|#

Hell, even the old ladies are losing their shirts (SS checks) at the local bingo halls.

squarooticus|5.14.07 @ 12:41PM|#

I don't claim that gambling makes me "unsafe". But it is a social problem and we're opening up a can of worms by becoming more permissive about it.

Dan, can you explain what you mean by "social problem," and how other people spending their money is any of your business?

Rhywun|5.14.07 @ 1:05PM|#

can you explain what you mean by "social problem"

Gambling turns people into dirty smokers who congregate outside the OTB all day...?

Jim Murphy|5.14.07 @ 1:24PM|#

A more likely reason is that internet gambling is more harmful than casino gambling due to lower costs for the gambler. In the old days, you had to plan a trip to Vegas in order to lose your shirt, now you just log into a website.

By this logic we should also outlaw all online shopping--it makes it easier for "shop-a-holics" to overspend. While we're at it, lets outlaw any retailer of gourmet food online. At one point, you had to leave your house to buy enough food to become obese, now you can order it all online. And, of course, we have to shut down all online sellers of computer equipment to combat the problem of "Internet addiction"...

Jim Murphy|5.14.07 @ 1:26PM|#

...and, of course, we need to shut down the biggest gambling venue in the country by outlawing online access to stock brokerages and related investment opportunities. Way to go, Dan! I feel so much safer.......

Jim Murphy|5.14.07 @ 1:28PM|#

Gambling turns people into dirty smokers who congregate outside the OTB all day...?

But since they're betting on horse racing remember that's *good* gambling--meaning that the relevant government interests get their financial cut....

|5.14.07 @ 1:49PM|#

Do you want to rethink that statement? Lower costs = greater risk? As a commenter in another thread said, "I need to take up smoking weed so I can understand that"...

Well, it's pretty simple. Since gambling is a harmful activity, and like everything else the more it costs to engage in it, the less likely people are to do it, then you'd consider high costs as good thing as it prevents harmful activity.

|5.14.07 @ 1:52PM|#

Who is this "we" you are talking about? What business is it of this "we" if other people gamble their own funds as the see fit?

Because the problems associated with gambling affect everybody. Not to mention that history has shown that gambling goes hand-in-hand with corruption.

|5.14.07 @ 1:54PM|#

Ok, Dan T., why is gambling a harmful activity?

I'm willing to wager that at least half of the U.S. population has gambled at one point or another. How has this caused harm to them? To the U.S. in general?

Explain.

|5.14.07 @ 2:01PM|#

Well, it's pretty simple. Since gambling is a harmful activity, and like everything else the more it costs to engage in it, the less likely people are to do it, then you'd consider high costs as good thing as it prevents harmful activity.

On the flip-side of that argument: Gambling used to be an expensive proposition. Those who chose to partake in it risked losing everything they had at any given moment. Now, however, gambling is more affordable. One can gamble until he/she is content and still lose less than one might have in the past.

Does that not make just as much sense as what you're preaching?

And, of course, both your argument and mine are assuming that people are unable to control how much they spend at any given moment.

|5.14.07 @ 2:02PM|#

I sort of feel like there are so many well-known problems associated with gambling that you're just patronizing me with that question.

Granted, there is a chicken/egg element to gambling - does gambling make people unhappy or is gambling the kind of self-destructive activity that only unhappy people do?

D.A. Ridgely|5.14.07 @ 2:16PM|#

So, what are the online odds of a conviction?

|5.14.07 @ 2:21PM|#

Well, it's pretty simple. Since gambling is a harmful activity, . . .

Dan T., perhaps you would like to ban all activities that grab the attention of thrill seekers. People die on a regular basis from jumping out of airplanes, speeding down mountains on a pair of slats, and a host of other activities that are far more dangerous than gambling.

I mean, who really needs the right to put themselves in danger just for a little fun.

|5.14.07 @ 2:23PM|#

See, this is the quality I expect from you, Dan. You do much better trolling one thread a day, rather than trying to do every thread on the blog at once.

|5.14.07 @ 2:28PM|#

I still don't see how you claim that gambling is for the unhappy, or makes people unhappy, or is a self-destructive activity.

I think you're the one that's being patronizing towards anybody who may partake in gambling occasionally.

I won't deny that there are problem gamblers who cannot control themselves, but the vast majority of people gamble only on a recreational basis.

|5.14.07 @ 2:32PM|#

Dan T., perhaps you would like to ban all activities that grab the attention of thrill seekers. People die on a regular basis from jumping out of airplanes, speeding down mountains on a pair of slats, and a host of other activities that are far more dangerous than gambling.

For an individual, yes, it is true that jumping out of an airplane is more dangerous than playing poker.

But for society, gambling is more dangerous in the aggregate. Everybody understands that "extreme sports" are pretty dangerous but many people don't recognize the dangers of gambling, as this thread illustrates.

|5.14.07 @ 2:33PM|#

See, this is the quality I expect from you, Dan. You do much better trolling one thread a day, rather than trying to do every thread on the blog at once.

Thanks, you are probably right. I should pick my battles.

|5.14.07 @ 2:35PM|#

I won't deny that there are problem gamblers who cannot control themselves, but the vast majority of people gamble only on a recreational basis

That's quite an assumption - since gambling these days can be done in secret, how could you know how many people have a problem with it?

|5.14.07 @ 2:40PM|#

But for society, gambling is more dangerous in the aggregate.

No, not at all. Loosing a lot of money only hurts the person that lost the money. Of course, there could be collateral damage. The loser's family could be out on the street unable to pay to feed their children.

If you want to argue that there is society-wide damage from gambling, then you need to go back in time until all the vices (immoral behavior) was banned. There can be collateral damage to the friends and families of anyone that drinks too much, smokes too much, consumes too many recreational drugs, has indescriminet sex with strangers, etc.

Most of the last 40 or 50 years of legal evolution has been towards the elimination of laws that criminalize personal, amoral behavior. This is progress.

|5.14.07 @ 2:41PM|#

That's quite an assumption - since gambling these days can be done in secret, how could you know how many people have a problem with it?

Ditto, Dan T., Ditto.

|5.14.07 @ 2:59PM|#

Most of the last 40 or 50 years of legal evolution has been towards the elimination of laws that criminalize personal, amoral behavior. This is progress.

It's more like a cycle - societies will clamp down on harmful personal activities (drugs, gambling, prostitution) and their impact on soceity will go down.

After a while, people start forgetting the problems caused by such activities in the first place and call for lifting the restrictions on them. Which eventually causes the problems again, and so forth.

And when you look at the world today, there seem to be no successful societies where gambling is not prohibited or restricted.

|5.14.07 @ 3:01PM|#

That's quite an assumption - since gambling these days can be done in secret, how could you know how many people have a problem with it?

Ditto, Dan T., Ditto.

But my claim is not that I know how many people have gambling problems right now. My claim is that by making it easier to gamble, more people will develop gambling problems.

|5.14.07 @ 3:04PM|#

What would you call a "successful society", Dan T.? A Tibetan Monastery?

Your posts always give me a good laugh.

|5.14.07 @ 3:08PM|#

But jimmy, my point is that even though many Reasonoids dismiss gambling as harmless fun, why has pretty much every culture restricted it so much?

|5.14.07 @ 3:09PM|#

Two points Dan T.

First, there is no legitimate state function in preventing individuals from participating in self-destructive behavior. That is one of the primary components of the libertarian philosophy. Do you agree or disagree that people should be free from government meddling in their private lives?

Second, when the state does ban a personal, self-destructive behavior, it must then build an infrastructure to detect people that break the law, prosecute them, and in many cases incarcerate them. This is the first step in a path towards a totalitarian, police state. The more personal (private) the behavior, the more intrusive the government must become to detect people when the break the law.

The whole point now is to break this cycle you speak of and get the government to leave people alone.

|5.14.07 @ 3:16PM|#

why has pretty much every culture restricted it so much?

That's called begging the question.

The nature of government is to control things. This attracts people that want to control things. These people gain personal satisfaction and a sense of power by controlling other people. This leads to an ever increasing set of rules that allow more control over more people. Note that nothing I said means that the people that run government are evil. In fact, the most dangerous people to freedom are those "good" people that truly believe they are serving the "public" good by preventing other people from doing whatever they feel like doing.

|5.14.07 @ 3:23PM|#

Dan T. | May 14, 2007, 3:08pm | #

But jimmy, my point is that even though many Reasonoids dismiss gambling as harmless fun, why has pretty much every culture restricted it so much?

I'm not trying to be facetious here Dan, but what do you mean by "pretty much every culture"?

That said, can you cite any "culture" that didn't restrict it based solely on their "moral" beliefs?

|5.14.07 @ 3:26PM|#

many Reasonoids dismiss gambling as harmless fun

Another erroneous comment.

Gambling is harmless for the vast majority of the population. For a very small portion, it can lead to devastating consequences.

The liberatarian view is to let the vast majority have their fun.

If you are that concerned about the small number of people that have bad outcomes, you can propose some form of safety net to help them out.

|5.14.07 @ 3:37PM|#

many people don't recognize the dangers of gambling, as this thread illustrates.

Including (apparently) you, Dan, as you haven't listed a single one.

Most of the last 40 or 50 years of legal evolution has been towards the elimination of laws that criminalize personal, amoral behavior.

I would have said just the opposite. The drug war, raising the drinking age, restrictions on speech in the name of "diversity", etc.

Jim Murphy|5.14.07 @ 3:40PM|#

But jimmy, my point is that even though many Reasonoids dismiss gambling as harmless fun, why has pretty much every culture restricted it so much?

Aside from the obvious theocracies--Iran, the state of Utah--I'd suggest that every country that tries to "restrict" gambling does so in order to profit from it. That's clearly the case with the US Government's crusade against Internet based gambling--they don't get their taste like they do with casino gambling, lotteries, horse racing, etc.

|5.14.07 @ 3:42PM|#

The real societal harm is the fact that the investigation of this non-problem has diverted resources away from investigating terrorism and other actual crimes. (and no, claiming that terrorists among other criminals are benefiting from unregulated gambling, as some who justified the original law did, is bullshit since that is a direct result of prohibition).

|5.14.07 @ 3:49PM|#

Most of the last 40 or 50 years of legal evolution has been towards the elimination of laws that criminalize personal, amoral behavior.

I would have said just the opposite. The drug war, raising the drinking age, restrictions on speech in the name of "diversity", etc.

No doubt the conservative wing of the Republican party has been trying to undo most of the gains in pesonal freedom. But in the bad old days:

Sex with someone other than your spouse was a crime. As far as I know, there is no effort to ban consenting, heterosexual behavior.

Pornography is pervasive and can be purchases on-deman through websites and satellite TV providers. No matter how much conservative hate it, it is way too big a business to halt at this time.

The drug war has been yo-yoing back and forth for a long time. Unfortunately, decriminalization never got as far as the sexual revolution and is clearly going the wrong way now.

I remember when you couldn't buy beer on sundays on the golf course. I also remember having to buy liquor and wine at a state owned store. While the drinking age has been raised, overall access has gotten easier for most adults (not true in some states).

The good news is that the Republican party is self-destructing right now. So hopefully this will slow the social conservatives down. Unfortunately, the liberal/progressives have decided that they need to "mother" us and to prevent us from smoking or eating the wrong food. Worst case scenario is that some progressives make a compact to with the social conservatives to start banning other "bad" behaviors in some kind of "you scratch my back . . " type arrangement.

John Rhoads|5.14.07 @ 3:52PM|#

See the provided link for a list of countries with legal gambling. As it turns out, most successful societies actually don't completely prohibit gambling...in fact the US opposition to internet gambling is getting them in trouble with the WTO as an attempt to restrict a form of trade that most of the world finds acceptable. (http://www.washingtonpost.com/wp-dyn/content/article/2007/03/30/AR2007033002161.html)

The US is actually more of an outlier on this issue than it is following the majority. Gambling is legal in most of Western Europe.

|5.14.07 @ 5:25PM|#

Dan T. is a troll.

Proof: no one who has read even one issue of Reason magazine would ever make the following totally assinine statement: "societies will clamp down on harmful personal activities (drugs, gambling, prostitution) and their impact on soceity will go down."

Even if he never read Reason, a little history makes that statement laughable. In fact, the opposite is true.