Following article from the Las Vegas advisor when this was first announced.
As previous poster stated, the sites have adapted by useing free rooms, third party pay, etc. Only thing to watch is your states laws regarding internet gambling. i.e. Washington state its a felony.
The Great Internet-Gambling Debacle
by David Matthews
On Sept. 29, 2006, in the middle of the night, Congress passed the Safe Port Act, in order to provide more stringent rules to protect 361 U.S. seaports from potential terrorist shipments. How is this gambling news? Pages 213 to 244 of the Port Security Act included the Unlawful Internet Gambling Enforcement Act of 2006. This was an unrelated attachment added to the bill at the last minute by Senate Majority Leader Bill Frist (R-TN). The bill was approved by the conference committee and sent to President Bush with neither a debate nor a formal vote. Most congressmen weren’t even there for its approval. It was one of the last acts of the Senate prior to a five-week recess. Online message boards that cater to online players have been on fire with the news, with some of the threads being the lengthiest in their histories. The comments range from doom and gloom, with some posters predicting the end of the world as we know it being near, to a flippant "who-cares" attitude from those who think the law will have no effect (or won't even be implemented). At any rate, there's a great deal of confusion about the future consequences. I've read a lot about the bill, including the full 31 pages of the online-gambling rider itself, and with the proviso that I’m not an attorney, I’ll try to summarize the situation here.
The bill, in recognition of the fact that most online-gambling operators conduct their business outside U.S. borders where they can't be apprehended, goes after money transfers-namely, credit-card and EFT-bank transfers-between Americans and the gambling sites. If you can't get your money into and out of the online sports book, casino, or poker room, you can’t gamble on the Web. At least, that's the theory. So the law is aimed at preventing these transfers, by imposing unspecified fines and/or a prison term of "not more than five years" for any person or entity, including a financial institution, that is found to be in violation of the Act.
In practice, of course, most credit- and debit-card issuers have declined online-gambling transactions for years. Not a lot should change there. What could change is electronic transfers between U.S. banks and intermediary payment-processing companies, such as NeTeller, Citadel, and Firepay. These aren’t gambling sites; they’re only intermediary money-transfer companies. By the letter of the bill, American banks might not have to cease transacting with the intermediaries, only directly with gambling sites, such as PartyPoker and Bodog. However, it’s my belief that most U.S. banks will cease doing business with these companies, which will be devastating to the industry in that it will be much more difficult to get money in and out of the sites.
Many observers are posting messages stating that banks can’t possibly monitor all EFTs, as millions of these transactions occur daily. While monitoring EFTs would be a challenge, those three payment companies in particular are big and well-known. Hence, the banks could block them only, then continue to block new ones as they find them.
While NeTeller and the others don't offer online gambling themselves, they work primarily with online-gambling companies. Banks may not have to block EFTs to these companies by the letter of the bill, but they probably will to avoid any potential entanglements. After all, why take any chances? The bill also forbids check transfers. The bill prohibits gambling operators from accepting deposits by check which means your bank must deny sending funds and your checks will be returned. The provision is only written to affect gambling operators from accepting payments by check. It does not preclude payout by check, so you may still be able to receive funds by check but not to send funds by check. It’s also unlikely that a bank will issue a certified check made out to an online gambling site.
From a practical standpoint, there's a possibility that, at some point, American players will run out of avenues for getting their money back from a gambling site. If EFTs to and from these intermediary sites are blocked by your bank, and checks aren't accepted, anything short of setting up a bank account in a foreign country may not work. It's also doubtful that Western Union will be an available option, as it has already been blocking known online gambling transfers.
Interactive Computer Services
One new twist to this bill, not included in previous attempts to stem the tide of online gambling, is the mention of "Interactive Computer Services." These are the companies that provide Internet access, such as AOL, Earthlink, Cox, Comcast, AT&T, and others. This definitely means that these ISPs cannot allow a gambling site to set up shop on their services. That's understandable and probably not so controversial. What is controversial is the fact that the ISPs may have to deny you access to the online gambling sites. For example, you’re an AOL user and you type in PartyPoker.com. A screen comes up informing you that you're not allowed to view that site. This would be Internet censorship, which, until now, has been taboo. (The Italian government instituted a similar policy this year when it ordered all ISPs in Italy to block access to about 600 listed companies that were online gambling sites operating without licenses from the Italian government.)
The wording in the bill states that the ISP will be given a list of the offending sites and instructed by the Attorney General to prohibit access. However, the ISPs are not responsible for identifying and blocking sites on their own. The way it will most likely work is that the AG will inform AOL to block member access to PartyPoker.com. If AOL doesn't comply, they’ll be subject to the aforementioned fines and/or five-year prison sentence.
There are also stipulations for Web sites with hyperlinks to online gambling. So even an informational portal site that doesn't host gambling but does link to gambling sites will be a target. Sites like CardPlayer.com, CasinoCity.com, and my site, LasVegasAdvisor.com, will be impacted.
Several big players in the online-gambling industry, such as PartyGaming and NeTeller, are publicly traded companies on the London Stock Exchange. A strong indicator of how effective a bill like this will be is what happens to the stocks. On the first day of trading after the bill’s passage, online-gambling stocks plummeted by 50%. Two large publicly traded online-gambling companies, 888.com and PartyGaming, have indicated that they will cease operations with U.S. customers upon the bill being signed into law. If the stock market is any indication, it can assumed that things will only get worse for online-gambling advocates before they get better.
Critics of the bill point to its exemptions for horse racing, online lotteries, [Fantasy leagues?] and Native American gambling. Bill detractors say, "So I can bet on horses or choose some random numbers against a huge house edge, but I can't participate in other forms of gambling? That’s hypocritical.” Of course it is, except that the bill wouldn't have passed without these exemptions. The supporters of the bill got as much prohibited as they could. Hypocrisy or politics? For many, they're synonymous. Either way, for people who approach this issue with logic, it's clearly a head-scratcher.
Why did this bill pass? Ask its supporters and you'll hear that underage people are gambling, or that online gambling leads to addiction, or that it's used to launder money and fund terrorism. There's very little support for any of these arguments when one looks at the available facts. It's just politics. You know it. I know it. Everyone does.
It boils down to the Republican party pandering to the grass-roots conservative voter base prior to this November's elections. More pertinent, perhaps, Senator Frist has presidential ambitions for 2008, and Representative James Leach of Iowa has been one of the most active Congressmen to support prohibition of online gambling. What’s the tie-in? Go to Wikipedia.org and type in "Iowa Caucus." The first line you see is this: "Since 1976, the Iowa caucus has been the first indication of which candidate for President of the United States would win the nomination of his or her political party at that party's national convention." So with this move, Frist isn’t only courting the conservatives, he’s currying the favor of Iowa’s Jim Leach.
The bill has a provision for the Federal Reserve, the Department of Treasury, and the Department of Justice to get a 270-day period to draft regulations. That's 270 days from when the President signs it into law. This doesn't mean, however, that it’s business as usual for everyone for 270 days. The law is effective on signature, it’s the drafting of the regulations that will take time-and that 270 days is the maximum amount of time. Your bank may make changes within a week, a month, or two or three months. U.S. Web sites that have advertising or affiliate arrangements with online gambling sites will have to make immediate changes that likely include termination of these affiliations.
The bill doesn't appear to affect players. You're not going to prison if you have an online-gambling account (not yet, anyway, and again, I'm not a lawyer). But again, the more pressing concern is how easily you'll be able to transfer money out of Web-based gambling sites down the road. Should you take your money out of these sites immediately? That's a personal choice. Insiders and gambling pros will always find ways to move their money, so they're not panicking. But if having yours tied up with so much uncertainty attached causes you anxiety, then you might want to withdraw, or reduce your balances.
The fantasy football exemption states that prizes must be determined and stated beforehand and not based on number of players or entry-fee amounts. It also states that results can't be based on a team's performance, only on an individual athlete's performance. Finally, it can't involve point spreads. It's likely that any fantasy site you participate in will know and comply with these regulations.
The U.S. is still embroiled in a World Trade Organization dispute with Antigua. The WTO ruled that America’s pre-existing laws made it non-compliant with fair-trade treaties. This port security attachment, if anything, makes the U.S. less compliant than previously. The U.S. hasn't worried about Antigua's dispute. It's taken an ignore strategy, which has worked so far. But if larger countries, such as the U.K. and Canada, were to go after the U.S. for trade violations over this issue, a precedent has already been set and the U.S. would probably lose again. Losing a WTO dispute to Canada or the U.K. would be a much bigger deal than losing to Antigua. Our laws put us in direct violation of free-trade agreements under the WTO and it’s possible that a first-world country will take this battle to the WTO. The U.S. could maintain its ignore strategy, but it wouldn't be quite so easy.
Interestingly, the bill specifically exempts all trades under the Securities Exchange Act. In other words, it doesn't apply to stocks and bonds, which are part of the most extensive online-gambling system of all. Investing in Enron is better than gambling online, at least according to the bill. Some people have said that this bill should not have any effect on online-poker players, who bet against other players and not the house. In poker, the house isn't "booking" the bets. Semantics and theoretical arguments might be interesting to toss around, but I'm certain the bill will be applied to poker sites as well. Online poker was frequently discussed during the creation of this bill, and any court would point to a multitude of documents indicating that poker was considered within the intent of the bill. In addition, the argument that poker is a game of skill and not chance, while theoretically potent, would probably hold no water.
What does it all boil down to? The key points are as follows. In the short term, it may be close to impossible for Americans (who don’t have offshore bank accounts that aren’t governed by this law) to play online, and American informational Web sites that have online gambling ads and affiliate deals will have to curtail these relationships. How long this condition lasts may be related to whether or not banks can track and block all specified transactions, especially if the public shrugs and persists in making lots of them, as well as the fallout from the many Americans who want to continue to gamble online. And an added wrinkle will materialize if the U.K. disputes the law through the WTO. Various combinations of the above will ultimately lead to the U.S.A.’s new order in Internet gambling.