Is SatoshiDice illegal?

[JoelKatz]

Just to let you all know that online gambling is not illegal in the US. Players have nothing to fear from playing at online casinos or poker sites.

On the other hand, owning a portion of a gambling business that violates the laws of any State in which it conducts business is.
http://www.law.cornell.edu/uscode/text/18/1955

[bccasino]

Just to let you all know that online gambling is not illegal in the US. Players have nothing to fear from playing at online casinos or poker sites.

On the other hand, owning a portion of a gambling business that violates the laws of any State in which it conducts business is.
http://www.law.cornell.edu/uscode/text/18/1955

This only apply for onshore (US based) operations not offshore entities.

[skinturtle]

ok, i think bitcoin is not illegal even if you are operating a gamble website.

lets look at zynga poker. they are selling coins for money too but you are not allowed to change it to a currency.

gambling sites in bitcoin is also like this! so if bitcoin gambling is illegal then we can conclude that zynga poker is illegal and all other credit based game out there

[JoelKatz]

ok, i think bitcoin is not illegal even if you are operating a gamble website.

lets look at zynga poker. they are selling coins for money too but you are not allowed to change it to a currency.

It's not just they don't allow it, but they take technical measures to prevent it and don't intend it.

gambling sites in bitcoin is also like this!

They take technical measures to keep you from selling your bitcoins and don't intend you to make profits in national currencies? Try again.

so if bitcoin gambling is illegal then we can conclude that zynga poker is illegal and all other credit based game out there

Nope, sorry.

[RationalSpeculator]

Just to let you all know that online gambling is not illegal in the US. Players have nothing to fear from playing at online casinos or poker sites.

On the other hand, owning a portion of a gambling business that violates the laws of any State in which it conducts business is.
http://www.law.cornell.edu/uscode/text/18/1955

Sorry for bringing up an old post but I'm curious if you still hold this opinion that investing in sdice is risky from a legal sense. Do you still think that as an investor in sidice you risk being prosecuted?

On the sdice thread Erik recently replied:

Thank you for the update Erik. It would also be useful to have some clarity around your (and other owners / operators) residence, visitor and work status with respect to the USA. Could these be considered within the context of :

http://www.wired.com/threatlevel/2013/01/coder-charged-for-gambling-software/
and
http://reason.com/archives/2008/05/19/some-bets-are-off

for example ?

1) SatoshiDice is not a US company nor organization, nor is any part of it hosted in the US whatsoever.
2) I do not live in the US, though I am (unfortunately) a US citizen.
3) The couple other private owners are non-US residents and not US citizens.

What do you think of Erik's argumentation JoelKatz?

[RationalSpeculator]

In another thread someone posted some smart lawyer speak as to why sdice is not illegal:

It is pretty simple to me. I do not want to end up in court or jail.

Isn't that the irony?

The State, which usurps the ability to use violence and intimidation against all others within its given georgraphic area, makes a law which makes an otherwise harmless activity with no victim illegal. This causes dislocations in the economy because of individual human actions. The dislocations create market incentive for entrepreneurs to meet the needs of the market. The greater the dislocations the greater the profit.

With the State nudging its nose into every area of the economy it is only creating more and more dislocations. Creative entrepreneurs are going to be able to make a boatload of money meeting market needs.

For example, look at the problems the State has created, which led to the rise of AirBnB or Uber and is resulting in economic censorship like this in NYC or taxi commission in Chicago?

Now, take a system that makes it so the buyer and seller don't even have a record whereby they could locate the other as it would be hashed and encrypted. But there could still be rating systems and reputation along with dispute resolution via judge.me.

Previously, the market needed to go through banks to settle trade using fiat currency. Cash could only operate to a particular scale but was infeasible in larger amounts as the drug cartels have found out.

But now with Bitcoin being censorship-resistant it is the invisible glue the economy has needed to route around all the governmental economic censorship and maintain the ability to price and settle trade. And there is currently tons of economic censorship which has created huge dislocations and made tons of market opportunity for creative entrepreneurs who figure out ways to route around it. Those who figure out censorship-resistant ways to allow individuals to barter and trade will be rewarded handsomely like Satoshi Dice. And in the process, market needs are met and violence is decreased (with Silk Road there is no turf for dealers to defend and therefore no need for decapitations).

But part of me is sceptical and thinks 'yeah right, as if judges care about the laws, if bitcoin becomes a thread, sdice will be an easy target'. I even fear that investors risk being prosecuted. Am I exaggerating?  

[itsunderstood]

"lawyering" should be illegal.  The BAR association is a club of violence and control.  Most law is based on the Code Napoleon, and he was an asshead tyrant.

Law, is a weapon, masquerading as a service, for the most part.  Rich people can use lawyers as operators of law-as-weapon, and cause bankruptcy to people cannot afford counter-law costs.  Court, is a racket.

The mob is who runs gambling, and so, if you move in on their turf, they may break your kneecaps.  Try to get a lawyer to sue them, probably the judge will not see in your favor.  But the good part is this:  The mob will adopt bitcoins even slower than the gambling junkies.  So there is lots of money to be made of addicitons, via bitcoin.

[JoelKatz]

Sorry for bringing up an old post but I'm curious if you still hold this opinion that investing in sdice is risky from a legal sense. Do you still think that as  an investor in sidice you risk being prosecuted?

I do, though as a practical matter, this risk is very small. 18 USC 1955.

What do you think of Erik's argumentation JoelKatz?

I think it goes to the level of risk, not the legality. It comes down to an interpretation of 18 USC 1955(b)(1)(i), whether Satoshi Dice "is a violation of the law of a State or political subdivision in which it is conducted". That will come down to what locations are the ones "in which it is conducted" and whether it violates any laws of that subdivision. I can't specifically cite any subdivision in which it would be considered conducted nor any specific laws it violates, but if there are any, then anyone who "owns all or part of" the business is in violation of US law.

Also see 31 USC 5362(10)(A), "unlawful Internet gambling means to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made". While this doesn't apply to owners directly, like most Federal crimes, you can be charged with aiding, abetting, or conspiring to commit violations, being an accomplice to a violation, and so on.

As a completely passive owner, though, I would think the risk would be very small.

[Gator-hex]

US thinks offering online gambling to it's citizens is illegal,

if you do it, never fly into the US because you'll be arrested
http://www.cato.org/blog/uk-gambling-ceo-arrested-us-airport

However the World Trade Organization has said US is unfairly protecting it's domestic gambling market

the World Trade Organization authorized Antigua and Barbuda to violate intellectual property protections on American movies, books,
pharmaceuticals and other goods as compensation for United States policies that harmed the islands’ online gambling business.

http://www.antiguawto.com/wto/c2013_02_07_NYTimes_New_Front_Global_Wars.pdf

[Twerka]

Countries has a big debt with banks, this debt is pay with peoples taxes. If people wash money, then banks do not receive their money.

So banks put pressure on goverments and minor banks, they say:
- To goverment: "Make Gambling illegal, we want our share of peoples hard work".
- To minor banks: "Block wire transfer to bet websites"
- To credit cards and PayPal: "Block transaction to bet websites"


Now, about the legality of bitcoins, they are like the fantasy money the parks give you, or the money of some facebook games. This money is made for somebody else who is NOT a bank. And banks don't like competition, isn't it?

[RationalSpeculator]

Sorry for bringing up an old post but I'm curious if you still hold this opinion that investing in sdice is risky from a legal sense. Do you still think that as  an investor in sidice you risk being prosecuted?

I do, though as a practical matter, this risk is very small. 18 USC 1955.

What do you think of Erik's argumentation JoelKatz?

I think it goes to the level of risk, not the legality. It comes down to an interpretation of 18 USC 1955(b)(1)(i), whether Satoshi Dice "is a violation of the law of a State or political subdivision in which it is conducted". That will come down to what locations are the ones "in which it is conducted" and whether it violates any laws of that subdivision. I can't specifically cite any subdivision in which it would be considered conducted nor any specific laws it violates, but if there are any, then anyone who "owns all or part of" the business is in violation of US law.

Also see 31 USC 5362(10)(A), "unlawful Internet gambling means to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made". While this doesn't apply to owners directly, like most Federal crimes, you can be charged with aiding, abetting, or conspiring to commit violations, being an accomplice to a violation, and so on.

As a completely passive owner, though, I would think the risk would be very small.

Thank you so much JoelKatz for your critical view. I appreciate it highly.