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Author Topic: Running a site legally (OR how to do it and not get a boyfriend?)  (Read 6313 times)
ErebusBat
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June 08, 2012, 03:20:49 PM
 #21

My worry is that there is a judicial ruling stating that the UIGEA only applies to sports betting; however the US Justice department (the one responsible for the actual prosecution) has publicly stated they disagree and will go after ALL gambling sites.

There is no such ruling.   The WIRE ACT applies only to Sports betting which is why the UIGEA was passed.  The UIGEA clearly applies to any form of gambling.  A coin flip side would fall under the domain of the UIGEA.  The question that remains undecided is does the UIGEA apply to tx involving Bitcoins? 


You are correct, I mis-typed.  Thank you for clarifying TangibleCryptography.

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IveBeenBit
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June 08, 2012, 07:42:17 PM
 #22

A couple good things to note about the BetOnSports case.
1. BetOnSports was offshore, in the UK, but it's a incorrect to say they were completely outside the US. Actually the majority of their business was to and from the United States. "Completely outside" would mean the business was both located outside and marketing only outside the States...that it stayed completely away from the country. Which it didn't.
2. Carruthers was on US soil when he was arrested.
3. Sports betting is a violation of the Wire Act - no other form of online betting is so regulated. This makes for an extremely clear-cut, made to order case. In essence the case against him was no different from the case against any bookie who takes bets on the telephone over interstate phone lines.
4. The way UIGEA regulates poker, is by payment transfer for the purpose of gaming; not the gaming itself. The Wire Act makes no such distinction and goes directly after the bookie. So the methods of payment transfer BetOnSports was using didn't matter, and booking all their bets in Bitcoin wouldn't have changed anything.
5. No one knows whether US federal anti-gambling money transfer legislation (specifically UIGEA) applies to Bitcoin or not; no lawyer has yet written a legal opinion about it, much less tested it in court.

and 6... buy the next issue of Bitcoin Magazine where I've been told we might find out some interesting info on that very subject (and for all you non-US folks, we'll be putting a bonus code in our ad there, too).

*Edit: about #6, I haven't read the article and I don't know what's actually going to happen or not with it, just that it's a topic of interest.

ssaCEA, can you explain why you don't accept bets from US residents? My understanding of the gaming laws are similar to yours - that the Feds went after the poker sites because of the games they were playing with payment processors to get around UIGEA. Doing business in BTC seems like an easy and obvious way to not violate UIGEA.
ErebusBat
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June 08, 2012, 07:47:38 PM
 #23

ssaCEA, can you explain why you don't accept bets from US residents? My understanding of the gaming laws are similar to yours - that the Feds went after the poker sites because of the games they were playing with payment processors to get around UIGEA. Doing business in BTC seems like an easy and obvious way to not violate UIGEA.

Or to piss them off enough to come after you.  Anyone in the US that really wants to play at strike sapphire can, they just have to put a little work into it and it isn't the sites fault the user purposefully circumvented their checks.

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June 09, 2012, 09:23:47 PM
 #24

First of all, anyone in the US playing at our site is strongly advised not to do so because we may ask for ID verification at any time to prove you're in the country of origin of your account and your IP address.

There's no "wink-wink, nudge-nudge" here. We really don't want Americans on the site.

@IveBeenBit. Here's our perspective.

1. We really don't know if UIGEA applies to running poker games in Bitcoin. No one does, at least until it's been to court. My best guess is that it doesn't violate the letter of the law, but that the Justice Department will certainly find a way to make it prosecutable if it takes off. In my opinion the shutdown of FullTilt and other sites was commissioned by the Vegas and Indian gaming interests, who within the next 1-2 years will sweep into a brand-new online poker market in the US. They're going to impose a 20% tax or more, meaning rakes on poker games are going to go up to 20-25%. And they have a captive audience, because poker players in the US are basically like poker players in prison who value cigarettes at $1 a piece. Anyway, the USDOJ is basically their bitch, and the last thing any of them want is to have some startup site operating in Bitcoin, and they will bend or break any law to nail the fucker down before D-Day when Caesars and Wynn open national online poker rooms; which is coming really soon.

2. We are not only a poker website, but a full casino. No one credible has done a legal survey of what it means to operate a poker site in Bitcoin under state law in the 50 states, let alone blackjack and roulette games. However some states make it fairly clear that it's criminal to accept anything deemed of value on a game of chance. Leaving aside whether poker is a game of chance or not - which still hasn't been fully decided under states' laws - we don't make money on poker; our revenue is from games of chance. So in states like Washington, Louisiana and Minnesota, we would almost certainly be illegal no matter what currency we took. These states have the power to extradite people from other states, and in theory the power to even extradite people from other countries.

Therefore it's not worth the risk. We'll be happy to see what happens with inifiti poker and if it turns out the USDOJ can't make a case against them, we'll move our own poker software into the market. Our software is available for licensing and we hope that small operators in Nevada, New Jersey and Washington, DC will consider licensing it for legal games, as it's superior to much of the software out there and available at a significantly lower price and overhead. But there is no question that we will bar the US market for the foreseeable future, because the tangle of laws in place between states and the federal government would make involvement irresponsible for us, our investors, and ultimately for our players whose money we hold in safekeeping.

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June 09, 2012, 09:36:13 PM
 #25

And Tor hidden services won't work for our types of games. Anyway, that's hardly impenetrable. Part of the reason people trust our site is because I make myself a known, public person who takes ultimate responsibility for resolving issues and holding their money. I wouldn't trust my coin to a totally anonymously run .onion site, and I wouldn't tell anyone else to.

What you have to understand is that we're in the business of selling our software, and running a Bitcoin casino is a sideline...one that brings a whole lot of hassle and next to no money. So not only is it not worth our time to start trying to push legal boundaries with it; I'd be fine cutting all this shit loose tomorrow if there were even a whiff that something we'd done had violated the law.

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June 09, 2012, 10:10:47 PM
 #26

I'm glad that we have not this problem in Germany.

But the Federal Financial Supervisory Authority has already classified the Bitcoin.

http://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Merkblatt/mb_111222_zag.html
in english i doesnt found it
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June 14, 2012, 06:18:59 AM
 #27

I suspect there has been some confusing between cloudfront and cloudflare.  I've never heard of cloudflare.  Cloudfront is Amazon's CDN product which SatoshiDice website is hosted on.

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June 14, 2012, 06:24:09 AM
 #28

So I have some ideas that I think could make some BTC; however I am hesitant because of the US Government's hostile attitude toward online gambling combined with bitcoin.

I see that our favorite SatoshiDICE is registered in AU (although it is a .com so the US govt could seize it) and they use cloud flare as a buffer that is all good and what not; however isn't CloudFLARE a US company?  Couldn't they be compelled to release what IP (and therefore the location of) the actual server?

Even sites that are 100% outside the US they don't like.  Look at http://en.wikipedia.org/wiki/Online_gambling#United_States, the BetOnSports paragraph.  The guy wasn't even planning on going into the US and they still got him.  Who knows, the plane might have actually be diverted on purpose when it was found out that David Carruthers was on the passenger manifest.

How can one legally put their gaming ideas to work?

Someone in AU want to partner?

the government is the least of your worries running a gambling site.
https://www.pcworld.com/article/116975/online_extortion_ring_broken_up.html

Introducing constraints to the economy only serves to limit what can be economical.
ErebusBat
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June 14, 2012, 11:12:35 PM
 #29

 Shocked

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