U.K. Gaming Site Settles With DOJ

Tuesday, April 7th, 2009

Cato’s Sallie James reports that U.K.-based PartyGaming has settled with the U.S. Department of Justice. For a $105 million “fee,” DOJ will drop its case against the site for allowing U.S. users to gamble online prior to the passage of the 2006 Unlawful Internet Gaming Enforcement Act.

James calls this “semi-good news.” I’m having a hard time conjuring even that much optimism. A foreign company and its executives, operating out of a country where everything the company was doing was legal, was being prosecuted in the U.S. for violating an ambiguous law the Justice Department was using to  paternalistically prohibit Americans from consensually wagering online. Now in exchange for agreeing to stop doing business with Americans and paying a $105 million fine, the U.S. government has graciously agreed not to throw the company’s executives in prison.

Whether you’re scoring in terms of individual freedom, free trade, common sense, or the rule of law, it seems like a net loss all around to me.

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18 Responses to “U.K. Gaming Site Settles With DOJ”

  1. #1 |  Sean | 

    I have what may be a stupid question: what would it matter if they were convicted? All that really means is that they couldn’t safely travel to the states. Would it even qualify for extradition?

  2. #2 |  Aresen | 

    Sean

    In general, a country will not extradite it’s citizens (or even residents) to face charges which are not a crime in the country of residence.

    For example, the Vietnam era draft dodgers could not be extradited from Canada to the US because Canada did not have conscription.

  3. #3 |  Omar | 

    Do we try people in absentia in this country? I hope we are better than the Italians.

    I seem to remember one of these British gambling exec getting arrested during an international transfer in a US airport. Same company? I would look it up, but I’m going to go get drunk.

    Holler!

  4. #4 |  Nick T | 

    I thought we weren’t looking backward, only forward in this country?

  5. #5 |  MacGregory | 

    Maybe the U.K. needs a Monroe Doctrine too.

  6. #6 |  Dave Krueger | 

    “…operating out of a country where everything the company was doing was legal, was being prosecuted in the U.S. for violating an ambiguous law the Justice Department was using to paternalistically prohibit Americans from consensually…”

    That’s just isn’t cause for surprise, nor is it even a precedent. They did the same thing to Noriega. Those execs should just be happy we didn’t invade their island and kidnap them in the spirit of Dog the Bounty Hunter (except without moral rectitude and dashing good looks).

    Sovereignty is not a factor. The U.S. is the world’s policeman. It will arrest whomever it wants, abiding faithfully to it’s single guiding principle: Because we can.

  7. #7 |  JS | 

    Amazing arrogance. Does our government basically claims jurisdiction over everything and everyone on the planet?

  8. #8 |  Chris | 

    So basically, the government just imposed a retroactive tax on the profits PartyGaming was making from US players. I guess its OK to do it retroactively, but the US will somehow go to hell if they just drop the charade, legalize online poker, and take their cut up-front.

  9. #9 |  Marty | 

    DOJ must own all of the Sopranos videos!

  10. #10 |  thomasblair | 

    I’m having a tough time understanding this. In first paragraph you say that PartyGaming allowed US users to play “prior to the passage of the UIGEA” and in the second paragraph that the US was prosecuting for “violating an ambiguous law the Justice Department was using to paternalistically prohibit Americans from consensually wagering online” (emphasis mine).

    Now, we all agree that the UIGEA is bollocks and this prosecution even more so, but I’d think it’s rather important (legally speaking) whether PartyGaming being prosecuting for actions before or after the passage of the UIGEA. Which one is a typo?

  11. #11 |  Radley Balko | 

    #10 —

    Sorry, no typo. Just wasn’t clear enough about which law I was referring to. Prior to the UIGEA, the DOJ was interpreting the 45-year-old Federal Wire Act to apply to Internet gambling.

  12. #12 |  J Riordan | 

    I was trying to do a little research into the UIGEA recently.

    Did you know that this was one of the principle issues in Senator Jon Kyl’s office for the last few years? Since 2005, their staff seems to have spent more time on this than on anything having to do with the economic calamity.

    In other words, while the financial world was falling apart due to the reckless “gambling” by too-big-to-fail Wall Street firms, Kyl’s office was more concerned with outlawing the online wagering of individual Americans.

    I called Tom Humphrey in Jon Kyl’s office (202-224-4521) two weeks ago. I wanted to know how much staff time they have been devoting in the last few months to the internet gambling issue. Humphrey is the staffer who is “in charge” of this issue. He refused to answer. He promised me someone else would call back but they never did.

    It seems that even now, as the financial world crumbles, it is more important for Jon Kyl to eliminate the terrible scourge of internet gambling than to address the “gambling” of too-big-to-fail firms.

  13. #13 |  JS | 

    J Riordan-Good work! Way to hold that guy accountable!

  14. #14 |  Cornellian | 

    “In other words, while the financial world was falling apart due to the reckless “gambling” by too-big-to-fail Wall Street firms, Kyl’s office was more concerned with outlawing the online wagering of individual Americans.”

    Call me cynical, but I’d be checking his list of contributors for casino and racetrack owners and executives.

  15. #15 |  Nando | 

    OK, I’m no lawyer, but this seems to me to be somewhat similar to the girl who was selling her virginity on ebay. How so, you may ask? Here are the similarities:

    In the case of the woman selling her virginity, when people protested that prostitution was illegal in California (where she was posting the ad), the DOJ and others said it was LEGAL because the exchange of money and services was to take place in a location where such things are legal (in the Bunny Ranch). So, it was legal for her to enter into an agreement whereby she gave up sex in exchange for money so long as the money and sex were exchanged where it was legal to do so.

    Now, that brings me to Internet gambling. If the poker site is legal in the UK and the exchange of services for money occurs there (the company receives the money in a UK bank, for example) and the action is taking place on a server in the UK, then where is the crime? All actions are being performed in a location where this is legal.

    Again, I’m not a lawyer, I just stayed at a Holiday Inn last night.

  16. #16 |  Sallie | 

    Radley — perhaps my blog post was not sufficiently clear, so let me be so now. No-one loathes this stupid policy more than I. The whole thing stinks, and on many grounds.

    I was simply trying (and, apparently, failing) to make the point that dropping the prosecution was better than not dropping it, and that if it signals a broader commitment to getting rid of the UIGEA altogether, then that is a good thing.

    “James”

  17. #17 |  Dakota | 

    Don’t forget to get your tickets to the 32-state Powerball tonight!! Up to 143 MILLION!!!!

  18. #18 |  Dave Krueger | 

    #15 Nando,

    The difference between the two cases is that no one could figure out a way to make money by preventing the girl from selling her virginity on ebay. When they do, they will declare it illegal. And you can be sure that the parties that will have least to say in the matter are the people involved in the transaction. Such is life in the land of the free and the home of the brave.

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