Online poker rooms and online casinos are two separate digital entities. Online poker rooms allow players to compete against one another with the operator taking rake from each pot. Online casinos offer games where the player bets against the casino in games like roulette, blackjack, and slots. Both types operate utilizing the same technological, legal, and financial means which can affect one another. If a legal event occurs with regards to online gambling, all operators pay attention.

Seizure Of Three Domains

On Friday, April 15th, 2011, the U.S. Department of Justice seized the domains of the three largest online poker room operators: Poker Stars, Full Tilt, and Absolute Poker. A warrant for the arrest of the owners has been issued along with a demand of $3 billion in penalties. However, the owners do not currently reside in the United States so they cannot be taken into custody at this time.

UIGEA 2006

The Department of Justice enforced this indictment under UIGEA 2006. One of the charges held against the operators is conducting illegal online gambling with the most severe being bank fraud and money laundering. According to the UIGEA, the funding of illegal gambling is a criminal offense therefore, since payments have been made from the casino to players, these operators are violating the law.

Payment Processors And The UIGEA

Due to this section of UIGEA, most online banks are wary of making financial transactions with online gambling sites. The payment processors used for financial transactions in the incident claimed to be online merchants that purchase various types of physical merchandise. According to legal experts, these are the primary aspects of the transactions that can get gambling operators into trouble.

Reaction From The Online Community

Of course, the actions taken by the Department of Justice have been condemned by the online gambling community. The three poker rooms at fault have not yet released any type of statement. Additionally, no statements have been made from other online poker rooms that allow U.S.-based players. Legal professionals are advising players to wait and keep an eye on this situation.

This event was not unexpected as online gaming software providers Playtech and Cryptologic and payment processor Neteller all withdrew from the American market when the UIGEA was enacted in 2006. Microgaming followed two years later after the Kentucky domain name case began. It is unpredictable as to whether this particular event will cause additional flight by operators from the online gambling industry.

Like the United States, Malaysia does not permit online gambling of any type. However, there are many unlicensed and unregulated operators that run casinos in the country. Customers join these casinos to wager on the games offered. Known as “mini-casinos”, these establishments are illegal and on the radar of law enforcement officials. Recently, five mini-casinos were raided and eliminated by police on the outskirts of Kuala Lumpur.

Noise Complaints

Business owners called the police reporting that these mini-casinos operate around the clock thus disturbing the surrounding businesses and residences. The police force had these establishments under observation for approximately a week before the raids. Police operatives had to conduct this operation with caution because if the perpetrators suspected their presence, they would have switched to other servers, hiding their tracks.

The Arrests

Five individuals between the ages of 25 and 35 were arrested with 65 computers being seized. Also, there were six customers detained for questioning. An officer revealed that one of the casino’s jackpot games had bets totaling almost RM 200,000.

The Russian Casino Issue

The online gambling problem in Russia is still largely a mystery. One publication reported an online casino had been eliminated by the police. This began a chain of rumors across all online gaming forums. Most of the rumors entailed a well-known operator as the center of attention. However, this operator continues to run the casino so it is a mystery as to whether the casino had been discontinued.

An Inside Source

Shortly after, the publication claimed that they receive information directly from a Russian Ministry of the Interior Spokesperson who notified the media that the online gaming site generated 200,000 Couples ($7,000) each day. According to the Spokesperson, the legal issue was beyond the gaming services provided. Instead, the operator is alleged to be involved in money laundering through foreign financial institutions.

Over the past ten years in operation, the online casino is said to have profited hundreds of millions of dollars illegally. The owner has allegedly been taken into custody with five employees while computer equipment was seized along with 27 million Roubles in cash.

Illegal casinos in Malaysia appear to be a large problem in the country. The police force seems to have their hands full. Due to the unreliable source of the Russia report, it is unclear whether any of these arrests and casino shutdowns has actually occurred.

The Spanish Government’s draft bill was recently released to the public so interested parties would have the opportunity to react and propose changes. Since its release, over 200 amendments have been proposed for the bill from numerous political parties, potential online gaming operators, and trade associations. For instance, AEDAPI, the Spanish Trade Association, believes most of their changes will an excellent online gaming foundation.

AEDAPI Suggestions

Among all the entities proposing amendments, AEDAPI has some of the best suggestions. Most Spanish political parties favor licenses being granted through an administrative body rather than through a procedure that could initially bring in more revenue but also keep desired operators away that cannot afford to initially overspend.

A Reduction Of The Tax Rate

The parliamentary groups support a tax reduction, down from the 25 percent proposed tax rate. These groups feel that a lower tax rate is important for attracting new licensees among foreign gambling operators. Spain must remain competitive with the other European Union countries. The 25 percent proposed tax rate is one of the highest in the European online gambling industry.

Undesirable Suggestions

There are several proposed amendments made that are not desirable. AEDAPI has identified these changes and deemed that they would harm the industry in Spain. The first is a call for a black period which requires applicants to cease operations before the awarding of a license. Also, operators would be barred from engaging in promotional activities during this period and be required to delete their databases.

AEDAPI has noted the adverse effects a black period could have on the Spanish gaming market. For instance, the black period would force gambling to go underground, therefore, Spanish players would seek unlicensed operators. It is estimated that 90 percent of Spanish online gaming operators are serious and willing to undergo audits. AEPAPI has also rejected the requirement for operators to have their servers within the country.

A Statement From The President Of AEDAPI

The President of AEDAPI recently released a statement saying, “The fact that a large number of amendments have been submitted by the different political groups, on the one hand, indicates that there is still much work to do but on the other, that we’re going in the right direction to build a positive framework.”

The Spanish government appears to be on the right track with excellent support for AEDAPI. They simply need to align their goals with the goals of those in the industry to find a beneficial compromise for all parties.