In on ongoing discussion about whether or not a "rake free" poker site would actually be legal in the U.S., I felt compelled to participate.
The thread is here, but I wanted to share my most recent post with you all, and ask for thoughts/comment. Am I smoking crack here, or what? I don't think I'll actually get a good explanation behind the alleged legality of such a site from anyone in that thread, but I know there's some really bright poker bloggers here. And unlike lil-legal-beagle me, actually some that have been to law school.
Anyway, here's the post:
The UIGEA does not differentiate between poker-only sites and sites that combine poker with a sports book.
At any rate, I'd love to see a rake free online poker site. Hell, I'm just hoping there's any sites to play on a few months down the road. I'm just saying there's no chance in hell anyone's ever going to actually open one up under the current legal environment, because anyone who does under this environment is risking the wrath of the DoJ.
For all those who beg to differ, I kindly invite them to be the next to open up a site.
You know, it's like all those who rampantly support the invasion and occupation of Iraq. When I ask them why, if they support the war so much, and think the US is doing the right thing, they didn't volunteer and enlist, I get nothing but "uh...uh...uh...," or worse, some lame ass excuse like, "well, I can't quit my job", or "I'm still in college". In other words, for you folks who think it's stone cold legal right now, why aren't you putting together such a business?
It's easy to sit and sideline quarterback. And it's certainly possible that no near-future prosecutions result in convictions. But no smart businessman is even going to contemplate entering the online poker space in the US at a time when those businessmen are getting picked off like target ducks in a shooting gallery.
As for the Wire Act, it covers gambling. And, it is clear that poker involves gambling. Now, I'm not going to sit here and pretend that I know each and every minute detail about the application of the UIGEA. However, the implications of the UIGEA to the banking sector that must process the transactions funding poker sites and accounts are obvious. So you set up a rake free site. How do you fund it? Your bank's not going to accept a transaction funding that site any more than they will a transaction to FTP or PS. You think an argument that "rake free means it's legal" is going to hold water with Citigroup's 1000 strong legal department?
I'm sorry, I'm not trying to get into a pissing contest with you. I am not an attorney. But the fact is, I am in fact, in the legal industry, and, while I'm not an expert in federal regulatory law (I work in complex commercial litigation), I think I've got a pretty decent understanding of why there is no difference in the eyes of the Wire Act or UIGEA between a raked poker site and a non-raked poker site.
The fact that the OP is asking why the PPA doesn't actually create and run a poker site themselves is instructive here. And while I entirely agree that current state law vis-a-vis poker (whether online or off) is a veritiable varietal feast of differences, none of that makes a rake free site legal, where the financial transactions involved would appear to violate other federal laws. Remember, this isn't really even about whether it's legal or not for you or I to play a game of poker online, it's about whether or not it's legal for those sites to operate and execute transactions involving money.
Anyway, if you can make a colorable argument as to why a rake free site would be legal under existing law, I'm all ears. I'd like to be encouraged about the prospect of continuing my own ongoing FTP odyssey.
But if there is one inalienable truth about 2+2 (and probably all poker forums...I only cite 2+2 because it's the only one I frequent), it's the fact that the overall online poker playing populace is, for the most part, far too pollyanna-ish about what it is they do and its current legal predicament. If all the information folks use to form their opinions on comes from poker forums, poker websites, poker blogs, etc., you're only going to get the analysis of others in the poker community - *all* of whom have a vested interest in the outcome, and *all* of whom are subject to have their analysis and opinions colored by that vested interest.
Right now, Capitol Hill has no stomach to change the UIGEA at all, and frankly, their priorities are better placed elsewhere. (Contrary to popular belief, a poker carve out of the UIGEA should only be about the 83rd highest priority on your elected congressman's list right now, given the war, energy issues, etc.) The current DoJ administration is clearly on some kind of crusade that won't end until at least the next presidential cycle. These two factors make it pretty much dead in the water, any idea of a company stepping in and filling the gap that's being created by poker sites and transactional companies closing themselves off to the US.
Anyway, I'm really not trying to sound (very) snarky here, but comparing the legality of a home poker game to the legality of an online rake free poker site is just silly."