Online gambling fight up to the 'little man'

The idealist in me would like to think that large companies with lots of money would use some of it to help out the greater good or fight for what they think is right. The realist, however, knows that companies mainly look at the bottom line, and the bottom line for staying in the United States to fight online gambling charges or an online poker ban is a lot more costly than just settling and taking their business elsewhere.

That's why it's going to take the "little man" to make big changes for online poker and gambling in the nation.

While many online gambling companies have kicked in funds to help Antigua and Barbuda's efforts to change the U.S. online gambling laws at the World Trade Organization level, some have actually been presented with direct opportunities to challenge the laws as well.

BetonSports was one of the first to see its people and its business attacked. It began with the arrest of then-chief executive David Carruthers for racketeering, fraud and tax evasion charges related to the online gambling business.

Several other were also arrested in connection with the company, and BetonSports itself faced federal racketeering charges in the country, despite being based outside the United States.

Not only is it headquartered in another country, but BetonSports' business is legal where it is based. Its only "crime" was allowing U.S. players to access its site to play poker and place other bets.

It was a perfect opportunity for a company to take a stand and challenge the legality of the online gambling ban in the United States. Instead, BetonSports took the easy, less costly, route of pleading guilty and paying fines - and also agreeing to provide evidence against its former chief executive and its founder, who are still facing charges.

Another giant in the online gambling world, NETeller, also had an opportunity to directly challenge the laws in the United States.

It too is based outside the country and provides an e-wallet service that allows customers to transfer money from their banks to online gambling accounts or other online shopping. Its co-founders were arrested earlier this year, and the company also underwent investigation for promoting illegal online gambling by allowing the transfer of funds to online gambling sites.

Again, it's a business based outside the United States in a place where its activities are considered perfectly legal. Its only crime: allowing U.S. residents to use its service.

NETeller knew it was going to be in a bit of trouble once the Unlawful Internet Gambling Enforcement Act was passed last year specifically targeting the financial transactions for online gambling. It started shutting down online gambling transactions for U.S. customers and then in January its two co-founders were arrested.

With Stephen Lawrence and John Lefebvre facing charges of conspiring to transfer funds for the purposes of illegal gambling, and NETeller itself under a microscope, the company chose to cooperate with the case against its founders and pay a fine rather than fight the charges.

Companies like NETeller have the money to truly contest the online gambling ban in court and try to make a change. But, as I said, the bottom line is about money. A $136 million fine is apparently more appealing than a court battle which not only costs them legal fees, but can put a dent in the company's reputation and further affect already falling stock prices.

And yet, there are people out there willing to take on these laws on their own.

Lee Rousso filed a lawsuit against the state of Washington because of its online gambling ban. As the state's representative for the Poker Players Alliance and a proponent of the game, he stepped up to the plate to challenge the law making playing poker online a felony.

He argues that the online gambling ban is unconstitutional, and is waging his one-man war against it at the state level.

Another person taking on the issue at the state level is online poker player Tony Sandstrom in California. His petition to set up a state-owned online poker site in California has been garnering media attention.

His proposal would have a site set up with 45% of the rake taken from the games going to teachers' pensions in the state, and another 45% of the rake going to veterans' homes, mental health programs for military personnel and the purchase of hearing aids and artificial limbs for veterans.

The petition even addresses problem-gambling concerns by allotting the remaining 10% of the rake to fund gambling addiction programs.

In order to qualify for the ballot, Sandstrom will have to collect 430,000 signatures on his petition by the end of the year. The odds of that happening are still better than the odds that some of the poker sites being threatened with legal proceedings will step up and fight.

PartyGaming, owner and operator of PartyPoker, as well as 888 Holding, operator of Pacific Poker, are the most recent online gambling companies to make the news for problems with the United States. Apparently they're both in talks with the U.S. Department of Justice to clarify legal issues they may have with the United States, even though they've both shut down their sites to U.S. residents.

It's pretty much expected that the two companies will try to settle the issue rather than head into a court case that could be even more damaging to their stock prices.

There is one small organization trying to let out a big roar against the UIGEA. The Interactive Media Entertainment & Gaming Association (iMEGA), a not-for-profit corporation headquartered in Washington D.C., filed a lawsuit against the U.S. government to challenge the law. The case has an initial hearing date of Sept. 5, though the U.S. government has asked for an extension for responding to iMEGA's complaint.

It's an honorable effort on iMEGA's part, but in all honesty I still find it a stretch to believe that one association will be able to take down the law. The "Average Joe" fighting at the state level will be what it takes to get things changed.

Gambling has always been something that the individual states have control over within their own borders. That's why states have varying laws regarding gambling, including legal age and types of gambling allowed, and why in some states it's completely banned.

Say iMEGA manages to get the UIGEA undone, and the federal government goes ahead with Barney Frank's legislation to legalize and regulate online gambling - the states still have the ultimate power to decide if they want to legalize it for their residents. Washington state could still keep its online gambling ban while Nevada welcomes online gambling so the casinos in Las Vegas can get in on the action.

If people want to continue to play poker online, they've got to start taking the issue to their state governments as well as continuing to put pressure on federal representatives to get the UIGEA changed. It's not going to be easy, and it's probably not going to be quick, but it's never going to happen if we continue to sit back and hope that someone else will work on the problem or that the companies that make money from you playing will step up in order to protect their income sources.

There are still millions of people in other untapped markets out there whom the poker sites can potentially target to make up for the loss of U.S. trade. They'll take the easy, more affordable route, because that's just good business.

If poker players want to play online in a completely legal environment, they're going to have to be the ones to take the hard route and make it happen.

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