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Bank employees began getting suspicious when they saw many large checks issued by a Naples man’s company, according to an ongoing federal investigation.


When questioned, customers cashing them explained the MCM Capital Management checks were payments from Internet Poker gambling winnings.


When bank tellers and managers saw millions of dollars in wire transfers going in and out of Michael Olaf Schuett’s bank accounts, many shut down accounts for the hundreds of companies he owns after discovering they were linked to gambling, federal documents say.


For FedEx employees, it was the roughly 51 packages being mailed daily from his Chesapeake Avenue home that made them question what the 29-year-old was doing there.


“Federal Express employees became suspicious of Schuett’s activity when Schuett began mailing over 150 parcels per week,” says a federal complaint alleging Schuett is involved in money laundering. “FedEx employees opened several of the parcels and determined that each contained a check.”


Those are the allegations outlined in a 39-page complaint filed in U.S. District Court, Fort Myers, that shows Schuett is the target of a federal investigation.

Schuett, also known as Schütt, a German national whose visa expires in April, is being held without bond in Lee County jail after a federal judge ruled Monday he was a flight risk.


U.S. Magistrate Judge Sheri Polster Chappell cited his limited ties to this country, that he’d been married only a month to a woman he’d known for nine months, that he lives in Germany, and has no employment ties here.


“The court further takes into account the amount of money involved in the alleged crime and the number of bank accounts used to conduct the scheme,” Polster Chappell wrote in her ruling, citing 40 accounts opened at Bank of America.

In denying bond, she also pointed out Schuett was planning to purchase a house using illegal funds. “The house was going to be put in only the defendant’s new wife’s name,” she wrote.


Federal investigators seek to seize nine bank accounts Shuett holds under his name and company names: MCM Capital Management Corp.; MI Global Inc.; South Naples Escrow Co.; Southwest Florida Payroll Co.; Woodhouse Systems; Mathew’s Trade Corp; and Internet Payment Services Group Inc.


As of Feb. 12, the complaint says, there was $2.13 million left in accounts at Bank of America, Ironstone, SunTrust, Regions Bank, BB&T, Iberia Bank and Royal Bank of Canada.


Schuett’s federal public defender, Frank Zaremba, could not be reached for comment. Phone numbers listed for Schuett have been disconnected.

The condominium Schuett lived in is owned by Jean and Kenneth Nitsche. Jean Nitsche declined comment on Schuett.Collier County records show Schuett’s new wife is Jennifer Sherman, 28. She could not be reached for comment.


In the complaint, Special Agent Nicholas J. Menster of the U.S. Secret Service, asked the judge to allow funds to be credited to Schuett’s bank accounts, but to prohibit payouts for 14 days from when a search warrant is issued.


Federal agents asked to search Schuett’s home and seize computers and his Powership Federal Express shipping device, which would provide evidence showing where packages were shipped. Feds also seek to seize a 2009 Audi Quattro, three expensive Rolex watches, cash and other property they contend were purchased with illegally gained funds.


The complaint says Schuett’s car, whose tag is USAG24 — in the name of one company he operates — was purchased for $23,487.20 at Audi of Naples in December. Schuett bought the watches at Mayors Jewelers at Coconut Point Mall in Estero, reports say.


The complaint says Schuett incorporated numerous companies in Naples, Tampa and Bradenton. State incorporation records show that through USAG24, he’s the officer and registered agent for 424 businesses, but he owns others under his name.


However, the state Bureau of Financial Investigations said Schuett has never registered as a money transmitting business, which prevents money laundering. The complaint shows the amount of money involved would be a first-degree felony.

The complaint indicates Schuett became a target after many customers came to banks with large checks issued by MCM Capital Management.


“On several occasions, recipients of the checks have advised bank tellers and bank investigators that the checks they received from Schuett’s companies are winnings from online gambling,” the complaint says.


The investigation shows Schuett had opened about 40 accounts with Bank of America over the past three years and since Nov. 1, 2007, received wire transfers and transferred about $70 million to 23,000 persons, mostly in the United States.

“As a result, numerous banking institutions throughout the state of Florida have closed accounts associated with Schuett,” the complaint says.


In addition to the bank accounts being frozen, he also had accounts with Wachovia, Shamrock, CNL, Fifth Third and Northern Trust Bank of Miami.

The complaint gives this account:


Overseas wire transfers of money went into accounts operated by Schuett, who then obtained large numbers of cashier’s checks, wrote business checks, and sent wire transfers to customers in the United States or Canada. Large amounts of money came from Bluetool Ltd., a British company, and International Payment Systems, a German company.


When one bank official asked Schuett if he was involved in gambling businesses, he denied it. Between Nov. 24 and Jan. 21, $2 million was transferred in and out of accounts operated by Schuett at Bank of Florida, Bank of Florida Southwest, and Bank of America. Most of it originated from Bluetool Ltd. through a German bank.

Between Aug. 13 and Dec. 1, Bluetool made 28 wire transfers totaling $7.3 million to bank accounts owned by Schuett’s companies.


“It appears online gambling companies are using Bluetool Ltd. as an intermediary to transfer funds to U.S.-based money transmitters in order to pay gambling winnings to U.S.-based online customers,” the complaint says, calling Schuett a money transmitter. “Online research suggests that many of the customers are online poker players.”


Four checks totaling $20,000.87 went to Corey Drury, whose Facebook account says he is a mid- to high-stakes card player employed by Absolute Poker, Full Tilt Poker, and Pokerstars.


Three totaling $15,000.43 went to Darren Elias, who is listed on various poker Web sites such as poketfives.com, bluffmagazine.com, cardplayer.com, and pokerpages.com. And four totaling $20,000.61 went to Derek Dubois, a poker player listed on bluffmagazine.com.


Meanwhile, Schuett’s Bank of America statements warned accounts couldn’t be used for illegal transactions, including unlawful Internet gambling.

From May 22 through Sept. 29, there were 27 incoming wire transfers totaling $2.17 million to a Fifth Third Bank account Schuett opened May 22 for IPS Corp. Most were from Bluetool Ltd. And 2,508 checks were written that withdrew $1.85 million from that account, which was closed Sept. 30, although Schuett had other accounts there.

From Oct. 1 through Nov. 4, MCM Capital Management Corp.’s Wachovia account received 15 incoming wire transfers from Bluetool that totaled $2.16 million.


A Wachovia bank officer questioned customers cashing checks issued by MCM Capital Management and three said they were winnings from Internet gambling poker gaming sites, while another customer refused to explain. When the officer questioned Schuett, he told her he services Bluetool by paying commissions to U.S. and Canadian citizens who use Bluetool’s Web site. The bank officer advised Schuett she believed he was operating an online gambling company.


“Schuett replied to the effect, ‘Well, it’s not like it’s illegal,’” the complaint reads.

When the officer informed him online gambling was illegal in the United States and that she was going to immediately close his account, he asked her to wait two weeks so he could settle them and transfer funds to Shamrock Bank, where he had an account.


When Schuett opened an account for South Naples Escrow Co., he told employees there it was for real estate transactions for German nationals buying property in Florida. Shamrock employees reported to federal investigators that the account was very active, but that activity wasn’t consistent with real estate transactions, which usually involve checks to title companies.


From Oct, 26 through Dec. 7, 23 wire transfers totaling $5.7 million came in to the account, while $2.22 million went out to Schuett’s companies. In addition, 20 checks totaling $3.66 million were issued, most to his companies.


A bank officer questioned him about the unusual activity, but Schuett maintained it was for real estate. On Dec. 2, a bank manager told him the account would be closed due to large activity. Bank of Florida Southwest also terminated an account in January due to suspected Internet gambling activity. Schuett told officials there he was an investment consultant.




Source:  marconews.com

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Iowa maybe the first state to legalize online Poker.


Like many states in the US, Iowa is looking to shore up its statewide debt of over $400 million. And the Hawkeye state sees regulated poker as the perfect solution to its dilemma.


State representative Doug Struyk (R-Council Bluffs) is one of the main lawmakers who is pushing for regulated intrastate poker in Iowa. Struyk has cited the large number of online gamblers in Iowa as reasoning for why he thinks intrastate poker could be a major source of revenue for Iowa. Struyk said that more than 50,000 people gambling online in Iowa.


Struyk’s plan would allow Iowa residents to deposit money at state-run casinos, and then use that money to play games such as online texas hold em. There are 17 casinos in Iowa and the money deposited at these gambling establishments would enable the state’s residents to play poker against each other.


The Iowa Racing and Gaming Commission regulates all 17 casinos in Iowa, and they’re hoping to use online poker as a means of boosting their business. Estimates state that regulated online poker could bring in an extra $11.5 million to the state through gambling revenue.


Iowa gamblers are excited about the plan too since intrastate poker would give people a chance to play all of their favorite card games. Everything from limit texas holdem to Omaha would be offered to players over the Internet.


Chances are good that the intrastate poker bill could pass since Iowa has already proven to be a pioneer in the gambling industry before. Iowa was the first US state to legalize riverboat gambling. The state also opened its first casino in 1991 at a time when many other states were still deciding on the issue.

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Thumbs up to Iowa then.  There's quite a lot going on at the mo.....


"Harrahs, IGC and Pokerstars invest in promoting the legalisation of online gambling


The McClatchy-Tribune Information service reports that an online gambling market estimated to be worth $20 billion globally this year continues to attract pro-online gambling investment in lobbying activities.


The service reports that according to mandatory disclosures, Harrah’s, the world’s largest casino operator, has spent more than $3 million in the past year to promote online gambling, and that the Vancouver-basedInteractive Gaming Council contributed at least $2.3 million to the pro-online betting effort.


In addition, PokerStars, the world’s largest online poker room, paid $300 000 through an intermediary to Representative Dick Gephardt, a former House Democratic leader and presidential aspirant from St. Louis who now runs a lucrative lobbying business.


Opposing online gambling legalisation are the professional sports leagues; apparently the National Football League alone paid a single lobbying firm $800 000 last year trying to derail Congressman Barney Frank’s federal legislative attempt to legalise and tax online gambling in the United States."



And the biggest shock of them all


"Local politician proposes the regulation of intrastate online gambling


Beating his federal political colleagues to the punch late last week, Florida Representative Joseph Abruzzo introduced a bill titled the Internet Poker Consumer Protection and Revenue Generation Act of 2010.


Florida has been examining the issue of online gambling, specifically poker, for some months as a state body prepared a report for the legislature, but Abruzzo appears to have taken the initiative in an attempt to get the ball rolling and short-circuit the implementation of the UIGEA regulations scheduled for June 1st this year.


Abruzzo's legislative proposal suggests a fully regulated system of online gambling in the state, relying on a provision in the Unlawful Internet Gambling Enforcement Act of 2006 that acknowledges and retains the right of individual states to legalise online gambling within their boundaries.


The new bill proposes strict regulatory measures with which operators will have to comply. These include rigorous licensing conditions and an application fee of $500 000 payable to the Pari-Mutuel Wagering Trust Fund of the Department of Business and Professional Regulations in Florida.


A $1 000 annual licence fee and tax provisions are also envisaged, along with strict operating requirements concerning vulnerable and underaged gamblers and precautions against the involvement of crime and the prevention of money laundering. Gamblers aged 21 years or over will only be accepted, and limits on time spent gambling and amount wagered are planned. The software used will have to be independently certified as fair.


Abruzzo proposes a tax rate of 20 percent on gross win, payable on a monthly basis by operators. "

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Saturday, March 13 broadcast scheduled


Television network CTV W5 in Canada is to broadcast its take on Internet gambling in an early evening slot on Saturday March 13.


Titled 'The Jackpot', the show "delves into the world of online gambling, a story that takes viewers from the sandy shores of Caribbean tax haven Antigua, to Quebec's Kahnawake Reserve, the unlikely world capital of online gambling," according to the publicity blurb.


"Constantly proving itself as the most-relevant current affairs program in the country, W5 looks at how a small group of Mohawks of Kahnawake have created a gambling Mecca to rival Las Vegas and Monaco, while defying Canadian and American laws," the press material adds.


Almost inevitably, the high profile founder of the Bodog group, Calvin Ayre, is on the interview list of investigative reporter Victor Malarek.  Ayre is described in the publicity material as "...a one-time pig farmer who became a billionaire with Bodog.com, one of the world's leading online gambling sites."


W5 prides itself on delivering factual and comprehensive programmes and this latest offering claims to trace the roots of online gambling from the Mohawk Indians of the Kahnawake Reserve to a global industry worth billions of dollars a year.


CTV W5 specialises in investigative current affairs programs and has presented shows on everything from the used car business and criminal cases to health issues and bombings in northern Canada.

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Where to find poker related videos, news, learning books? How I download it?



Remove your signature link and I'll tell ya!

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Treasury gave an assurance that the UIGEA regulations will not be further postponed


Online gambling's arch enemy, the Republican senator from Arizona Jon Kyl, apparently chose a potent and successful tactic to ensure the UIGEA regulations are not delayed beyond June 1st. His blocking of key US Treasury appointments during approval hearings resulted in an assurance from Secretary to the Treasury Tim Geithner that no further postponements of the controversial regulations would be permitted.


Congressman Barney Frank, a tireless campaigner for the regulation and taxing of online gambling in the United States, revealed details of the Kyl power-play this week in an interview with the publication Poker News.


"It appears the power play by Sen. Jon Kyl (R-Ariz.) in blocking President Obama's Treasury nominees from taking office worked, strong-arming Treasury Secretary Timothy Geithner," the publication reports, quoting Frank as saying: "Geithner promised he won't delay the bill again because Kyl was holding up all the nominees."


Kyl lifted his block in early February, apparently after getting what he wanted from Geithner.


Poker News reports that Frank isn't concerned about the development. He believes that, in the long run, UIGEA regulations going into effect will help to eradicate the flawed legislation rather than just delay it.


"It's fine with me," Frank said. "I think it's frankly so dumb and oppressive that it will create support to repeal the bill. I think, once it goes into effect, banks are going to raise hell and all the bankers will go to the Senate to complain."


Franks's own HR2267 bill seeking to regulate online gambling in the USA is currently supported by a bi-partisan group of 66 Washington DC politicians and is expected to be presented for mark-up soon.


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Party Poker announced that the mystery man who uses the online handle Isildur1  will be taking his seat for their televised cash game, The Big Game IV.


This anonymous Swede has certainly got tongues wagging in the poker world as to his identity and he is likely to be wearing some sort of mask to cover his face during the televised event and protect his identity.


The high-stakes poker cash game will be filmed at the Les Ambassadeurs Club in London from April 11th to 13th.








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British Model wins £1.1million poker tournament and proves she's not just a pretty face!


Liv Boeree, 25 has a degree in astrophysics and beat 1,240 other players to scoop the top prize of £1.1 million. In the final hand she showed a pair of 5's against Swede Jakob Carlsson's ace six.


Liv is only the third woman to win the EPT.  Her nick is "Iron Maiden" because she loves heavy metal music.  Her total winnings are £1.8million in just three years - but she still lives with her parents in Milstead, Kent.


She will now go on to contest the EPT grand final in Monte Carlo on Sunday.


Oh and guys - no point in dreaming of dating this gorgeous beauty, she has a fella already....US card ace Allie Prescott.


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Co-sponsors for HR 2267 now up to 68


Congressman Barney Frank continues to attract Capitol Hill co-sponsors to his HR 2267 bill, which seeks to legalise online gambling in the United States and overturn the UIGEA .


In an environment that appears to be increasingly in favour of the idea of regulation rather than prohibition, the Frank legislative proposal has so far attracted 68 co-sponsors.


Latest to sign on for the initiative is a Nevada politician, Representative Dina Titus from the Nevada third district. She was preceded by New York representative William Owens as the 67th politician supporting the bill.


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McDermott and Frank bills both due for debate


It looks as if a companion bill to Congressman Barney Frank’s HR2267 may be the subject of a hearing later this month ahead of HR 2267 itself.


Staffers in the office of Representative Jim McDermott have hinted that May 19 and 20, although not yet confirmed, could be the dates on which his Gambling Regulation and Tax Enforcement Act will be discussed in a House Ways and Means Committee hearing.


Political observers point out that if such a hearing eventuates, it will be the first time the bill has enjoyed its own focus – on taxing a liberated US online gambling market – in the House.


Bringing the McDermott bill into the spotlight could complement its companion Frank bill, which seeks the legalisation of online gambling. In December Frank held a hearing on his HR2267 bill in the House Financial Services Committee, and is on record as saying another hearing is likely in May.


Frank’s other legislative proposal, which has the objective of delaying the implementation of the Unlawful Internet Gambling Enforcement Act until the legalisation issue is resolved, would appear to have little chance of success.


Proponents of the UIGEA have already been angered and frustrated by the successful postponement of the regulations to June 1st this year, and there appears to be little appetite in the Obama administration for a further extension.


A hearing scheduled for April 16 was postponed indefinitely due to a scheduling problem in Frank’s office and nothing further has been heard on it.


In these difficult economic times, when both federal and state budgets are under considerable stress, the potential of the McDermott bill to generate billions in tax revenues and increase employment opportunities is a powerful attraction, with the potential to improve the chances of the Frank bill that it complements – the bills are mutually supportive.


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Appeal could see escalation to the Pennsylvania Supreme Court


Poker organisers Diane Alice Dent and Walter Leroy Watkins have to be among the most determined fighters for poker to be recognised as a game where skill is more important than chance; the duo’s case could now be headed for the Pennsylvania Supreme Court.


The couple, who were accused in 2008 of running a poker game in which no rake applied in the garage of a private home, have appealed a Superior Court ruling that had earlier overturned a lower court finding that poker is predominantly a game of skill and therefore falls outside the scope of ‘illegal gambling.’


The case started its long journey through various courts when a police sting operation resulted in the prosecution of the duo, and the Poker Players Alliance has been fighting poker’s corner in supprting the two Pennsylvanians.


The PPA’s executive director, John Pappas, feels there is a good chance a Supreme Court appeal will be successful, saying: “The [superior Court] judges did not look at what was presented before them, but rather looked at other court cases in other states that said poker is a game of chance. They didn’t take into account any of the most recent academic studies and legal victories.”


The case has seen the presentation of some highly technical testimony dealing with the advantages of skilled players over less experienced gamblers in identifying opportunities to bluff, master odds, and interpret live tells.


It was to no avail in the Superior Court, however, where a panel of three judges voted 2 to 1 that chance is the predominant factor in the game, quoting from cases in other states.



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Poker players warning:


Active review on moves to fix the problem being conducted by the Commission


The Kahnawake Gaming Commission has sounded a note of caution for players regarding the encryption issues which surfaced late last week at the Cereus Poker Network.


In a statement Tuesday, the Commission noted that the mechanism used by Cereus for network transmissions contained the “potential for player gaming data to be improperly accessed under certain specific circumstances”.

“The Commission is actively reviewing this matter with senior management of AbsolutePoker.com and UltimateBet.com and with its approved agents,” the KGC statement revealed, giving an undertaking to the player community that it would issue a further notice as soon as its review has been completed.


The statement continues: “The Commission is monitoring immediate measures that are being taken to address the security issue and is advised that a more permanent solution is to be implemented on an urgent basis.


“Based on information available at this time, it appears unlikely that player gaming data was actually compromised. However, this possibility will be reviewed further and, if necessary, the Commission will direct that the appropriate remedial actions be taken.


“Until a solution to the security issue is fully implemented, the Commission recommends that players use caution when accessing the AbsolutePoker.com or UltimateBet.com sites and, in particular, when using a wired or wireless public network or a private wireless network.”

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Thanks Blue,I love playing poker too and I sometimes do not read the e-mail I get from the poker alliance but I ty to keep up with with posts on LCB.We need to stay informed and hopefully in the not to distant future we will be able to play our favorite games weather it be poker,slots,video poker or whatever.Once again, thank you for keeping us informed.

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I agree bingocrazy, the sooner USA is unrestricted the better.  Freedom of choice doesn't come into it at the moment.



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Wednesday’s House Ways and Means Committee hearing will be closely watched


Today’s (Wednesday) hearing on Representative Jim McDermott’s proposal to tax a legalised online gambling industry in the United States has attracted some heavyweight political and other names


The House Ways and Means Committee has published a witness list that includes both pro and anti Internet gambling personalities like Congressman Barney Frank and Representative Bob Goodlatte, along with civil service representatives from the United States Treasury and Internal Revenue Service.


Christopher Wagner, Commissioner of the Small Business Self-Employed Division will represent the interests of the IRS, whilst Rebecca Sparkman, Deputy Director for Operations for the Criminal Investigation Division is also listed.


Charles Steele, Deputy Director of the Financial Crimes Enforcement Network for the United States Department of the Treasury will speak for the US Treasury.


Jim McDermott, as author of HR 4976, the Internet Gambling Regulation and Tax Enforcement Act, will be a key figure. His proposal deals with a wide range of taxation issues and is complementary to Barney Frank’s HR 2267, which is designed to legalise and regulate US gambling on a federal level.


Frank’s bi-partisan bill has just signed it’s 69th political sponsor on Capitol Hill in Representative Scott Murphy, a New York Democrat.


McDermott is seeking to impose taxes on online poker and other Internet gambling that could bring the federal government as much as $42 billion over 10 years, according to a congressional analysis. States may collect as much as $30 billion, McDermott’s office estimates.


“It’s a human activity that people are going to do, and it’s a good place to pick up some dough,” said McDermott, a Washington Democrat, in an interview. “I’ve gotten a thousand ideas pumped at me about what we should do with the money.”


McDermott’s proposal would require Internet gambling operators to pay a 2 percent tax to the federal government on betting deposits and a 6 percent tax to states. The federal treasury also would collect taxes on gaming-company profits, and bettors would pay taxes on winnings.


However, arch anti-online gambling opponent, Republican representative Spencer Bachus, says revenue estimates for McDermott’s proposal are bloated because they assume all states would participate. The Alabama congressman said he’s concerned the prospect of more government revenue will attract lawmakers who thus far have opposed legalising Internet gambling.


“I know the government is in a search for money, but if you have something that is destructive to society, you shouldn’t let $40 billion be the price tag,” Bachus said.


The U.S. offshore Internet gambling market is expected to climb to $5.7 billion in 2010 from $5.4 billion last year, according to U.K.-based H2 Gambling Capital, which supplies data on the industry. The global market is about $30 billion.


26 Democrats and 18 Republicans make up the powerful House Ways and Means Committee, which includes familiar names associated with internet gambling like Nevada representative Shelley Berkley.

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hi gang people like  Bauhus should go away , they should go with the majority of what people want , ty josie46

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US Internet gambling tax bill debate continues....


Strong views remain on both sides of the argument for legalisation


The legalisation of US internet gambling inevitably raised its head in Wednesday’s House Ways and Means Committee hearing on Representative Jim McDermott’s HR 4976 proposal to tax online gaming in the United States.


Congressman Barney Frank, the author of HR2267, a bill seeking to legalise the pastime, spoke passionately about the rights of the player, whilst opponents were equally vociferous in their condemnation and concerns over internet gambling.


John Pappas, Executive Director of the Poker Players Alliance grassroots advocacy group was first off the mark in getting a media release out on the discussions surrounding McDermott’s Internet Gambling Regulation and Tax Enforcement Act of 2010.


"Today's hearing underscores the increasing Congressional interest in a licensed and regulated online gaming environment,” Pappas said in a press statement. “While the robust consumer protections provided by regulation are the biggest selling point, in the current economic environment, additional tax revenue derived from a licensed industry is certainly appealing as well.


"It is important to note that this bill would not levy a new tax on poker players. Rather, it requires each licensed Internet gambling operator to pay a licensing fee – nothing would be deducted from a player's deposit. Individuals would be required to pay annual income taxes on their net winnings, just like players who collect winnings in land-based casinos do today.


"The PPA is working to remove language from the bill that would fine players who play on unlicensed sites as we firmly believe the unlicensed sites should bear the full consequences of not obtaining a license in the U.S.


"We thank the Committee for holding this important hearing today. We look forward to a successful mark up of legislation to license and regulate online gaming in July in the House Financial Services Committee."


According to the Dow Jones news agency, Congressman Frank confirmed that he planned to bring a bill legalising online gambling before his panel in July for lawmakers to consider.


Frank, one of the biggest congressional advocates for overturning the law passed by Republicans in 2006, said he hoped the bill could be approved by the House this year.


The feisty Democrat, who also chairs the powerful House Financial Services Committee, testified before the Ways and Means Committee, arguing that the government has no business telling adults they can't gamble online. He has also noted that the regulations that are set to go into place June 1 would compel banks to determine which financial transactions are illegal under the law.


Frank said that once the regulations are implemented next week, he expected the banks would begin to complain loudly about being told they have to police the online gambling industry.


Turning to his own bill, Frank said that HR 2267 is designed to protect consumers without restricting their freedom.


“I have always believed that it is a mistake to tell adults what to do with their own money.  Some adults will spend their money foolishly, but it is not the purpose of the Federal Government to prevent them legally from doing it,” he said.


“We should ensure that they have appropriate consumer protections and information, but otherwise allow people to pursue activities that they enjoy which do not harm others.  As John Stuart Mill said in his essay, On Liberty in 1869:


“The only freedom which deserves the name is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it. Each is the proper guardian of his own health, whether bodily, or mental or spiritual. Mankind are greater gainers by suffering each other to live as seems good to themselves, than by compelling each to live as seems good to the rest.”


Frank noted that he had the strong support of some 70 political co-sponsors, including Representative Ron Paul of Texas; and the Ranking Republican and former Chairman of the Homeland Security Committee, Peter King.


He argued that American consumers who wish to gamble online are currently without safeguards against fraud, identity theft, underage and problem gambling and money laundering.  Some operators adhere to rigorous regulatory regimes in foreign jurisdictions, but U.S. customers have no local recourse if they have a problem.


“And, more to the point for today’s hearing, billions of dollars in taxes – both under existing law and those that would be established under Mr. McDermott’s bill – remain uncollected,” Congressman Frank asserted.  “Enacting these bills would bring this industry out of the shadows, benefit consumers and ensure that all of the revenue does not continue to exclusively benefit offshore operators.”


Representative Jim McDermott told the hearing that millions of Americans gamble on the Internet each day, despite laws seeking to prevent or disrupt it. Citing industry analysts, McDermott said US players deposit $12 billion and wager nearly $100 billion annually, generating an estimated $5 billion for offshore operators.


That money would be put to better use in the U.S., he claimed, saying that it could create thousands of jobs for people who would be employed by licensed gambling sites.


"Regulation and taxation have proven to be a better policy for our country when it comes to alcohol," McDermott said. "The same is true for online gambling."


"Driving Internet gambling offshore has been a policy failure,” said McDermott “The GAO has called Internet gambling borderless, and I think it's time for Congress to stop pretending that the future won't come."


McDermott estimated that taxing the industry would generate $42 billion, with the bulk coming from income taxes on winning players. Other revenues would be derived by a tax of 0.25 percent on all wagers, which is consistent with current gambling tax law, and a two percent tax on player deposits at the federal level.


The bill would also give states and tribes the opportunity to share in that deposit tax at a rate of up to six percent on those same deposits in lieu of all other taxes. Combined with existing state income taxes, McDermott estimated states and tribes would raise $30 billion over 10 years.


The Associated Press news agency commented that realistically, supporters realise that Congress is highly unlikely to pass legislation this year on the subject, but they hope to lay the groundwork for the future with hearings like the Ways and Means Committee discussion.


Frank has stressed that his legislation prohibits operators from accepting sports bets as well as bets initiated in states or tribal lands that prohibit that particular type of Internet gambling.


Opponents of the proposed legislation predictably called the hearing a waste of time.


"It's pretty clear to me that Congress is not about to legalise, let alone legalise and tax Internet gambling," said Californian Republican Representative Wally Herger. "There are far more pressing issues we should be focused on."


Another confirmed online gambling opponent, Virginia Republican Representative Bob Goodlatte, told lawmakers that almost all the nation's attorneys general have opposed similar legislation in the past.


"Unfortunately, financial ruin and tragedy are not uncommon among online bettors," Goodlatte alleged.


Democratic Representative Shelley Berkley from Nevada, said online betting has never been more popular, despite efforts to stop it. She said she supports efforts to legalise it, which would allow Nevada casinos to participate in the online market, but she can't support the taxes McDermott proposed.


"Participation in the Internet gambling market by reputable U.S. companies will ensure that U.S. players are able to choose operators based on their integrity and security, and not just their availability," Berkley said.


Fellow Nevadan, Republican Representative Dean Heller, agreed with her position against the tax proposal.


"Common sense regulation of gaming on the Internet will protect American consumers, and I believe it will create at least 32 000 jobs," Berkley said, but then added, "I am unable at this time to support this special tax called for by Mr. McDermott's bill. The issue of taxation and legalization are separate and distinct."


One politician who appeared to have been swayed by the positive arguments for regulation rather than prohibition was the Republican Representative from Oregon, Earl Blumenauer, who after the hearing renounced his stand against online gambling, saying he had learned it was hypocritical, and citing the need for revenue sources.


Blumenauer, who admitted he had voted for the UIGEA when it was rushed through a late night session of Congress attached to a security bill in 2006, said he will now support the regulation of Internet gaming, making him the 70th politician to sign up to Barney Frank’s HR 2267.


In a press statement, Blumenauer said that allowing state lotteries, US horse racing and fantasy sports leagues to conduct gambling business over the Internet made it unreasonable and inequitable to legislate against online casinos and Internet poker.

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I found this thread about FullTilt.


It was reported by the Financial Times that the worlds 2nd largest online poker room Full Tilt Poker is being investigated by a federal grand jury in Manhattan, NY.


The article, which was published on Monday April 5 by a Financial Times reporter in San Francisco, read in part, “A federal grand jury in Manhattan is investigating one of the largest internet poker sites serving U.S. gamblers and could bring indictments against some of the world’s best known professional players, according to people familiar with the case and a subpoena issued to a witness this week.” Two poker players singled out are Howard Lederer and Chris Ferguson, whose names were brought to life in a civil suit last year as having an ownership stake in the company.


Federal agents have purportedly honed in on money laundering charges. On their significance, the Financial Times explains, “Money laundering charges might be attractive to the government as they would compel cooperation from authorities even in countries where gambling is legal.” Subpoenas issued in the case allegedly claim that internet gambling is illegal in the United States, a statement many industry insiders would disagree with.


Is this true and if internet gambling is illegal can we get busted and What about PokerStars?

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The "player" cannot be busted as far as I can understand.  It is only the financial institutions and "maybe" the site itself that can be in trouble.  As the 2 players named in the article have a financial interest in the site, they are included in the "money laundering" charges.


That is how I understand it.  


Thanks for the post.



  • Thanks 1

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Some interesting comments from the

about the legality of poker from tomorrow [1st June] and as suspected above, players cannot be in trouble - this is confirmed in the video.



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