And Now For the News...

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And Now For the News...

Postby Shapley » Tue Jul 18, 2006 9:41 am

I thought I'd relocate the "And In Other News" topic to the Debate Team location, where it seems to fit.

I thought I'd see what everyone thought of this:

CEO of offshore gambling site charged

Exactly what authority does the United States, or rather the State of Missouri, have over a UK based company doing business in Costa Rica? I would think that the onus would be on the American citizens to refrain from online gambling rather than placing the onus on the Gambling companies to refrain from accepting bets from American citizens.

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Postby BigJon@Work » Tue Jul 18, 2006 10:00 am

I think this thread should be here too. The moderators can move the old thread and merge it with this one if they desire. Why don't you ask them?

I'm very ambivalent about the online gambling industry. The liberty lover in me says that whatever people want to do online, they should be able to do it. The gambling hater in my says ugh! The reality aware part of me says that online gambling is absolutely ripe for massive fraud and should be regulated for that reason. The potential for abuse just boggles the mind when you think about it. The cynical part of me says the only reason the gubby cares at all is because they are not getting their cut.
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Postby barfle » Tue Jul 18, 2006 10:40 am

I would guess that these gambling sites occasionally do pay off, since people do patronize them. It seems that a real ripoff site would get a reputation fairly quickly, but the Internet is about as free a marketplace as any I've ever experienced.

One problem with it is the anonymity, though. Liberty also means responsibility, and without being able to accuse your offender, it's not exactly a place for the naive.

And, IMNSHO, you have to be pretty damn naive to gamble online.
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Postby Shapley » Tue Jul 18, 2006 10:41 am

Apparently online gambling is legal in the UK and in Costa Rica, where the gambling company operates. The US has banned online gambling (with exceptions). It would seem to me that it is up the citizens of those nations that do not allow gambling to not gamble, it is not up to the companies that operate casinos legally, albeit not in the United States, to not accept bets from such citizens.

The industry is probably ripe for fraud, as is the internet porn industry and others. But what ever happened to "Let the buyer beware"? If there is misrepresentation, such as the casino advertising that it is US based or affiliated or approved or whatever, then that is a case of fraud, and is punishable under international treaty regulations. That does not appear to be the case here.

From what I've read, which is not that much, Costa Rica does have some regulation of the industry in place. The casinos have signed taxation agreements with some nations, but not with the US. I'm not saying the casinos are 'clean', and I've not tried them. My question regards the jurisdictional issue.

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Postby Selma in Sandy Eggo » Tue Jul 18, 2006 10:43 am

BigJon@Work wrote:I'm very ambivalent about the online gambling industry. The liberty lover in me says that whatever people want to do online, they should be able to do it. The gambling hater in my says ugh! The reality aware part of me says that online gambling is absolutely ripe for massive fraud and should be regulated for that reason. The potential for abuse just boggles the mind when you think about it. The cynical part of me says the only reason the gubby cares at all is because they are not getting their cut.


Ambivalence here, too. Jurisdiction would seem to be one of the main sticking points here.

Any given country does have some legal control of the flow of financial assets from their country to other parts of the world. Also, I think that the country of which a person is a citizen retains some responsibility and authority regarding their behavior. But if an act or business is legal in Costa Rica, and illegal in Texas, and the transaction occurs between Costa Rica and Texas, where does the crime happen? If it happens in Costa Rica (where it is legal), is it a crime at all?

This is going to sell a lot of Excedrin.
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Postby BigJon@Work » Tue Jul 18, 2006 12:38 pm

As for fraud and corruption, picture this. Site goes on-line, sets the payoff bar low, say 99%, and people talk in message boards. "Hey, this site has fun games and I'm doing pretty well, won $3000 the other day and it's all good." Others join, the payoff bar gets set slightly higher but the buzz is good and the growth continues. Soon it is massive, millions of dollars being wagered every day, payoffs are at 96% so people are still winning and still having fun, then one day the payoffs stop. No individual notices, because long streaks of "bad luck" are common amongst gamblers. Finally nobody is winning and the buzz turns into a rumble. Gamblers log in one day to find the casino has been replaces with a taunting banner that says "Sorry suckers!"

Just stopping the payoffs for 2 days could yield a huge haul for someone with a roaring business and the right money transfer skills. Then you move to a different third-world country will low police skills, set up shop with other unscrupulous web developers under a different name and URL and start the scam all over again.
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Postby Giant Communist Robot » Tue Jul 18, 2006 1:16 pm

Shapley wrote:

Exactly what authority does the United States, or rather the State of Missouri, have over a UK based company doing business in Costa Rica?



I think

  • they might have an interest in protecting Americans from an unregulated--by them--enterprise. I read 95% of the money for this particular web business comes from the US
  • potential revenue


both of which really rephrase BigJon's post

The first item can share similarities with stuff like Iraq, the Barbary pirates, and so on
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Postby Shapley » Tue Jul 18, 2006 2:28 pm

GCR,

Perhaps, except that the violators are the American citizens who willful give their money to the companies. I would draw the distinction that Barbary Pirates were attacking American shipping abroad, whereas the Costa Rica casinos have not attacked anyone, as far as I can see.

The American government has not seen fit to go after the Nigerian 'Princes' who bilk millions from Americans by promising them a high return for their cash, but simply warn Americans not to give them money. There's no problem with regulating the cash flow to the casinos, as long as it is done here on American soil. I'm afraid that, once the cash leaves the country, it's beyond our authority to regulate it.

The best way to handle it would be to put the onus on the Credit Card companies that handle the transactions, since most of them have license to do business in America, the ability to regulate them already exists. To try to impose US law on a UK business in Costa Rica seems to me to be the wrong approach.

Let 'em nab a handful of gambling citizens and make an example of 'em, if they really want to stop the trade. But of course, they don't, they want a piece of the action, so they're bullying the casino execs in order to gain more leverage in the bargaining.

Don Corlionne would be proud.

V/R
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Postby Selma in Sandy Eggo » Tue Jul 18, 2006 2:54 pm

It looks like the credit card companies are exactly the point the US regulators identified as the spot for the lever. Today's news says that US credit card companies are being forbidden to transmit funds to online gaming businesses. The credit cards are subject to US financial regulation, regardless of whether this'n'that activity is legal or illegal in Costa Rica, the UK, or the US. (How to find the criminal: follow the money.)

We'll see how this works. It has possibilities.
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Postby bignaf » Tue Jul 18, 2006 11:17 pm

if they just legalize online gambling, they could tax and regulate it.
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My thoughts on gambling - online & otherwise

Postby DavidS » Wed Jul 19, 2006 1:06 am

1. "Caveat empor": An adult daft enough to blow his assets on that kind of tommyrot - that's that sucker's problem! Just remember who it was behind the development of Las Vegas.
2. I object strongly to government managed lotteries, football pools and whatnot - definitely negative educational messages here! A person's wealth should be what he earns from honest graft (in the UK sense), not gaming. The Talmud automatically disqualifies professional gamblers from giving evidence in a Court of Law.
3. You are forced to take so many chances in life, what do you need money gambling for?
4. A man passes daily a kiosk selling lottery tickets, and never ever responds to the vendor's solicitations to buy a ticket. One day the ticket seller grabs him by the lapel and says, "Tell me, why shouldn't you try your luck? Maybe you are due for a windfall?"
Reply: "If such is decreed in heaven, why do I have to buy a ticket?"
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Postby GreatCarouser » Wed Jul 19, 2006 9:52 am

Let's take a moment to thank those same folks who brought us the Salem witch trials for their legacy to the USA. They are the seed of these attempts to 'legislate morality' that bog this country down economically and spiritually.

From a purely historical perspective, prohibition didn't work with alcohol, the 'war on drugs' has been an abysmal failure, 'numbers rackets' and other forms of illegal wagering have been greatly curtailed in areas where lotteries and other forms of 'gaming' are legal , and prohibition has been spectacularly unsuccessful at controlling prostitution.

I play poker online. California residents know that 'poker' is considered a game of 'skill' rather than of 'chance' in this state. I find there are many 'online venues' that payoff and are secure in their 'software' (this gets a little technical, but basically, the 'cards' are dealt by a random number generating program that insures a random shuffle. Very early in this business there was a site that had its 'algorithm cracked [this allows the code cracker to know what cards will be dealt to whom']. Since that event the reputable sites have gone to great lengths to insure the integrity of their software codes. Most of the sites to avoid are the Eastern European ones as well as the South and Central American based sites). Businesses such as Neteller and Firepay have been created to deal with the credit card companies' reluctance to make payments to these sites. These businesses are 'online wallets' not unlike PayPal and are run by large banking interests in Canada (Neteller) and I believe the UK (Firepay). Of course the risks of doing business with businesses in other countries is there but probably no greater than those encountered by any one in the import-export business. The successful sites know what all successful business owners know, that it is your customers who determine whether you get rich or poor and it pays to have good 'word of mouth'. You don't get good 'word of mouth' by not paying off your customers or running dishonest games.

I won't cavil with those who object on moral grounds to any of these activities, I will answer them the same way I answer those who wish to 'mind my business' for me in other areas of my life: 'thanks for sharing your point of view, now leave me to my business, please, and mind yours before someone steals it from you.' People who want to make 'gambling' illegal but are 'ok' with stock and commodity markets have no real understanding of any of them. Which leads me to wonder whether stock brokers, commodities brokers, insurance agents and the like are allowed to give evidence before a Talmudic Court? This last is not to single out DavidS, Israel, or Judaism in any way, I just read his post and was curious...

Btw and off topic, are PM's working yet? I'm thinking of doing another bio but may have to use the '30Q' format if they are still down....between online poker games anyway.....:wink:
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Postby Shapley » Wed Jul 19, 2006 10:04 am

GC,

I'm with you on this one, although my intent with starting this topic wasn't to discuss the authority of the government to ban gambling, but rather the jurisdictional issue.

My point of view, as a conservative, is simply that what you do with your own money is your own business. It doesn't matter to me if you want to give us it to enrich the poor, enrich televangelists, enrich politicians, enrich gambling houses, or enrich oil companies, or put it away for whatever purposes you choose. I don't gamble online, but I occasionally play the numbers racket - the State run one. If I want to gamble, I can trot down to the local riverboat casino, but I rarely do.

Poker is beginning to become a bit more mainstream with the televised Poker Tournaments. I'm amazed at the interest in Texas Hold 'Em of late, even little old ladies have replaced Bridge Night with Poker Night. But the guardians of our morality (and this isn't a left-right issues, since the guardians appear on both sides of the political spectrum) are watching all this with disdain. I'm expecting to see a major crackdown on the Pinochle Ring any day now.

V/R
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Postby DavidS » Wed Jul 19, 2006 10:41 am

GC and Shap
I have no issue with either of you; anyone who wishes to gamble is fully entitled to do so.
All I say is that it is an adult decision, with adult consequenses, and no government has the right to intervene - or to encourage this kind if thing.
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Postby Selma in Sandy Eggo » Wed Jul 19, 2006 10:47 am

As an aside, today is Opening Day at Del Mar. This involves some sort of Hat contest (I don't get it) as well as trying to guess which horse will run fastest.

I won't bother. There's crowds, I always burn my nose, and I'm a lousy fastest-horse-guesser. The part where there are horses actually running on the track is fun, though.
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Postby BigJon@Work » Wed Jul 19, 2006 11:07 am

GreatCarouser wrote: People who want to make 'gambling' illegal but are 'ok' with stock and commodity markets have no real understanding of any of them. Which leads me to wonder whether stock brokers, commodities brokers, insurance agents and the like are allowed to give evidence before a Talmudic Court? This last is not to single out DavidS, Israel, or Judaism in any way, I just read his post and was curious...

Gotta break this out GC. Traders are no different than gamblers. There is a winner, there is a loser, the house takes it cut and no wealth is created, except for the house. Investing in stocks and bonds for the long term is not the same as gambling because the businesses can actually create wealth and are in business to do just that. Insurance and commodity brokers have legitimate purposes to reduce risk of catastrophic loss, just because they are used by traders to gamble doesn't make them inherently gambling enterprises. Your analogy is shallow and malformed and if you don't understand the differences, you should be doing a lot of study. As much as I hate traders and trading, they have made the US markets the most liquid and easy to use in the world. Ever the useful fools.
Last edited by BigJon@Work on Wed Jul 19, 2006 12:22 pm, edited 1 time in total.
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Postby Shapley » Wed Jul 19, 2006 11:59 am

Agreed, the key issue there is ownership. A commodity trader 'owns' something when he buys commodities, or even buys futures, in that he owns the crops or other commodities that are yet to be produced. If the price of a commodity fails, the trader simply owns a quantity of that commodity that is worth less than he paid for it. How many of us have bought houses, cars, or other property under similar circumstances?

A gambler doesn't buy anything of value during the enterprise, they simply place their money in the hopes that a turn of the cards, a spin of the whell, or a pull of the lever will generate them more money.
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Postby GreatCarouser » Wed Jul 19, 2006 12:54 pm

BigJon@Work wrote:...There is a winner, there is a loser, the house takes it cut and no wealth is created, except for the house. Investing in stocks and bonds for the long term is not the same as gambling because the business can actually create wealth and are in business to do just that. Insurance and commodity brokers have legitimate purposes to reduce risk of catastrophic loss, just because they are used by traders to gamble doesn't make them inherently gambling enterprises. Your analogy is shallow and malformed and if you don't understand the differences, you should be doing a lot of study. As much as I hate traders and trading, they have made the US markets the most liquid and easy to use in the world. Ever the useful fools.




So if I am a banker and you are a farmer and I lend you monies using a share in your coming corn crop as collateral that's ok because you are 'creating' wealth and are in business to do so but if I come to you as an 'investor' (gambler) and make the same deal we aren't 'creating' wealth? Seems the difference is what name you give the lender?

Darn, I guess all those casinos, both Indian and corporately owned scattered around the US create no wealth? Tell that to their shareholders and employees. Tell that to the service industries that have sprung up to serve them, their customers, and employees.

Commodity traders and others who speculate in 'high-volatility' investments can come out winners. Because they may not be publicly traded partnerships does that mean that 'no wealth has been created'? Burn all the mom-and-pop small businesses then.

Please don't tell me about the 'wreckage' of broke gamblers unless you are willing to include in that number the overwhelming number of small business owners who lose at their particular gambles when compared to the numbers that 'win'. Just as more and more small businesses do survive and thrive so do more and more 'professional gamblers' and no other industry creates the possibility for quick wealth from a relatively miniscule investment for the casual and uninformed 'investor' that the gambling industry does (I am including a major lottery win here as it is legal gambling). As lousy as the odds of it happening are they are far greater than the odds of it happening from any other investment.

If you go to wager on a pari-mutuel wagering event (horse race or dog race, for example) you are giving the house an edge of approximately 17-20% on whatever monies you wager there...I'd love to find an insurance company that would offer me even odds 1/4 as good as those (and they are quite lousy odds compared to most casino games for example) on the return of my often legally-mandated 'wagers'with those 'wealth-creators'.

It seems by your lights, *ig Jon, only businesses that create something 'tangible' are wealth creators. Let's burn all the banks along with the lawyers, ad agencies, management consultants etc. then.

Saying that ..."(t)here is a winner, there is a loser, the house takes it cut and no wealth is created, except for the house..." is like saying that all those 'winners' are bound to lose/spend what they have won and be left, at best, breaking even on their investment. That conclusion is laughable.

Is it really my analogy that is 'shallow and malformed' or perhaps only the conclusions you reached that deserve those adjectives?

I'd love to continue this if anyone is moved to further discuss it but I may not be able to do so until late evening for you US east coasters. I'm also happy to let it lay...I stand by my earlier post.
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Postby barfle » Wed Jul 19, 2006 1:01 pm

The value created by gambling is quite similar to the value created by other forms of entertainment. Seriously, of what value is a concert, a baseball game, a Broadway show, a theme park?

Although I don't gamble very much, what I figure I'm spending my money on is the entertainment of the activity. Sometimes it's very, very cheap, and at other times it's very, very expensive. Which is part of the entertainment value for me.
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Postby DavidS » Wed Jul 19, 2006 1:46 pm

Yes, I should have mentioned that:
A very thin line divides between "backing the horses" and "having a flutter on the Stock Exchange".
Personally I will not be judgemental of either, except to say that neither is to my personal taste.
I always tell my bankers to invest my money in the most "solid" and least "speculative" directions possible, even if the profits will not be all that brilliant - but assured.
It might be my engineering training kicking in.
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