Even though it may not be strictly illegal to use offshore Internet merchant accounts to accept funds for gambling, it is quite another thing to make payments to players who may reside in the U.S.
34 year old Canadian entrepreneur Douglas Rennick has learned the hard way how determined the U.S. Department of Justice (DOJ) is at cracking down on Internet gambling operations that it considers to be illegal. Rennick was indicted on August 5, 2009 on conspiracy charges for bank fraud, money laundering, and operating an illegal Internet gambling operation. Specifically Rennick used accounts set up under false pretenses to make payments to so-called co-conspirators by check from offshore Internet gambling operations, largely to be disbursed to U.S. residents as gambling winnings. It is considered illegal by the DOJ to process checks for Internet gambling in the U.S. Apparently Rennick may have known this because he never told the banks involved how the accounts would really be used, instead he claimed that the accounts would be used to issue checks for rebates, refunds, affiliates, and for payroll.
Rennick could face a combined 55 years in prison and fines totalling $1.75 million if convicted; in addition, the DOJ is seeking a forfeiture of the $565.9 million that was allegedly earned through these operations. So it seems, just as what happens in Vegas stays in Vegas, what happens within the confines of offshore Internet merchant accounts should stay there, at least as far as U.S. residents are concerned. If the Rennick case is any indication, the DOJ would consider any convoluted attempt to return Internet gambling winnings to U.S. residents as money laundering.
Despite the restrictions placed on Internet gambling in the U.S, these players still manage to provide gambling sites with about $85 million in revenues every month. Last month the Poker Players Alliance lobbied Congress to ease restrictions put in place by The Unlawful Internet Gambling Enforcement Act with the argument that Internet gambling is not really ever going to end, and the U.S. would be better off being able to tax these operations. If Poker Alliance is successful in their efforts, it could make business a lot more straight forward for U.S. based online gambling operations to use Internet merchant accounts and other conventional means just as any other legitimate Internet business does.
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On the other side of the Atlantic, right2bet – http://www.right2bet.net – is trying to emulate the success (?) of the PPA by lobbying for freedom of choice for EU users of online gambling. You can sign their petition to help break down the unfair gambling laws that restrict choice and competition in Europe by visiting their website. EU governments are very eager to cream off the profits from state-controlled gambling enterprises but still want to be seen as taking a tough line in “regulating” the industry (read: unfairly discriminating against). It’s rank hypocrisy.
yeah,it Despite the restrictions placed on Internet gambling in the U.S, these players still manage to provide gambling sites with about $85 million in revenues every month.
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