US Government arrests a Canadian citizen for Online Gambling Funds Transfer

Our editors would like to make it clear to players living in the US which commonly are scared away from online gaming that the legislation regarding online gaming in the USA is as grey as it gets as it has not been made clear to what it right and what is wrong as facts are very commonly twisted in order to be in favor of financial benefits of the US government. The facts are that as of October 2006 the UIGEA (Unlawaful Internet Gambling Act of 2006) passed on during the presidency of George Bush has forced operators out of the US by applying a rule that favors their financial benefits and which disallows stock listed gaming operators to accept wagers from US tax payers or citizens which hold credit or debit cards issued in the US. This law has forced major respected European based and European stock listed gaming operators from blocking their sites from accepting wagers made by US players. Although many operators including Party Gaming had stepped away from the US market other like PokerStars have remained in the market and till this day run a start of the art poker network which welcomes US players.

Douglas Rennick, citizen of Vancouver has been charged with the accusations of money laundering, bank fraud and illegal gambling by the US Federal prosecutors. The facts as stated are that Rennick during 2007 and 2009 opened a number of bank accounts in the USA were the owners of the accounts were various offshore companies. The usage of the accounts was to transfer funds from a number of gambling companies to the games winners who issued a withdrawal request from online casino and online poker sites. The US prosecutors claimed that over 350 million dollars were transferred in the US and distributed to the winners from a single bank account in Cyprus.

However, Rennick pledged guilty to the accusation that he illegally helped offshore online poker sites to move money (players winnings) into the country and he agreed to forfeit about $17 million held in a number of accounts. The rest charges were dropped and now the Canadian faces up to two years sentence in jail.

Nelson Rose, who is a professor at California’s Whittier Law School and a gambling law specialist, said that this is an intimidation act as every few years they make a big showy arrest to scare people. He also said that despite the fact that laws do not apply on all forms of gambling or on all cases, it does has an effect as many online gambling companies have gone out of business as payment processors are every day less willing to take the risk to transfer money from gambling.

Rennick’s accusations were based on the fact that he didn’t inform the financial institutions (banks) that the money on the accounts will be used to pay gambling winnings. This was the fraud as the banks wouldn’t have processed transactions related to gambling.

Michael Lipton, a Toronto Lawyer said that while US posses a patch work of laws that can be used to fight online gambling, the officials rarely go after the gamblers themselves. Instead, they move against those who operate the businesses. However, he stated that it is almost impossible to stop online gambling outside the country as operators hold licenses from many international locations such as Isle of man, Malta and Gibraltar. People are free to play online poker, casino games, blackjack and place bet online while the government can do nothing to prevent it. Lipton said that instead trying to ban Internet gambling it is much better to regulate it creating the right frame law were the country will be able to receive further taxation money from countries that operate outside US.

It is noteworthy to say that banking institutions which are forced to play by the rules set by authorities have over time blocked transactions related to gaming to avoid trouble and over time have more or less made online credit card processing troublesome as regulated legitimate companies were forced to stop conducting business in the US therefore giving ground to illegal or fraudulent activities or even legal companies forced to run sister companies that were playing a naughty game behind the scenes to avoid losing their share of the market.

This sums up to one thing and only and this is the one and only realistic truth; as the current situation is a hide and seek game between banks, names on issuers of payments, offshore account holders and the government itself operators will continue to seek ways to process payments back and forth to players as it is unrealistic for them to step out of the market; for as long as the law is at its current state it will remain a game of hide and seek which will lead to fiascos of the sort mentioned above. The congress has to finally understand that the current situation does not solve the problem and it will only make news of this sort hit the headlines and supposingly become heroic acts with absolutely no reason.

So what are they trying to say; they managed to become heroes because they caught someone that had managed to set up banking facilities that was able to pay winning players or allow players to make wagers; this gentleman found an opportunity he had the connections to set up banking and he made a living off it; if they don’t like it they should consider thinking about the law in act at this point. The bottom line is that when a player wants to play he will play and keeping the legislation GREY will only give opportunities to fraudsters to process money from legitimate institutions and run away with it due to incapability of the institutions to go to authorities with a winning cased.

These news do not impress us one single bit a change has to be made and it has to be made now as the current situation is just leading to a total chaos.

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