The state of Washington has a ban on online gambling, specifically including online poker (which some contend is not gambling). According to the prosecutors, Secure Money sent payments to online poker players in Washington for using online gambling sites in violation of state law.

Seven Washington residents are named as having received their online poker winnings from online gambling sites via payments from Secure Money, Inc. In addition, in January of 2009, an agent with the state’s Gambling Commission began playing poker at the Ultimate Bet online poker website. In July, he requested to be paid $200 in winnings and he later received a check from Secure Money, Inc. The check listed the payment as being for “payroll.”

Secure Money, Inc. is a Canadian company but also does business in Las Vegas, Nevada and Tampa, Florida. They are in a lot more trouble than with Washington’s Gambling Commission, though. As an Assistant U.S. Attorney stated, “Processing checks that represent the funds derived from illegal gambling…constitutes a violation of the money laundering provisions” in federal law.

That means that because Secure Money processed payments for a type of transaction that is illegal in Washington and was used as a go-between for the gambling websites to make the payments look like “payroll” transactions, they are guilty of the federal crime of money laundering. In addition, the payment processor does not have the required licenses to operate a money transfer business in Florida or Nevada.

Though a seizure warrant has been issued for the funds in question, no criminal charges have yet been filed against Secure Money or any online gambling website. In addition, there is no word of the Washington residents being charged.

The decision could impact the rest of the country. As more and more states make decisions on this issue, if there ever becomes a consensus, either that poker is gambling or a game of skill, any states that have not yet made a ruling on the matter might follow the common opinion.

For that reason, the recent statement by senior Assistant Attorney General Sonny Jones was particularly surprising. When speaking before the court, Jones said that casual home poker games are not made illegal by a statute that bans card and dice games. “It is our position that this statute does not encompass the Friday night poker game or the penny ante poker game,” he said.

Even Chief Justice Jean Toal was surprised by the concession that “there are some forms of personal card playing in your home, among friends, that involve money, that are not gaming.” Section 16-19-40 of South Carolina law states that unlawful games and betting includes “any game with cards or dice,” whether they are played at a liquor store, house, “barn, kitchen, stable or other outhouse, street, highway, open wood, race field or open place.”

It is the attorney general’s position, though, that the statute is referring to gambling businesses – large games where those who host the game take a portion of the money. According to Jones, the case in question involved an organized “house of gambling,” rather than a casual game. According to Jones, there were so many people at the Mount Pleasant poker game that there was overflow traffic parked at a nearby business.

In 2006, authorities raided a house in Mount Pleasant, South Carolina and seized several thousands of dollars in cash, a small amount of marijuana, and ticked approximately 25 people for illegal gambling. Upon a circuit court overturning the conviction of a local judge, the case reached the state Supreme Court. Though Jones says that it was an organized game, Billy Wilkins, an attorney representing the defendants, argues that poker is “not gambling because it is predominantly a game of skill.” He also argued that the location in question was not a house of gambling because the building was still used as a residence and not only as a poker room.

The new law defines those who are guilty of “establishing or running a gambling house” and allows the red government to sentence the guilty parties to up to 10 years in prison as well as levy stiff fines. Under the new law, you are guilty of establishing or running a gambling house if you establish a gambling website in mainland China, establish a gambling website overseas that serves Chinese customers, establish a gambling website and provide it to others to organize gambling, act as an agent for the gambling website and take bets or share profits with gambling websites.

That last one is the biggest change. Under the new law, any business partner of online gambling websites could potentially be violating Chinese criminal law. I’m pretty sure if I ever visited China I could be arrested under this new law, which is one of many reasons I never plan to visit China.

Though the law is new, the crackdown on online gambling is not. Though never a fan of freedom, this year China decided to place a new emphasis on making sure people are not able to spend their own money on casino games, so they have gone after sports betting and online gambling operations with a new vigor.

Since beginning the new crackdown in January, China has arrested or detained more than 7,360 people and frozen nearly 1 billion yuan (equal to $148 million USD). The Ministry of Public Security states that they have dealt with 1,364 cases involving online gambling and broken up more than 130 “gangs” connected to offshore online gambling companies.

The Greek government, in an attempt to add revenue to a nation being crippled by debt and a workforce that isn’t used to actually working for their money, has introduced legislation that would legalize online gambling in the country but require offshore online casinos, sports books and poker rooms to acquire licenses from the Greek government. In addition, the online gambling companies would have to set up servers in Greece, process their financial transactions within the country and operate using a Greek domain name.

All of those moves are intended to bring money that Greeks are currently spending on foreign operators back into the economy. It’s a small fix, but every little thing counts when you’re facing total economic collapse, so I wouldn’t expect the legislation to get a lot of opposition within the Greek government.

The online gambling legislation would also allow the Greek government to block the ISP of any foreign online gambling website that did not obtain a license and meet their other requirements. In addition, it would allow the government to stop and prosecute any illegal online gambling transactions involving Greek citizens.

The online gambling legislation is scheduled for debate this month and if passed, has a target date of May 2011 for full implementation.

Here’s another interesting variable, though. Online betting is perfectly legal there. As if to confuse things further, today Powerbet Gaming spoke up and reminded the world that their enterprises are completely legal and sanctioned by the government.

Powerbet Gaming released a statement that said that “there is considerable confusion among members of the public, banking institutions and the media regarding the legal position of online gambling and betting in South Africa.” Okay, I definitely agree so far. They then went on to say that the online gambling that is banned is online casino games. However, sports betting and online bookmaking “has been offered legally in South Africa for several years, within a well-established legal framework, and administered by provincial and national boards.”

The reason Powerbet wants to make it clear that online betting is legal in South Africa is that they are the parent company of Voltbet.com, an online betting site that is based in South Africa and licensed by the Western Cape Gambling and Racing Board. According to Powerbet Gaming, there is no legal ban on placing a bet with Voltbet or similar companies.

If you’re confused then that would put you in the majority. To me, the only thing that seems clear is that nothing is really clear. Isn’t government regulation and bureaucracy great?

I would expect such a thing in Saudi Arabia, Iran or Syria. Israel, however, prides itself on being a bastion of freedom in the Middle East. They pride themselves on being a symbol of Western civilization, technological advances and liberty. For the most part, this is true. The people of Israel, regardless of race, religion and socioeconomic status, live mostly free from oppression and government control. Like the United States, though, the government has grown over time while spending more and more money, putting the nation in the red. Facing tough economic times, the country needs extra revenue now more than ever, so this would be a good time to legalize online gambling and tax it, but the country is going in the opposite direction.

Last month, Israeli police began visiting the internet service providers (ISPs) in the country, brandishing orders to block access to overseas online gambling websites. The police handed over a list of blacklisted websites, including their IP (Internet protocol) addresses. The ISPs are ordered to block those IP addresses to prevent Israeli citizens from being able to access online gambling sites.

There are several problems with this. First of all, though Israel has every right to enforce their own laws, I am against laws that ban online gambling in the name of protecting the people. Let the people protect themselves. Secondly, using an IP address to block websites is not very effective, since the online casino owners can simply start a new website with a different IP address. People smarter than me can also find ways of faking or cloning IP addresses. Some also say that the law the police are using applies only to brick and mortar casinos, not online casinos, and therefore the government is overstepping their authority. Since I’m not familiar with Israeli law, I don’t know if that’s the case.

In any case, most ISPs are cooperating fully with the orders, though some plan to contest the orders in court. It will be interesting to see how this plays out. Israel isn’t the only Western or Western-influenced country to attempt to censor the Internet by blocking certain websites. Australia, France and Norway come to mind.

This isn’t the first time that gambling fans in the Tar Heel state have been targeted by lawmakers. Dating as far back as 1791, most forms of gambling have been illegal. In 2006, the state passed laws that banned video poker. That same year, Congress passed the Unlawful Internet Gambling Enforcement Act, which allows the feds to go after financial institutions involved in transactions related to “unlawful” online gambling, whatever that means.

Last year, North Carolina’s legislature passed a law banning online gambling. The law targeted online slot games, or “server-based electronic game promotions,” as it is worded in the law. That shut down the online slot business at Internet cafes, but the gamblers found a way around the law.

As a way of complying with the letter of the law while still allowing customers to spend their money as they please, Internet sweepstakes cafes were established. These establishments and the games they provide are legal because they have predetermined sweepstakes systems for the awarding of prizes, rather than it being done in an online pool. In addition, the sweepstakes machines don’t pay out to the players, since that is banned by a different state law. Instead, players get their winnings from a teller in the café.

If House Bill 80 becomes state law, North Carolina residents will lose yet another form of gambling and the Internet sweepstakes cafes will have to shut down. The law would take effect on January 1, 2011, so the cafes would have to be closed by then.

Back in February, China’s Ministry of Public Security placed a new emphasis on putting an end to online gambling in the Middle Kingdom. Since that time, they have arrested over 3,600 suspects and frozen over ¥700 million in funds, according to the state-run Xinhua News Agency.

Gambling – both online and land-based – has been banned in mainland China since the communist government took power in 1949. I think it’s because they don’t like an individual having an influence over whether their amount of money gets larger or smaller. The government wants to be the one that decides that (after all, there are state-run lotteries).

With the World Cup taking place in South Africa, China is currently placing an emphasis on sports betting. All overseas online casinos and sports books are banned from accepting Chinese customers. China monitors those sites to look for activity from its citizens. If any get through, there can be swift “justice” exacted upon the Chinese citizen. Of course, if you’re a Chinese citizen, there’s a good chance that the Communist Party of China monitors everything you do anyway, as we have found from the controversy surrounding their hacking of Gmail.

China defends controlling how people spend their money, what information they get from the news, and what terms they can search on the internet on the grounds that they are protecting the nation by removing things that would harm the people. Letting people gamble is bad because it’s not good for them. Engaging in nuclear proliferation with North Korea – a nation that might be crazy enough to start a nuclear holocaust, denying freedom of religion, freedom of property and the right to vote for their national leaders is what’s best for the people, though.

I know, I know. It’s just crazy. They’re acting like the government is supposed to work for the people or something. Late yesterday, the Rhode Island House of Representatives passed a bill authorizing a voter referendum on gambling expansion. Hours later, the state Senate passed the bill. The bill now goes to Republican Governor Donald Carcieri, who is expected to sign it. If he does, that sets the table for a voter referendum during the November election.

The gambling expansion at issue involves to existing state-licensed slot parlors, Twin River in Lincoln and Newport Grand in Newport. If the referendum is passed, the slot parlors could be adapted into full-fledged casinos, including blackjack and other popular casino table games.

The bill passed the House on a 62-12 vote and the Senate on a 21-14 vote. Representative Peter Petrarca, a Democrat, stated that he was excited about letting the people decide because they “are intelligent enough to know what they want to do,” thus contradicting the official Democratic party platform.

Not everyone is excited about it, though. Fellow Democrat Senator Teresa Paiva, who represents Newport, isn’t a fan of gambling expansion in her community. Many lawmakers expressed concerns for possible detrimental effects on the community, such as in increase in gambling addiction.

In the end, though, the lawmakers did the right thing. There are pros and cons to everything and in this case, they’re letting the people decide. Of course, this is also a clever way of protecting themselves politically. Gambling is a controversial issue and these lawmakers will be able to avoid responsibility for the outcome of the vote because they didn’t decide; the people did.

Rhode Island is seeking gambling expansion in part because Massachusetts is considering the same and they are worried about losing gambling customers across the border. In this tough economic climate, many states are looking to gambling expansion, including some considering legalizing and regulating intrastate online gambling.

Not much, to be honest. The law makes financial institutions responsible for blocking transactions related to “unlawful” online gambling, though it doesn’t outline what is unlawful. UIGEA does not constitute a federal ban on online gambling and no such ban exists, though some states do have a ban on the books. Players cannot be punished under UIGEA; only the financial institutions can.

A result of the law is that many online casinos, sportsbooks and poker rooms have stopped accepting American customers, afraid that they or the players won’t get paid by the banks. However, most of those online gambling sites had already made the move and left the American market. In a sense, though it was not yet in effect, players have felt the effect of UIGEA for the last 4 years. Another effect is that VISA and MasterCard block transactions to and from online gambling sites, but again, they made that move before today. In a sense, the UIGEA taking effect today only matters in a symbolic nature, because it has affected the American online gambling market since 2006.

To some, it may seem surprising that the federal government would seek to control the financial industry in such a way and take liberties away from the people, but America has moved a long way from its roots and no longer resembles the collection of free states that the Founding Fathers created. It started in the early 20^th century under Woodrow Wilson, when the government expanded its power in a time of war. The Wilson administration controlled public opinion using a propaganda machine that would later be copied by Nazi Joseph Goebbels and imprisoned anyone who spoke out against the government. Many practices, such as the banning of books and prohibition of alcohol, were done in the name of protecting the people.

In the 1930s, FDR followed in his footsteps, imprisoning political dissenters, running internment camps for German and Asian citizens, and unleashing a New Deal economic policy that prolonged the Great Depression all in the name of an expansion of government power. Again, it was for the good of the people. Now we have the Obama administration taking over the healthcare industry and the financial sector. It is, of course, for the good of the people, to save us from another recession.

In between we had Harding, Coolidge, Reagan and a few others who attempted to take control away from the government and give it back to the people. The result in each instance was great economic prosperity. That is why there is now hope for a complete repeal of UIGEA and legalization of online gambling. Massive government takeovers always leads to a backlash and right now you can see it in the Tea Party movement. That is why I wrote earlier that the Tea Party movement is the best chance we have for a repeal of UIGEA. A Congress with many pro-gambling Democrats and pro-liberty Republicans would do the gambling community well.