Monday, March 25, 2013

The Other Shoe Cometh: U.S. Casinos Push For International Access

Nevada Gov. Brian Sandoval signs Assembly Bill 114, the online gaming bill, on Feb. 21, 2013 / AP
And the hypocrisy is complete. After seven years of violating international treaties, ignoring the WTO, and bullying other countries and companies, casinos in the U.S. now want access to gamblers in other countries. As this article from The Financial Times states (you can't read it from this link because the Times are idiots. You have to Google search the title and get to it through that),
Nevada also passed a law legalising online gambling: casino companies in the state are pushing for a provision allowing for “international compacts” to be added to the law in the current legislative session, according to people familiar with the situation.

Agreements between US states and countries such as the UK – which has a regulated online gaming market – would be the first step towards a regulated global gaming industry which could transform the fortunes of operators on both sides of the Atlantic.
This is disgusting, infuriating, maddening. I can't conjure adjectives strong enough. They use the U.K. as an example for a possible partner. For one thing, the U.K. is one of the countries that was freaking bribed by the U.S. to keep quiet over the UIGEA. For another thing, the U.K. itself is embroiled in legal problems with casinos that service its own "regulated" market for trying to block access, in blatant violation of free trade agreements. This would be two countries, neither of which has their house in order, joining forces in a business that neither seems to understand. Oh yes. Nothing can go wrong with that.

The article continues,
Compacts between states and other countries would greatly expand the number of potential players and solve “the liquidity problem” caused by limiting play to residents of a particular state. “Liquidity in a state like Nevada is irrelevant unless you have compact capability,” said one Las Vegas-based casino operator, which is pushing for legalisation.
My mind is blown. Liquidity problem? They have no comprehension whatsoever of the consequences of opening one's business to a broadly competitive marketplace. Their tax and regulatory system works only because it is limited to those within their borders. This isn't a liquidity problem, it is a liquidity state. By that, I mean that the liquidity (money) available to them in this particular arrangement of variables only works because of that arrangement. Changing one variable (size of the market/ease of access) necessarily has an effect on all other variables, thus destroying the financial equilibrium. The block-headedness of the companies and politicians is amazing.

Even if the agreements discussed are only between U.S. states, whichever state has the lowest tax will automatically get all of the casinos. This will piss off the other states in the agreement, and they will either lower their taxes (not very popular with the voters), or they will reneg on the pact... which is precisely what the U.S. has already done with the UIGEA and the WTO.

We appear to find ourselves in the same, damned situation all over again. I'm glad to see that we are learning from the past. It really gives me hope for the future.

Crimes Of The American Empire

The government, which was designed for the people, has got into the hands of the bosses and their employers, the special interests. An invisible empire has been set up above the forms of democracy.
- Woodrow Wilson

On the cover of Puck published on April 6, 1901, in
the wake of gainful victory in the Spanish–American
War, Columbia – the National personification of the
U.S. – preens herself with an Easter bonnet in the
form of a warship bearing the words “World Power”
and the word “Expansion” on the smoke coming
out of its stack.
I briefly mentioned it in my earlier article on Robert Stuart, and it’s a point that seems apt to focus on now. To wit, the Stuart case seems less like the overreach of a single state and more like the continuing opinion of the entirety of the United States: we can do whatever the fuck we want.

The Obama Administration (and the Bush Administration before it) has made plainly clear that the U.S. Government will be violent, belligerent, and break any law it sees fit in the pursuit of whatever. Is something legal in your country? We don’t care! If we don’t like it, we will go after it. This is why the WTO, NAFTA, and every other “free” trade agreement is an increasingly bad joke. We will go after your citizens. We will go after your businesses. We will go after you.

What I think infuriates me more than any other element of this is the immense history that the U.S., and indeed all powerful nations, have regarding this sort of behavior. It started with the rise of colonialism and was passed down to its children: Industrial America and Japan. It is what Noam Chomsky refers to as “really existing free-market principles.” By that he means the principle that free market responsibility only applies to the weak. Those who already have power manipulate the world to ensure that they never take responsibility for their actions. When the weak get uppity and demand actual equality, the strong will use “laws” to legitimate actions intended to again oppress the weak. This is The American Story.

So just as with Antigua and the WTO, what we have with New York is a judiciary acting as the enforcement arm for an industry that doesn’t want to have to actually compete on a level ground.1 Thus, the competition is being labeled as illicit, and as such must be stamped out. Online gambling? That’s wrong. Landed gambling? That’s fine. Online Keno? That’s wrong. Keno in a gas station? That’s fine. Online slots with a Return to Player (RTP) of 98%? That’s wrong. Lotteries with an RTP of 40%? That’s fine.

The hypocrisy inherent to this situation is enough to make my soul bleed. Oh sure, the U.S. will claim that they are “defending its citizens” from those who would take advantage of them, but that assertion doesn’t withstand even the slightest analysis. And even if we assume that we don’t know that excuse to be a pile of horseshit, it is still nauseatingly hypocritical. How many operations in the U.S. are feeding off of the populations of other countries, with nary a peep from U.S. officials? Of course, we don’t actually know, because U.S. officials aren’t making a peep. As this article at Foreign Policy Magazine explains:
As the world’s leading antidrug campaigner, the United States has spent tens of billions of dollars in recent decades trying to stop the smuggling of drugs into the country (even while doing relatively little to stop the flow of guns smuggled out). (Emphasis added)
Guns leaving the country? Who caaaares?! That’s not our problem, man. Marijuana coming in, though? For that, we need to throw more people than every other Western nation combined into jail. Pirated DVDs? We need to go on a multi-billion-dollar crusade across the entire planet. Online gambling? We need to violate international treaties and threaten small countries. When we are wronged, the world must stop. When others are wronged, too bad.

To say the least, this is going to be vexing for those on the wrong end of the exchange. But it goes much further than that. It is both the wellspring of much of our behavior, and also the salt in the wounds of other nations. America suffers from a pathological inability to appreciate the perspectives of others.

People in the United States have spent the past many generations being essentially shielded from history.2 This is especially true for the elites of our country. To be fair, we have some fine little narratives of heroism and valor, and we have certainly known pain. But even our moments of greatest sadness pale in comparison to similar moments from most other countries. We don’t know that, though. Regardless of what Clinton said, we do not feel their pain.

We feel our pain. Nothing else. And we feel it intensely, regardless of how it sits in the grander scheme -- regardless of how our pain compares to the pain of others. To see this effect in action, look at how Pearl Harbor continues to define a large element of our national narrative. It will continue to do so long after all of the veterans of World War II are dead. And yet a key part of it is victory. It hurt, but American triumphed. We were the sleeping giant, awoken.3

The closest the U.S. has come to failure in the past one-hundred years is the Vietnam War. It’s a poor example, though, because it was the very definition of tilting against a windmill. As history’s vision gets ever-closer to 20/20, it is apparent that it would have been impossible to “win” Vietnam. Even then, people still rant and rave about it! We just cannot let that shit go! You can’t watch Fox News for more than an hour without one or another of their talking heads complaining about it. One dreads the coverage of Iraq and Afghanistan in fifty years time.

To be fair to our history, America does have a home-grown example of true catastrophe, and it wonderfully illustrates the cultural memory that these events trigger. Look at the ongoing and seemingly immortal obsession of many in the southern states with the Civil War. The South will riiiise again, is the cliched saying. It’s the only thing anyone in the U.S. can remotely call true failure, and it persists one-hundred and fifty years later.

We have never known true defeat, and the few things in our history that even approximate defeat are things with which we are obsessed. And just like the myopic and tone-deaf cludge that we are, we are willfully ignorant of the trials and tribulations that define the cultures of other countries -- the things with which they may be obsessed.

Imagine yourself in the position of a nation whose narrative contains true failure. Imagine the narrative of China, which went from the world’s largest economy by far in 1820, to a slave of Britain after the Opium Wars. Compare Pearl Harbor to China’s experiences in World War II, where as many as 300,000 helpless people were massacred during The Rape of Nanking. After which, China received a colossal face-slap when the Rape’s principle architect was granted immunity by the Allies. Imagine yourself in the narrative of the Caribbean, where American and British domination begins with Christopher Columbus!4

Now imagine yourself as that nation, with failure and pain a deeply fundamental part of your psycho-social makeup, faced with the greedy demands of the United States. Exacerbating the pain is the fact that much of your narrative is peppered with failures at the hands of the United States! How do you think you would feel? You would be fucking pissed, that’s how you would feel!5

This situation has become toxic for many cultures. It’s why George W. Bush’s “cowboy” diplomacy rubbed so many the wrong way, resulting in Barack Obama receiving the Nobel Peace Prize for simply not being Bush. It’s why so many Americans are taken aback by the vitriol directed at our nation from countries like South Korea, France, and India. It’s why we, doe-eyed and innocent, cry foul when terrorists attack us. It’s why our free-trade agreements are crumbling.

We are utterly dominant and disgustingly oblivious to that fact. We demand that other countries fight our fights. We demand that other countries respect our laws. We demand that our grievances are redressed. What hurts us is most important, and we are legitimately blown away when other nations don’t agree with that. In the resulting conflict of interests, we will simply force other nations to see “rightly.” Everything about America’s crusade against gambling is a gigantic face-slap to our supposedly equal trading partners, and America’s history vis-a-vis the history of other nations is turning this situation into a clusterfuck of truly Brobdingnagian proportions.

To plunder, to slaughter, to steal, these things they misname empire; and where they make a wilderness, they call it peace.
- Tacitus

Just because the U.S. has not “walked a mile in another’s shoes” doesn’t make them the bad guys, you might say. Truly, our behavior is almost understandable, if not forgivable, because of our history of never knowing true pain. That is indeed correct. But I don’t rely on mere block-headedness as a foundation for pronouncing the U.S. as an evil empire. For an utter and absolute condemnation of our behavior, one needs to take another short stroll through U.S. history. The United States became the world’s largest economy by relying on the very things on which it accuses nations like Antigua of relying.
Contrary to the conventional wisdom, much of today’s cross-border crime problem is not new. In fact, states have struggled with this precise challenge for centuries. And far from being a passive victim, the United States has fostered as rich a tradition of illicit trade as any other country in the world. Since its founding, the United States has had an intimate relationship with clandestine commerce, and contraband capitalism was integral to the rise of the U.S. economy.
The author goes on,
A better understanding of the historical realities of cross-border crime might even reduce the perverse and counterproductive consequences of government crackdowns and redress the chronic lack of attention to the demand side of illicit trade.
I like this guy. I think that my choice of language would be a bit more maritime, but “perverse” is a more than serviceable descriptor. It is important to note that he is only talking about illegitimate operations.6This doesn’t take into account the incalculable damage and oppression done by “legitimate” American operations like our food conglomerates, legal weapons, tobacco, alcohol, etc. Indeed, agreements like the WTO, NAFTA, and the GATT before them were used as tools to legitimize forcing other countries to accept American economic domination. We have always relied, and continue to rely, on methods both “legitimate” and not-so-legitimate to further our goals. We are doing this now, and then we turn around and have the audacity to castigate other countries for the same behavior.

Look familiar? How quickly we forget.
If it were America with the online casinos in its borders, the U.S. would be pummeling other countries into submission to allow those casinos to be accessible by their citizens. But since it is the other way around, we have officials ripping up the lives of innocent people and destroying the economies of tiny nations that have little to begin with.

So let’s assume that Antigua is indeed a nation of horrible pirates. They are doing something corrupt, illegal, and genuinely damaging to the U.S. Let’s assume that Robert Stuart’s clients are a carnival of freaks frantically sucking away the lifeblood of hardworking Americans. Indeed, let’s assume that everything that American officials say about online casinos is true.

It doesn’t change anything.

America is complaining about all of the crimes that it has done itself, often gleefully, to the detriment of other nations. The very trade agreements being used against the U.S. were created for that purpose. Screwing other countries has been a central element of America’s rise to global power, and when other nations try to follow the same path, we slap them down and wag our finger at them like some twisted, psychopathic parent.

America is a hypocrite, through and through. We casually toss aside laws, oppress other nations, and oppress our own people. We lack any sense of broad narrative, with the near totality of our actions influenced by and predicated on American Exceptionalism. We do whatever the hell we please and then post-hoc declare it to be justified, rejiggering any laws necessary to support this claim. This case in New York and Arizona, and by extension the UIGEA, is merely the most recent example of this behavior, and we should be ashamed.

1: Example, after example, after example can be found of the U.S. government being used as a tool to oppress populations for the benefit of corporations. Perhaps the most glaring recent example was the revelation that the F.B.I., instead of actually working to stop criminals, was working with the major banks to infiltrate Occupy Wall Street protestors. So when one reads comments from U.S. negotiators saying “fuck off” regarding Antigua, what we are actually reading is the work of the shadowy hand of a corporation.

2: The past one-hundred and twenty years has been the U.S. show. If we look at the historical charts of the world’s largest economy, the U.S. being #1 was almost assumed. In 1960, with the world still reeling from WWII, the U.S. alone represented nearly 2/5 of the global economy.

3: Why do you think that quote is so well-known? Partially because it was prescient about Japan’s ultimate fall, but mostly because it glorifies the strength of the United States.

4:Indeed, this narrative was the seed that caused CARICOM to recently back Antigua in its fight after the U.S. threatened, Mafia-like, that Antigua would regret its actions. As though life could suck any more than it already does under the Western thumb.

5: How does the U.S. continue its economic hegemony if everyone hates it? It
’s one of the great success stories of modern economic hegemony. All a nation has to do is tie its interests to the interests of a wealthy, ruling class. Then, the powerful leaders in an oppressed nation will continue to do the bidding of a larger nation for guaranteed support in their continued superiority.

6: “Illegitimate” is a tough word to nail down in this context. “Legitimate” and “illegitimate” are both defined by laws, and laws are nothing more than rules laid down by a group that is recognized by other groups. There is no reason why any behavior is fundamentally legitimate while others are not. I think that the use of the word as meaning “generally recognized as lawful” is useful for the purposes of this discussion. It’s the opening that also allows those in power to manipulate the words by simply forcing everyone to generally accept something different than previous.

Saturday, March 23, 2013

Dear God, 888 Gets First U.S. Poker License

Oh lord, why? If there is a company on Earth that is going to give online gambling a bad name, it’s 888. Even Casinomeister despises 888, and that is truly saying something. We may as well dig up Meyer Lansky and have him administer our first official online poker efforts.

For those of you who are not steeped in the history of online gambling, 888 has been around for some time. They’ve gone by many names, which should give you an idea of how upstanding an operation they are.Founded in 1997, 888 quickly earned a well-deserved reputation for spamming the hell out of the entire planet and for not paying players. And for anyone who spent time on smaller, geek websites back in the late 1990s, they will remember websites overrun with banners for porn and 888. Indeed, because of this, the names 888 and Casino-On-Net (888’s other operation) are in my mind forever associated with breasts and back-door action. 888 became a company built on, around, and for vice in the purest definition of the term.

To our continuing harm, from this situation, 888 was integral to the rise of super-affiliates. Indeed, 888 was directly involved with its affiliates’ use of unethical practices to manipulate search rankings, using everything from scraping, link farming, and astroturfing to flat-out spam mailings. Their legacy is our current situation, where a search for “online casino” results in page after page of super-affiliates all hawking their “chosen” casinos... and, conveniently, 888 usually crops up on the first couple of pages.

888’s antics did not go unnoticed by regulators, other casinos, and watch dog groups. Starting in 2005, 888 was slammed with warning after warning. They were ostracized by other companies in an attempt to add at least an air of respectability to an industry that had hitherto been predicated on boobs and poker. As you can probably guess, this had little effect. 888 continued spamming like crazy and online casinos are still a cesspool.

While the industry may not be substantively different today, things are at least structurally different. We are still dealing with the damage caused by the rise of super-affiliates, but the global gambling landscape is much changed. We have a smattering of laws in major markets like the U.S., U.K., and Australia. We have a few mega-casinos that have eaten up a decent hunk of the market. And we have a small number of jurisdictions that have risen to prominence, meaning that there is at least the impression of regulations.

Again, though, the industry remains corrupt and I have seen little to indicate that 888 is any different from the worst of the lot. They are simply bigger.

In an interview with The Verge, PR rep from 888 Andrew Benbow defended 888’s current state.
888 still has an expensive affiliate marketing program, but the company says it has changed its spammy ways. There was an arms race for brand recognition back when the online gambling industry was still fairly new, said public relations officer Andrew Benbow, but now 888 only engages in “very good targeted marketing.”

“The 888 back office is generally thought of as being the best in the industry,” he told The Verge. It’s not in the company’s benefit anymore to annoy people about the brand name.
I hope that he will excuse me for being skeptical. Not only because I cannot think of a single online casino that is acting in a truly ethical fashion (except maybe Pinnacle), but because 888 continues to benefit from its earlier practices. I just did a Google search for “online casino.” Page one contained links to the expected super-affiliates and Wikipedia, but guess who else was standing on that hallowed ground? 888.

888’s presence there has nothing to do with their quality. For over a decade, they were legendary for offering terrible service, glitchy games, and poor payouts. Their presence on the valuable front page of Google’s search is entirely because of their underhanded and corrupt practices from years ago. They are a castle built of ill-gotten bricks, and we continue to reward them for this.

Thursday, March 21, 2013

The Strange Case of Robert Stuart

On a cool February morning in 2011, the sun barely over the horizon, police special forces, some wearing full environmental camouflage, descend upon a house. After setting up a perimeter, they squeeze it shut, enveloping the house from all angles, assault weapons drawn. Apparently, they weren’t very good at being sneaky, because there was no need to bust down the door. The homeowner answered the door and let the police in.

One would expect that for such a massive operation, the police must be raiding a meth lab, whore house, or, at the very least, a cock fighting ring. That assumption would be completely wrong. Instead of some small-scale Manuel Noriega, the police were there to arrest a computer programmer: Robert Stuart.

Surely this programmer had been active in high-level hacking. He must have been instrumental in digital incursions into banks or government agencies. At the very least, he was a member of Anonymous. Again, one would be wrong for assuming that. He made software for online gambling. This could theoretically be illegal, and lord knows, the history of gambling isn’t exactly savory. But as we will see, Stuart isn’t some Meyer Lansky-type character. He and his company made software that in itself was unremarkable and completely legal, and then sold it to companies in countries where online gambling was also completely legal. He wasn’t involved in the gambling, nor did he himself apparently gamble. Obviously, he had to be punished.

Welcome to the American legal system, bitches.

So who is Robert Stuart? He’s a programmer. Specifically, he created the back-end software (the stuff that users don’t usually see, but what determines and manages what the users do see) for online sports books. He is the very definition of mild-mannered. Now, it is generally accepted as wrong to judge a book by its cover in any instance, but in this case, it seems safe to conclude that calling him a criminal in need of a SWAT team is downright stupid.

Even if the SWAT invasion was actually appropriate, there was little justification for authorizing the raid in the first place. Stuart’s company, Action Sportsbook International, isn’t an element of the actual mechanism for accepting bets. It’s not affiliated with any casinos. All the software does is organize the data of things on which customers can bet. He is essentially offering database designs tailored to game management.

And it gets better! The disconnection is actually two-fold. Not only does his software have nothing to do with placing or accepting online bets, most of his clients are themselves not in the business of placing or accepting bets. ASI’s license allows its clients to modify and sub-license the software to the companies that are actually accepting bets. So, as it stands, we have Stuart, a programmer, whose product is sold to companies who are not doing anything illegal, who then modify it without Stuart’s input for other companies that are doing something that is completely legal in their country. No one, it seems, is breaking the law.

Let’s assume, for the sake of argument, that the police aren’t completely lying and one of the companies down the chain is indeed operating illegally in the U.S..1 That doesn’t change anything. Stuart isn’t involved with them. Stuart doesn’t know them. Stuart is in no way responsible for the actions of these other people. We don’t prosecute gun manufacturers for murders. We don’t prosecute Ferrari for speeding. It is well-understood legal precedent that a legitimate product used for illegitimate purposes does not put responsibility on the manufacturer of that product. It’s also just plain common sense!

But seeing as this is the American legal system, that didn’t stop anyone from going forward with the operation.

The raid turned out to not have been initiated in Arizona, but New York. Police officials from The Empire State collaborated with Arizona in the operation and apparently used The Copper State as something of a puppet. Why New York is so obsessed with online gambling and Arizona is not has yet to be answered. Perhaps because Arizona is too busy hating Mexicans.2

After the raid, and after all of his computers were hauled away, Stuart wasn’t charged with anything. Instead, he was brought in for questioning the next day. There, without any input from or interaction with a judge, Stuart was pressured to take a plea deal under the threat of having both himself and his wife sent to jail for thirty-five years.

The charges against him, which at this time were still unknown, would be dropped if he was willing to install “back doors,” secret access to a computer system, into his software. Thus allowing New York authorities to spy on various companies and gain access to user lists. Their thinking, if one can call it that, was apparently to track possible users in New York who were accessing as-yet unnamed casinos. If that involved stomping all over the rights of an innocent businessman, then so be it!

Photo: Ariel Zambelich/Wired
Stuart had the equivalent of a “Rent-a-Lawyer,” who provided such excellent legal advice as “just do whatever the police want.” He could have gotten better advice from online forums dedicated to dodging speeding tickets. So he acquiesced, at least initially. After some time, he became uneasy with being used as what amounted to a hacker to spy on the clients who were trusting him.
“They made it clear that they would do nothing. I was expected to do everything, to modify the system to allow myself to get in to get the information they wanted,” he says. “Their whole intention was for me to retrieve information from those databases that were located in foreign countries…. They were going to use me to get to the clients…. But I’m not a hacker, I’m a software developer.”
His reneging on the original agreement to be a spy is, according to Stuart, the reason why he is now being charged. He says that New York is retaliating. I suspect that it is less retaliation and more New York charging him because they need to try to save face after being exposed as bullies who may actually be breaking the law. As Jennifer Granick from Stanford’s Center for Internet and Society points out,
“Sending something to backdoor people’s systems and to steal customer data would violate the CFAA and would without a doubt be crimes in any country in Europe... Many of these people will not be Americans, and it’s not unlawful for them to gamble, but [authorities] are taking their usernames and passwords. Someone needs to be investigated, but I’m not sure it’s [Stuart]…. If I were his lawyers, I’d be investigating to see where they got the idea that this was okay.”
Where indeed. Perhaps they are taking their lead from the Federal Government in citing the statute of “whaddaya gunna’ do aboudit?” Regardless, this seems like the more likely reason for the indictment: if they don’t indict him, they are essentially admitting that they were trying to quietly side-step the law. If they admit that, they may run the risk of getting a stern talking to, or worse, a slap on the wrist! It’s so stressful being in a position of almost complete safety.

I’m getting ahead of myself with that. Before we begin an analysis of the failings of New York’s police, let's see for what Stuart was actually indicted? After eighteen(!) months from the initial home invasion, he was charged with a single count of promoting gambling. According to New York authorities, Stuart “knowingly advanced and profited from unlawful gambling activity by engaging in bookmaking to the extent that they received and accepted in any one day more than five bets totaling more than five thousand dollars.”

That’s not what the initial threats were, though. The greatest charge against Stuart was money laundering in the first degree — used as justification for three decades in jail and to which he initially pleaded guilty — a charge which mysteriously disappeared when he was actually indicted. In fact, more charges may have disappeared, but we don’t know, and may never know. The affidavit used to invade Stuart’s home is sealed. Even Stuart and his lawyer have never seen it. Neither have they been allowed to see which of Stuart’s clients are supposed to be violating New York law. So much for facing one’s accuser.

Shockingly, New York has defended its actions and insists that what it did was lawful. Because, haha, obviously they would admit to breaking the law! Police never do anything knowingly wrong, that’s why they’re the police and not the bad guys! And even if they do something wrong, it’s for the greater good. “Truuuuuust us!” they say.

In fact, that is the only defense proffered for the raid. Any further explanation would have required, ya’ know, words, and instead of making those words, New York officials took a page from the Federal Government’s playbook and simply refused to discuss the case. When interviewed by Wired Magazine, Daniel Alonso from the Manhattan D.A. was only willing to say,
“The provision you have questioned is perfectly consistent with the obligations of all law enforcement officials to follow state and federal law to secure evidence of criminal conduct... The staff of the Manhattan District Attorney’s office involved in this case, both prosecutors and investigators, have behaved ethically and consistent with their obligation to seek justice in every case.”
Stuart’s version of events, if true, casts serious doubt on these claims. Most, if not all, of the companies that would be using ASI software are based outside of the U.S. New York officials would thus be invading the computers of companies under the laws of other countries, likely without the knowledge of officials within those countries. Somehow, that doesn’t seem legal. Probably because, as Granick pointed out earlier, it isn’t. One has to wonder whether the state department is annoyed by what appears to be significant overreach.

As it stands, Stuart’s company has had its revenue more than halved. He is being forced to spend thousands of dollars defending himself in a state that is 2,500 miles away, and the case against him is weak at best. Obviously, New York has thrown down its gauntlet. They cannot turn back now. Their only hope is that Stuart either runs out of money, or some incredibly damning evidence is presented in support of their accusation. Otherwise, I cannot see them winning this case.

In my opinion, this is a colossal failure of both New York and our entire justice system. It doesn’t matter that Stuart is likely innocent of any wrongdoing; his business is damaged, his reputation is in the toilet, and he has to spend tons of money defending himself. It is a terrible miscarriage of justice and a perfect example of why transparency and oversight are necessary elements of any just society.

Moreover, the true criminals are the ones who will never face reprisal: New York authorities. They have smeared a person and a business, violated international treaties and laws, and done so with little concern for ever having to face consequences. They are free to violate rights whenever they please. Calling them the Gestapo is an exaggeration, but we’re getting far closer to it being accurate than we ever, ever, should have.
The prosecution of a commercial programmer for crimes committed by people who used his software would set a dangerous precedent for other software makers who might be held liable for how their legally licensed software is used, says Jennifer Granick, director of civil liberties for the Center for Internet and Society at Stanford University.

“It’s scary for software distributors, if someone happens to use their software for illegal activity,” she says. “If you know what people could use it for, and didn’t prevent it, did you take enough steps? What level of knowledge you need to have and all of that is not as clear as it should be [under current laws].”
Obviously, the representative of an organization that is trying to appear measured and professional can’t go as far as someone who is, say, an anonymous, pissed off, type-A, Internet popinjay. This is more than merely dangerous precedent! This is outright flouting of the law that the police supposedly represent. Considering the current state of American enforcement and judiciary, that officials are willfully ignoring the law and international treaties to further oppressive campaigns of pseudo-justice shouldn’t come as a surprise, I suppose.

While I may find hyperbole a better fit for the events, Granick’s more subtle point remains valid. This is a chilling case in the very legal definition of the term. Namely, it chills otherwise legitimate behavior because people are afraid of being attacked by an oppressive government. If a software developer who is not doing, and has never done, anything wrong can simply be hammered in court because some authorities somewhere in the country decide to be oppressive, what is going to happen to economic development? Will it go to another country? Will it even happen at all?

It has already had a direct and immediate chilling effect. Stuart’s company had over twenty clients. He now has ten. Ten. He lost over fifty percent of his client base in a matter of weeks because of this. Just think about how startling this must be to his clients! They are buying something legal, from a lawful company, to do something that is legal where they are operating, and now they discover that authorities in another country are trying to illegally strong-arm the company to spy on them. How many companies are going to do business with companies in the United States if they know that authorities here will disregard laws and treaties to spy?

I’ll venture a guess. None. None.

I am very happy and thankful that Stuart decided to fight the case, because if he hadn’t, we wouldn’t know that this all took place. We wouldn’t know that New York decided to take both interstate and international law enforcement into its own hands. We wouldn't have yet another example of justice failing in the land of the free, and the home of the brave.

1: I admit, I’m being a bit heavy on the vitriol, but I think that New York deserves it. In their defense, there are many companies that are serving American gamblers through illegal channels. By that, I mean that there are elements of the operations based in the United States. As such, efforts to fight these operations are legitimate.

2: Arizona does have some history of this. Aside from noted scumbag Bill Frist, one of the primary supporters of the UIGEA was Arizona Senator Jon Kyl, who was instrumental in sneaking the bill through congress without debate. Kyl, because he is also a scumbag, just less-so, would later sabotage government functioning because of his anti-gambling crusade. He has retired from congress and has entered the "revolving door" of politicians becoming lobbyists after accepting positions at the American Enterprise Institute and Covington & Burling.

Friday, March 15, 2013

A Photograph

Mark Peterson/Redux, for The New York Times
There is a profound, Diane Arbus-like beauty to this photo. Perfectly chosen for the article. It was perhaps intended to be something of a freak show (lord knows, the NY Times is known for making subtle, condescending digs in its articles), but I think that it is just wonderful. Photograph taken for this article.

Thursday, March 14, 2013

Players Finally Receiving Full Tilt Poker Refunds

After nearly two years, players who had money tied up in the Full Tilt Poker blow-up are finally having their money returned to them. As many of you remember, FTP was a major poker website that was shut down by U.S. officials in April of 2011. How guilty FTP actually was of any infractions is unknown, because the U.S. has a tendency to ignore the law and fabricate trumped-up charges as regards online gambling.

The seizing locked up hundreds of millions of dollars in player money with, at least initially, little chance of getting it back. While I’m sure that the government tried to find ways to avoid paying players, they eventually made a deal with PokerStars, FTP’s primary competitor, in such a way as to get money back to players. It’s a little bit convoluted, but basically, PokerStars will buy FTP, brand and all, and receive a pardon of sorts from the U.S. government.

Part of the deal involves PokerStars paying the U.S. government $547 million over three years, some of which will be used to pay American players, and paying international players $184 million. The end result of this is that neither FTP or PokerStars must admit any wrongdoing. It’s unknown how much money is in the bank accounts of FTP that would offset these costs.

The charges against individuals from FTP and PokerStars, and to a lesser degree PartyPoker, remain. How well they will stand up in court is another thing. I say this because the primary tool, and the tool with the sharpest teeth, was The Wire Act. In 2012, after years of arguing otherwise, the Justice Department finally admitted that The Wire Act does not apply to online poker. The abandonment of The Wire Act was actually something of a necessity, since it says that illegal gambling is only sports betting. If they continue to assert The Wire Act, it could actually act as justification for voiding the UIGEA.

With The Wire Act no longer a potential foundation for charges, all they have left is a violation of the UIGEA, which is an unjust pile of nonsense. As columnist Jacob Sullum pointed out,
[New York DA] Preet Bharara seems to be haunted by the fear that someone, somewhere, may be playing poker. Last year, Bharara, the U.S. attorney in Manhattan, threatened an Australian payment processor with up to 75 years in prison for helping online poker companies do business with their U.S. customers. Last Friday, he announced similar charges against 11 people associated with the three leading poker sites serving American players.

If you type in the Web address for PokerStars, Full Tilt Poker or Absolute Poker, you will see a notice that the domain name has been seized by the FBI. The notice cites some impressive-sounding crimes, but the statutory language cannot conceal the legal weakness and moral triviality of Bharara’s charges.
This case is only the second time that the UIGEA has been used. That’s right. For all of the publicity and noise, this is only the second time. What is utterly insane is that everyone knows why this major law has only been exercised twice: it likely wouldn’t stand up in court. I guarantee, guarantee, that New York is desperately trying to get the defendants of FTP to take plea deals. And much like the Robert Stuart case, I hope that they don’t. I hope that they bring this ridiculousness right to the limit. Take it to the Supreme Court. Take it as far as you can!

Perhaps the biggest WTF moment out of these recent developments came about a month ago, when PokerStars announced that they would be buying a struggling casino, The Atlantic Club, on the Atlantic City boardwalk... ya’ know, the one that was washed away during Hurricane Sandy. This paves the way for PokerStars to re-enter the U.S. market via a landed operation. This is of course completely acceptable, because sucking the blood of Americans is totally fine just so long as the government is getting a huge cut. Otherwise, it is the deplorable action of criminals. Disgusting. Just disgusting.

I shall take this opportunity to again mention that Bill Frist, the man responsible for the UIGEA, is a scumbag of almost inspiring proportions and was rated as the most corrupt person in Washington. Doesn’t it just fill you with faith in government when people like him are creating our laws?

Sunday, March 3, 2013

Noam Chomsky Discusses the WTO

In earlier posts, I have discussed how the World Trade Organization was created specifically to further the interests of the United States. When the U.S. is being catered to, as they were in the Uruguay Round, the talks proceed. But the instant there is something that the U.S. doesn’t like, they will stonewall the proceedings until it simply dies.

Even when the laws are written by and for the U.S., they are sometimes used against the US. That’s kinda’ the nature of laws. Of course, this is unacceptable for the U.S.. This was the cause of the shift from GATT (General Agreement on Tariffs and Trade), to the WTO. GATT was created specifically to take advantage of American power in post-WWII international relations, and as such, it was enormously beneficial to the American market.

Technology and society shifted, as it often does, and the benefits of GATT also shifted, from the US to other industrial nations. This obviously couldn’t stand, so Reagan along with his buddy Margaret Thatcher pushed for the creation of the WTO. The first round of talks began in 1986 and the WTO was officially born on January 1, 1995.

It’s just a little bit of history repeating, though, and now the WTO is proving problematic for the U.S.. So, yet again, they are trying to rewrite the rules in their favor. Only this time, other nations aren’t the flaming piles that they were post-WWII, or the pliable little minions in the U.S. vs. Russia Cold War. They are actual nations, with actual desires, and they demand to be heard.

For your viewing pleasure, I present Noam Chomsky, a man far smarter than I. In his trademark, dulcet tone, he presents a stark, utterly depressing portrait of American economic hegemony. I believe that the video is from a 2003 series of interviews.

And just because I mentioned it in my article, afterward you can listen to Shirley Bassey and The Propellerheads singing History Repeating.