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It’s Pretty Obvious That The “FBI Letters” Make a Case For, Not Against, Online Gambling Regulation

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An intense debate recently broke out on a Facebook post by Rich Muny, VP of Player Relations for the Poker Players Alliance, when political consultant Cheri Jacobus chimed in with opposition to efforts to regulate internet poker in the US.

Ms. Jacobus continuously referred to the “FBI letters” on the subject, which ostensibly demonstrate the dangers of legalizing internet poker.

But when you take a closer look at these two letters, they fall woefully short of making the case for opponents. It could be argued they, in fact, make the case for strict regulation.

Let’s start with the letter from 2009.

2009 letter from FBI reveals agency’s lack of concern regarding online gambling

In this 2009 response to a series of questions posed by Rep. Spencer Bachus, Asst. Director Shawn Henry does his best spin maneuvers, but in the end, falls short of the mark.

Some critical excerpts:

Question: “Does technology exist that could facilitate undetectable manipulation of an online poker game?”

Answer: “Technically, the online poker vendors could detect this activity and put in place safeguards to discourage cheating, although it is unclear what the incentive would be for the vendor”

So that would a “NO.” By the way, the incentive would be that such measures are a prerequisite for doing business as a licensed vendor.

Question: “Could technology be used to illicitly transfer or launder money in the guise of innocent participation in an online poker game, or the undetectable theft of money from one participant in such a game, by others acting on concert?”

Answer: “Once again, this activity could be detected by the vendors, but at what cost?”

So, that would also be a “NO.”

Question: “Please detail any known or alleged incidents of online cheating, particularly efforts by online casinos themselves, to manipulate the outcome of games using technology such as pokerbots, for example”

Answer: “The FBI has no data in this area”

So, that would be another “NO.”

Now, the question regarding age and location verification is less cut and dry. Mr. Henry’s makes assumptions as to what vendors might use for these purposes, merely using credit card information and IP addresses.

But there is clearly more advanced technology that can be utilized, and greater steps taken in a regulated environment to address these concerns. These are issues that need to be raised when creating legislation and regulations, not arguments for leaving online gambling in its current unregulated state.

Read the whole letter here.

2013 letter makes a compelling case – FOR regulation

In a second letter from September of last year, as a response to questions from Congressman Bill Young regarding potential money laundering, Deputy Assistant Director J. Britt Johnson points out that physical casinos remain popular venues for money laundering.

That the Las Vegas Sands Corporation recently agreed to pay $47 million to settle money laundering charges suggests that to be true.

And although Mr. Johnson outlines possible methods criminal entities could use online poker to launder money, he undercuts them by saying “Many of these methods could be detected and thwarted by a prudent online casino, for example, by blocking software designed to enable online anonymity. However, some sophisticated methods would be difficult to readily identify or deter”

Difficult, but not impossible.

The fact is, as long as it is easier to launder money elsewhere, grand conspiracies to launder money in a well regulated, US-only internet poker market are implausible.

Safeguards need not be 100% foolproof to be effective, if they make the undesired activity so cumbersome as to render it impractical.

Read the complete letter here.

Bottom line: the greatest danger lies in the unregulated market that already exists

On the whole, these FBI letters point out the need for regulation of internet poker in the US.

Because we must remember that internet poker and online casino play already exists in all 50 states, and largely in an unregulated manner.

So if the scenarios imagined in these letters could exist, then they already do exist in the absence of regulations. And the FBI makes it abundantly clear that it is possible to detect and deter those imagined scenarios as well, so long as vendors are compelled to do so.

This is an argument for regulation, not against.

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Curtis Woodard
- Curtis is a recreational poker player from Seattle, WA who advocates for state ipoker legislation. He is the founder of the Washington Internet Poker Initiative and sponsor of Initiatives 582 and 583. Catch him on Twitter at @curtinsea and @ipokerwa (WIPI).