Online Poker, Jurisdiction and Legal Confusion.

I've recently become interested in playing poker online (No-limit Texas hold 'em to be precise). I came across a case where a player's money was essentially confiscated (around $50,000) because of alleged cheating. The player attempted to sue the website and the case is still ongoing. It brings up an important issue of jurisdiction - would the jurisdiction be where the player lives, where the site is hosted, or where the business is located? It is a nightmare of jurisdictional problems.

More obscure than that is the poker laws in Australia. This isn't a small industry, some estimates have put the amount of money spent on online casinos at around 300 million a year. Is it legal to gamble online in Australia? Yes. Kind of.

The federal legislation prohibiting online gambling in Australia targets the suppliers of prohibited gambling services, not the customers. It becomes more complex when the State laws interact with the federal law - e.g. in Queensland or the ACT you will be breaching the law if you knowingly participate in unauthorised gaming (where supplier is not licensed to provide).

The Interactive Gambling Act 2001 (Cth) states that it is an offence to provide interactive gambling services to a customer physically present in Australia. The offence applies to both local and foreign interactive gambling services providers. However, realistically only the foreign interactive gambling providers that have some connection to Australia are likely to be prosecuted. Some Australian providers are allowed.

"Interactive gambling services" are defined as "gambling services" provided, in the course of carrying on a business, using:

* an internet carriage service;
* any other carriage service which has at least one point in Australia;
* a broadcasting service;
* another content service; or
* a datacasting service.

"gambling services" are broadly defined as:

* A service for making bets or introducing individuals to other individuals who wish to make bets; or
* A service for the conduct of a lottery or for the supply of lottery tickets; or
* A service for the conduct of a gamewhich is played for anything of value and which involves an element of chance (games “predominantly of skill”, such as computer games, fall outside the definition of gambling services and are not prohibited ; or
* any gambling service (within the ordinary meaning of that expression) that does not fall into any of the above categories.

Express exemptions exist for:

* A telephone betting service.
* A service for online wagering - for example, on a horse race, a harness race, a greyhound race, on an event or a series of events or (provided bets are accepted only before commencement) on a sporting event.
* A public gaming service (that is, specific gaming services provided in licensed pubs, clubs or casinos including linked poker machines in clubs).
* A gambling service associated with a particular broadcasting or datacasting program, or where its sole purpose is to promote goods or services that are advertised on a broadcast service. Examples are interactive TV game shows and promotions with entry fees in the form of a 1900 telephone number.
* Online lotteries and online sale of lottery tickets (but not online scratch or instant lotteries).
* Contracts that are financial products within the meaning of Chapter 7 of the Corporations Act 2001 (Cth) . This includes contracts for options, futures and agreements entered into on a futures market or a futures exchange.
* Exempt services as determined by the Minister.

The Federal Act prohibits the broadcasting, datacasting and publishing of advertisements for interactive gambling services in Australia. An example of publishing an advertisement in Australia would be to place it on a website which is aimed at Australian end-users.

So, at the end of the day we have a situation where the legality is completely obscured. Yet we have tens and tens of thousands of Australians who nonetheless gamble online everyday.

And I really fail to see how playing poker online is different to a casino. In a casino, at least, they take a larger proportion of the rake (i.e. every hand played, the casino takes a certain amount - online, the 'rake' is much smaller and at a fixed cap). Further, if you're playing the video-game slots, (or indeed, blackjack or roulette), the house is always has an advantage to win. You cannot say the same for poker, where the skill of the players is the deciding factor, and the casino really is unconcerned with who wins or loses, because they always get a share of the pot - they just want as many people to play as possible. One of the biggest sites, PokerStars, has around 13 million registered players. Joe Hachem, the first Australian to win the World Series of Poker in 2005 earning him 7.5 million dollars, plays online at PokerStars.

I think it was Lincoln who said that to expose a bad law you should enforce it as strictly as possible. If the laws regarding online gambling in Australia were enforced as strictly as possible they would likely piss a lot of people off which politicians wouldn't be too keen about.

Or they could just recognize that practically the laws aren't enforced, and hence should change.

My 2 cents.