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Here Come De Judge

Welcome to Cybercourt.

The biggest question yet to be tested is "where does a cyberspace transaction take place?". Lawmakers around the world are on the attack against Internet gambling with a unseemly vengeance. Only pornography seems to have stirred up as much passion as there is in the attack on cybergaming.

The Internet has a huge potential for international trade in *services*. It is a medium or, if you prefer, a communication channel for the sales and payment component of cross-border trade.

The attack on gaming alone has not been well thought out by the *anti* lobby who fail to see that gaming can be considered an international trade in a *service*. Lawmakers may well find their attack on cybergaming has greater ramifications than they yet appreciate.

Laws and legal action targeted at cybergaming may be shot down in flames by legal precedence and/or trade agreements. The USA demands access to foreign markets for *services*. Take Hollywood movies, software, banking etc. How (in trade terms) can they deny access to the USA market for recreational activities such as horse racing and casino gambling via computer when they are sucking money out of other countries for entertainment and other soft services?

Have you got any idea of the amount of phone sex the USA sells to people outside the the USA? They advertise on late night TV down under: "Ring Las Vegas Ladies Now!"

The focus, soon to be tested, is the point of transaction of a cyberspace gamble. What is happening and where is it happening? Can you break a law in the USA doing something in another country?

This got me thinking about our friends in Liechtenstein and their claim that people *travel* to Liechtenstein when they play Interlotto.

Now if I were sitting in an apartment on the corner of 40th and Second Avenue downtown Manhattan (The Churchill, opposite Sherry's Wine bar)and I had in front of me an issue of Newsweek, say the edition out of Hong Kong, I might just find an advertisement for the German Lotto game. Now if I decided that the 45 million Deutschmarks on offer was attractive to me and I felt the cost of entry was within my means this is what I would do:

I would go to my desk and find some scissors to cut out the coupon and a pen to mark the numbers I wanted to play. I would fill in my credit card details and then search in my desk draw for an envelope. I would address the envelope to the address in the ad and, feeling extra lucky, walk downstairs to the US post box and pop the envelope in.

The ever-reliable US postman would shoot my letter off to Germany where it would be opened, the credit card details checked and the billing approved (no doubt on-line to the local Visa office) and my entry would be in the German Lotto draw.

Now I ask you, where did the *transaction* take place?

This is an important issue for Internet gaming and we grow ever closer to a few test cases in the courts around the world. Do US or European lawmakers have the right to tell one country what they can and cannot do in international *transactions* via electronic mail?

The credit card industry operates a world wide service that does nothing but electronic transactions though the international banking system. Many services can be *bought* by credit card; on-line gaming is just one of the latest.

Now my thoughts are, in this case, that the *transaction* took place in Germany at the time the funds were approved by Visa and my entry form entered into the lotto draw. It does not seem accurate to say the *transaction* took place in my apartment in Manhattan. Sure, I filled out the form there, put it in the envelope there, but did a *transaction* take place?

I think not.

Followers of my recent stories on Liechtenstein Interlotto will see the issue I am raising here in my lay legal terms. As you will note in the story "Scotty, Are You All Right?" and perhaps other previous stories I have a little difficulty understanding the lawyers for Interlotto when they are quoted as saying: "In the view of our legal advisers, any service provided on the Internet is geographically provided in the location that the Server - that is, the Source Computer - is located. In the case of Interlotto, this is in Vaduz,Liechtenstein.

The conclusion is that, since Interlotto is legal in Liechtenstein, it is legal for users of the Internet to "travel" to Liechtenstein in order to play Interlotto".

I have some difficulty with the term "travel" to Liechtenstein, so let us examine the concept a little further.

Let us, for a moment, return to my Manhattan desk. This time I switch on my PC and search Alta Vista for Lotto. I come across the link to Interlotto Liechtenstein and jump to the home page. I am still in Manhattan, that much I am sure of, however this is where I start to find the legal mind somewhat difficult to comprehend when they say I have "traveled" to Liechtenstein.

Based on their legal advice, Interlotto confidently says: "It is legal for users of the Internet to "travel" to Liechtenstein in order to play Interlotto". "The (recent) assertion of the European Association of State Lotteries and Lotto's (AELLE) that "Interlotto violates gaming legislation in almost all jurisdictions" might be accurate if Interlotto was being played in any jurisdiction other than Liechtenstein".

Now this I can comprehend. The game *is* being played in Liechtenstein, because that's where the *transaction * takes place, Si? If I type in my desired entry and my credit card number on the entry form which is *in* Liechtenstein, even though I have a copy of it on my Manhattan screen, I feel my *entry* has traveled to Liechtenstein, in a way no differently than the way my letter traveled to Germany. I sent the information; all that has changed is the *manner* in which I sent the information. Snail mail verses electronic mail if you like.

Now then, where and when did the transaction take place? This seems to be the crux of Interlotto Liechtenstein's legal position. (And no doubt the same with all cyberspace operators outside the USA). Now, as my credit card approval would take place from Liechtenstein to the local Visa office before my entry was accepted into the draw, I guess the transaction did in fact take place there.

• I accept that the Lottery is in Liechtenstein. (In *real* world physical terms).
• I accept that the entry form is in Liechtenstein. (In electronic form on a server).
• I accept that the Visa payment was made in Liechtenstein. (That is what the Visa statement will say).
• I accept that the Law of Liechtenstein will therefore govern the transaction. (Just as if I was there).
• I accept that I have sent information Liechtenstein to play the game. (Like the letter *went* to Germany).

In both examples I accept that the *information* has *traveled* to Liechtenstein and Germany, albeit by different means; I accept that the transactions have taken place in Liechtenstein and Germany. But have I traveled to these places as the lawyers would like me to accept? Well I don't feel jet-lagged , I don't *feel* I have traveled anywhere. With my Internet entry I haven't traveled as far as the post box on the corner. Something has traveled; in this case some information that allows me to play in those countries.

Now then, if the two transactions are almost identical )other than the means of transmitting the information), why the hoo haw about one and indifference to the other. Why don't we hear Hubert H Humpery (release three) and the North American Attorneys General ranting about the US Mail? It's a little dumb, since there is no difference in reality.

Why is the method the point of contention? Free passage of mail has always been a big issue in free societies. Censorship and the interference with the mail are pretty serious issues. In fact, I think there are some pretty serious penalties for interfering with the US Mail without good reason. (Drugs, Pornography etc.). So why is electronic mail, in this case the lotto entry, the same? Because it goes over the *wire*? So do faxes from US Post offices but I am sure they would be protected by the mail laws.

I wonder if these guys who are running around trying to create laws have really thought through a lot of this. Can you, like me, accept the idea that electronic mail and snail mail is all mail? Can you accept that a transaction takes place when and where there is the action required to complete the process? Other than the fact it's *gambling* it is not different to buying some flowers from Interflora for your German great-Aunt. Or, for that matter, buying a video of the skiing in Liechtenstein by mail order.

In my view there can only be one motivation for the attack: money and the state money-generating machine that gambling represents. But why is the Internet so different? Any individual who wishes can *go* to a place and gamble, even if it's banned in their own state or country. Reality says they *can* and *do* gamble by phone, fax and mail.

To gamble or not to gamble is a personal decision, just like to drink or not to drink.

Sure, gambling was once considered a sin (and still is in some countries and states). But in all honesty, can these states and countries who literally *promote* gambling now hypocritically say "gambling is evil - if it isn't our gambling". Look at Hubert H, Humpery, III who is trying to make a name for himself as an anti-Internet gaming crusader; part of his salary as Attorney General of Minnesota comes from state-sanctioned and -operated gambling.

To some degree I can understand not wanting *criminal* elements to operate gambling, (that is really a fear of crime bosses having money to corrupt public officials). I don't think they have to worry; big business has got that market cornered these days. We are not talking about criminals on the 'Net. We are talking about state-sanctioned or -operated, LEGAL, gambling operations.

So now that I can see that Liechtenstein has a case and I would find for them (were I the Judge) in any case against them, where is the anti-lobby to go? Well, it has to be an attack on the individual sitting at their PC.

If some US congressmen have their way, it will be a crime to do -- in the privacy of your home -- something that you can do readily in public to the applause of the same elected officials. How will the FBI agents who have just kicked my door in tell if I am gambling over the 'Net with New York OTB or The OTB in Sydney Australia?

Recently in RGT, Alan G. Fishel commented in his story of January 17th that "In the last session of Congress, Senators Hatch and Kyl introduced an amendment to a bill that would have made it clear that federal law prohibits the operation of an Internet gambling site that accepts wagers from people physically located in the United States".

If this statement is correct these two Senators must be in need of psychiatric care for a *Napoleon* complex. The world is full of sovereign states, guys. You cannot tell other countries you *prohibit* the operation of Internet sites that accept wagers from people located physically in the USA. Not everybody is Cuba you know. This arrogance will bring new meaning to President Reagan's famous "Evil Empire" quote.

How on earth would you police such a law? What about the trade that already goes on through the mail? Will all mail be opened and read? Will all phone lines be tapped to detect connections to offshore lottery sites? Will you Jail the CEO of America On Line if he allows a bet to go through to the Australian OTB?

What about the reverse; will you ban American Internet sites from taking bets from Liechtenstein citizens? Sooner or later some cash-hungry US state will approve an Internet operation. Gambling is a component of the modern economy of many countries. It is a source of revenue to government, it provides jobs, demand for computers and telecommunications services.

Why then shouldn't there be *trade* in gambling? The fact is there is *trade* in lotteries around the world. The Internet is just a technology that makes it a little more economic from a Individual point of view to *travel* to a place to gamble.

Any laws aimed at On-line gaming may clash with the laws and trade treaties in relation to the International trade in services. If the *transaction* argument is won by Liechtenstein in the courts I wonder how an International Court may see laws preventing the *free trade* in gaming services.

Disclaimer:
Anyone dumb enough to take my namblings as *legal advice* deserves everything they get.

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