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March-05-2008,
An Online Update Featuring U. S. Attorney Catherine Hanaway of Missouri...By Nelson Lardner

Missouri - The Show Me State -- has demonstrated a recent preference for a strain of socially-conservative politicians - including, but not limited to, ex-Attorney General John Ashcroft, U. S. Senator Kit Bond, and the father/son combo of (outgoing) Governor Matt Blunt and his father, U. S. House GOP Whip Roy Blunt.

Long a bellwether state in general elections, Missouri has certified every winner from Ronald Reagan forward, though we'll also note that former U. S. Senator Jim Talent was defeated by Claire McCaskill in the emphatic electoral reaction which left many GOPers hitting the bricks in November, 2006.

But one factor in the landscape remains, despite the '06 results . . . top-level conservative judges appointed by President George W. Bush remain with us. Why are we doing such diligent backgrounding of the Missouri political scene? Because among the most relevant sitting judges for MajorWager purposes is Ms. Catherine L. Hanaway, United States Attorney for the Eastern District of Missouri, sworn in on July 19, 2005 after being tapped by our current Chief Executive. An aside: Hathaway's Western District tag-team partner, Bradley Schlozman, was railroaded into his position, and has been a significant player in the Texas congressional redistricting brouhaha, AND the Georgia photo-ID voting requirement designed to minimize minority participation. The Bush administration's thrust is evident.

For devotees of online gaming, it's apparent that Hathaway is other than a Santa Claus/Easter Bunny clone, given the Eastern District of Missouri's aggressive handling of such prominent offshore operatives as those involved with BetonSports: founder Gary Kaplan, and the operations CEO, David Carruthers.

Living history: in our big, bad world, in which sustained enforcement is increasingly expensive, modern applications of existing laws remains largely a question of establishing priorities. Exhibit A: the trial and incarceration of WSEX's Jay Cohen, following Mr. Cohen's deliberate testing of the waters by returning to the United States. While the laws regarding these matters remain far from clear, Cohen was convicted and sentenced in 2000, making the point that for those deeply involved in the offshore-based internet-gaming industry, setting foot on U. S. soil invited the possibility that an operative could quickly find himself in jeopardy.

Now, Gary Kaplan did not arrive fully-formed in tandem with the explosive online presence of BetOnSports. Kaplan had a previous history in the "business", and his sustained visibility within the sector in question had long made him a tempting target for U. S. law enforcement officials, thus his eventual apprehension was almost expected, under the climate of the time. Carruthers' takedown further signaled a sustained dedication to the proposition of apprehending as many demonstrably-involved offshore-gaming executives as possible who dared to set foot upon U.S. terra firma.

As Hanaway proclaimed in a DOJ press release on the heels of Carruthers' arrest of 7/17/06, "Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws." A Missouri federal grand jury returned the Carruthers indictment June 1, but it was only unsealed at the time Carruthers was arrested 45 days later, and Kaplan was subsequently taken into custody in the Dominican in late March, 2007. Toss in Pinnacle's lamented withdrawal from the U. S. market on January 11 of last year, followed swiftly by the apprehension of the key NETeller money-transfer players Stephen Lawrence and John Lefebvre, just a few days later, and the "enforcement" pattern is clear.

Is it a surprise that BoDog's Calvin Ayre and others of his stature have taken great pains NOT to grace the United States with their physical presence, especially since the NETeller and BetonSports' offal hit the fan?

We're not looking to fight the last war here, but are compelled to remind of the sustained congressional and public disgust with the low tactics employed by suicide bomber Bill Frist to enact the UIGEA -- and how that disgust will further germinate and spread, should the GOP lose the White House in November. A sustaining Democratic majority in both the House and Senate is virtually assured, given the relative enthusiasm of party adherents and the number of vulnerable GOP senators whose seats will be up for grabs. Given these developments, we would be neither displeased nor surprised to see a change in priorities at DOJ, so that more emphasis might be placed on bringing down criminals who are directly injuring other citizens. Lessened emphasis on government activities designed to place excessive restrictions on individuals' personal choices of action would be most welcome. And if a top-down Democratic administration snaps into place as we head into 2009, would be shocked were this NOT the case.

Now: while no bold announcements have been made, it seems that the prevailing pattern is at least in part a protectionist effort to benefit the domestic Thoroughbred racing and U.S. casino industries.

We continue to maintain that there's scant chance that any of the currently-proposed domestic legislation is going to see passage/enactment in this legislative session in Washington - in fact, we guarantee it. While it may serve as a broad basis for discussion, Rep. Barney Frank's Internet Gambling Regulation Bill remains fatally flawed, largely because it would serve as a sop to the online poker-and-casino-game lobby, while giving the established major professional team sports a knockdown opportunity to deny government-run sports betting to a public which wouldn't mind having access to the product through wholly-legal channels with federally-blessed sports betting no more expensive (-110 on non-runline sports, and no higher than a 15-cent line on baseball) than that offered in Nevada. What's not to like?

. . . Not to mention that we still await the precise verbiage designed to clarify permitted payment processing avenues within the parameters of the UIGEA - without weighing down the banking system to the breaking point with superfluous workday burdens and expenses.

Tuesday's introduction of the Internet Gambling Regulation and Tax Enforcement Act of 2008 by Congressman Jim McDermott (D-Washington) disappoints, further. Designed as a companion piece to the Frank bill, it seeks to delineate the tax-revenue-raising possibilities inherent in Frank's proposal, with the kind of fine print that will likely provoke a significant percentage of potential consumers to race off to the nearest Indian casino. Remain eager for these kind of proposed bills to provoke legitimate, reasoned public discussion, but there's worlds of work to be done, and at the earliest, it's going to be discussed during the latter portion of the 2009 legislative session - again, provided there's a Democrat in the White House.

Seeing the handwriting on the wall, with the points she earned during her stint as the Bush-Cheney state campaign coordinator in 2000 devaluing by the day, Catherine Hanaway is broadly expected to seek the GOP nomination in this year's Missouri Attorney General's race. She's far from a cinch, though, given the tone of the times. Standing Governor Blunt isn't running again, leaving Dem Jay Nixon as the pronounced favorite in that statewide race, and the pulling power of John McCain's coattails in Mizzou remains an open question. An administration friendlier to the casual gambler's mode of thinking could be in the cards, but the climb towards online gambling legislation that treats all parties involved as mature adults will be torturous and difficult.

03-05-08
NelsonLardner
MajorWager.com
lardner@majorwager.com

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