BUSINESS

To Seize Or Not To Seize

TAGs: KJB Financial Group, US Justice Department

unclesam-usgovernmentAfter a federal appeals court upheld a contempt order against the businesses of Douglas Rennick, the owner of the KJB Financial Group, the US Government seeks to seize over five hundred million dollars from online gambling accounts. Read more.

Prosecutors allege that Rennick used the bank accounts to transfer money back and forth from online casinos to US customers. The decision by the federal appeals court is troubling to many in the online gambling industry as the move appears more in support of the Unlawful Internet Gambling Enforcement Act.

While momentum has been building among various groups to overturn the UIGEA and implement regulated online gambling in the U.S, this ruling has quelled the enthusiasm to some degree. In light of this ruling, it is very possible that we may be several years away from regulated gambling in the U.S. While no one in the gambling industry wants to hear that kind of talk, there’s another issue that may be more pressing. If the US can obtain millions of dollars in seizures of “illegal” online gambling accounts, what the hell do they need to regulate it for? Certainly regulation of the gaming industry would prove profitable and provide millions of dollars in revenue for the US economy, examples of this already exist in state run online gambling entities, so this point is not debated. The issue is why regulate if they can simply seize the millions of dollars from online gambling accounts.

It’s a interesting option that undoubtedly is being considered by the Justice Department. The Rennick case is not the only one of its kind. The Canadian company, Optimal, which operated the e-wallet Firepay, recently forfeited a whopping amount of cheddar over to the US coffers in the neighborhood of nineteen million smackers. The US government also seized the accounts of California based company, Electracash, and there have been countless others as well still pending. If all these cases and pending cases force entities to forfeit millions of dollars the objective of gaining revenue from the online gambling industry will be achieved without regulation.

The logical question is how will that last? And is seizure really an effective way for the US to retain some of the millions of dollars of revenue leaving its borders daily? These questions will be up to the lawmakers to decide, undoubtedly, the outcome of many of these forfeiture proceedings may play factor.

But in the long run, realistically speaking, won’t gaming entities find ways around it? Certainly there’s more than one way to skin a chicken, or cat depending on where you’re from. So in the meantime, the gaming industry hangs in the balance and the lobbyists rally behind Barney Frank and his push for regulation and legalization, but with several major forfeiture cases pending, gambling enthusiasts probably shouldn’t hold their breath on a decision any time soon…One hurdle at a time.

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