At the end of a court case dating back two years, PartyGaming co-founder Anurag Dikshit received a light sentence on Thursday, though some wonder if he should have been convicted at all. The court case involved PartyGaming accepting customers from the United States, something that the U.S. federal government claims is illegal, though they can point to no specific statute to back up that claim.

Two years ago, Mr. Dikshit agreed to plea guilty for facilitating an “illegal” online gambling operation and agreed to cooperate with prosecutors. However, since that time, his cooperation has not led to any other indictments or even arrests. That has led some, including the judge in the case, to question the real motives of the plea bargain. Was it really to help take down others engaging in “illegal” activity, or was it so the federal government could have a win versus online gambling? Certainly it helps their anti-gambling case to have the precedent of convicting the founder of an online gambling company.

On Thursday, Dikshit was sentenced to one year of probation. Though some say he got off light by not having to serve any jail time, it’s not clear that he ever broke any laws. He did not violate the UIGEA and it would be hard to make a case that he violated the Interstate Wire Act. It’s worth noting that while the Supreme Court has not ruled on whether the Wire Act applies to online gambling, the U.S. Fifth Circuit Court of Appeals ruled that it only applies to sports betting and not other forms of online gambling.

During the sentencing hearing, Dikshit admitted that he “possibly” could have been violating U.S. law by accepting American customers. The judge seemed no more convinced than Dikshit, asking the prosecutors who no one else has been indicted as a result of Dikshit’s cooperation. “It has been two years since this defendant began cooperating; what’s going on?” asked Judge Jed Rakoff. Prosecutors said that the investigation is ongoing.

Due to the conviction, even if the U.S. eventually does open up an online gambling market in the country, it’s doubtful that he or any company with which he is involved will be able to receive a gambling license.

There are now two different online poker bills in the California Senate, as the state almost seems to be racing against New Jersey to become the first in the U.S. to regulate the activity. The new bill was introduced by Senator Rod Wright, who introduced a different version of the bill in 2009.

Back then, Senator Wright introduced SB 1485, which was intended to regulate online poker within the state of California. After facing some difficulty, Wright canceled the scheduled hearing on the bill in June of this year. Since then, Wright has revised the bill and has now introduced a modified version to the current state Senate, with this bill called the Internet Gambling Consumer Protection and Public-Private Partnership Act of 2011 (SB 45).

The new version of the bill would allow the California Gambling Control Commission to grant licenses to three different operators within the state. Those licensed operators could then provide online poker services to residents of California. The licenses could last up to 20 years.

The first online poker bill in the state Senate, which is still on the table, was introduced by Senator Lou Correa on December 6. That bill, SB 40, would allow the California Gambling Control Commission to grant online poker licenses to the California Online Poker Association (COPA). Any California tribes that offer gambling are eligible to join COPA and the bill would not give COPA an exclusive right to offer online poker, protecting potential future competition from facing a state monopoly.

The Morongo Band of Mission Indians and the San Manuel Band of Mission Indians support Correa’s online poker bill and oppose Harry Reid’s online poker legislation in the U.S. Senate, feeling that his bill would hurt California’s industry.

As a jab to Congress, the language of SB 40 says that the UIGEA “has not eliminated illegal, unregulated Internet gambling, nor has it provided any increased protection for participants from game operators and others who would impair the integrity of online gambling activity.” In short, the bill says that the federal government failed to prevent illegal gambling or protect gamblers from dangerous websites, so California has to do it on their own.

Right now there is a lot of buzz in the online gambling industry over the possibility of U.S. Senate Majority Leader Harry Reid attaching an online poker bill to must-pass legislation during the lame duck session. There are a lot of good and bad things being said about the bill, which few people have seen.

The bill would essentially render UIGEA useless even if it doesn’t totally repeal it. That would be good news for online gamblers in the U.S. who are having trouble finding casinos that will accept them. No one has reported yet on the licensing fees or the tax rate, but there are a couple reported regulations that have some in the business angry.

One reported regulation would only allow casinos that have existed at least 5 years in the United States to offer online gambling. That would benefit the old casino industries in places like Las Vegas (where Reid represents) and Atlantic City while discriminating against states with new casino industries. The bill also supposedly would not allow tribal casinos to provide online gambling sites.

Another regulation that is drawing the ire of poker players is a rule that would make them wait 15 months without playing poker online. It will take 15 months from the time the law is passed for the regulation to be put in place. That type of regulatory delay is common and it is the reason laws take so long to go into effect. However, Reid’s bill purportedly states that online casinos cannot receive a license if they have accepted U.S. players within 30 days of the bill being passed. That means a period of 15 months (or more) in which any online gambling website that wants to be licensed in the U.S. will not allow any American customers.

When the bill becomes law, if it does, more will be known, but right now it looks like there are some aspects of it that are not good for casinos or American online gamblers.

There is troubling news coming out of Washington, D.C. right now. Though the plan has not been confirmed, there is a rumor that the U.S. Treasury Department plans to implement new rules that would give them unprecedented access to the monitoring of financial transactions. Such rules could make it much more difficult, or even impossible, for Americans to gamble online.

Under current federal law, all banks are required to report international money transfers of $10,000 or higher to the Treasury Department. That is done to combat money laundering, the financing of terrorism and more. However, the current plan is rumored to be a rule requiring banks to report all international money transfers, regardless of the amount. That could have a serious impact on U.S. members of overseas online casinos.

Currently there is no federal law in the United States banning online gambling. However, the passage of UIGEA in 2006 allows the federal government to go after banks and other financial institutions that transfer funds from unlawful Internet gambling, though which forms are unlawful was never defined. As a result, most U.S. credit cards will no longer process transactions involving online gambling websites.

Because of that, most U.S. online gamblers have to use third-parties, such as e-wallets, to transfer funds to the casinos. Under the proposed new rules, though, all of those transactions would have to be reported to the federal government. Though the U.S. player isn’t doing anything illegal, there is a lot of confusion on Capitol Hill and in the courtrooms about the legal status of online gambling. Players may be at risk of being found guilty of a crime, even though no such crime exists.

More bad news is that such a change would not have to be passed as a new law or an amendment to current law. Congress would not have to vote on this change. The Treasury Department has been given the authority to simply make regulations like this, without the approval of the People.

The owner of two payment processing companies linked to online gambling websites is now out more than $13 million. Ahmad Khawaja agreed to forfeit $13.3 million that had been seized by the FBI in June of 2009 in order for his case to be settled.

Khawaja owns Allied Wallet and Allied Systems, two online payment processors that the U.S. federal government claimed were used to launder money. Specifically, the payment processors were accused of using overseas banks, mostly those in Cyprus, to funnel money back and forth between online gambling websites, such as Poker Stars, and the players.

Whether there is anything wrong with processing payments for online gambling is a gray area in the United States. UIGEA was passed in 2006, but it never defines what constitutes unlawful online gambling and no federal ban exists. Still, in the name of UIGEA, Khawaja was targeted and prosecuted for processing those payments and laundering money.

After settling the case with the authorities, Allied Wallet and Allied Systems are still accepting payments, though it is not known whether they will still be associated with online gambling sites such as Poker Stars.

Harrah’s Entertainment is really counting on the U.S. legalizing and regulating online gambling. In fact, they have a lot of money riding on that. A while back, the Las Vegas casino made headlines by partnering with 888.com to open their own online casino. Now they are upping the ante by putting advertising behind that investment.

Harrah’s Entertainment has had their online casino, which uses their “Caesars” name, for a while, but it does not currently accept American customers. They have been advertising online and in foreign markets while the casino has been open. Recently, though, the casino has started advertising in the United States.

A recent edition of USA Today, the popular nationwide newspaper, featured advertising for Harrah’s online casino. They are also advertising on television in the United States, most notably on ESPN during the World Series of Poker.

What does this all mean? Well, Harrah’s seems to be pretty confident that Congress will pass gambling legislation that repeals UIGEA this year, though the more time passes the more unlikely that seems. It’s a gamble. If the legislation currently in the House doesn’t pass and we have to wait until next year or later to get something done, then Harrah’s will have wasted a lot of money advertising to people who can’t buy their product. If, however, online gambling is legalized in the U.S. soon, Harrah’s would be in a unique situation to cash in. Harrah’s would already have a recognized brand and have a leg up on the competition.

Only time will tell whether the gamble pays off for Harrah’s. Here’s hoping it does.

Atlantic City casinos are talking to online gambling software companies, it has been reported. According to the Atlantic City Weekly, land-based casinos in New Jersey have been having talks with undisclosed companies that design software for online casinos.

It’s easy to guess the topic of conversation. The Atlantic City casinos think that UIGEA may be repealed and online gambling may be legalized and regulated in the United States. If that happens, the casinos want to join the online gambling market and preferably a deal in place with the software designers so they can immediately start offering online casinos.

Mark Juliano, President of the New Jersey Casino Association, recently testified that the casinos are “working with software programs to provide a mode for online poker rooms and casino games and we’re obviously watching the legislation on this very carefully.”

The legislation he referred to is the Internet Gambling Regulation, Consumer Protection and Enforcement Act, a bill in the U.S. House of Representatives that would repeal UIGEA and legalize and regulate online gambling. Though the bill easily passed the Financial Services Committee, for a variety of reasons many think that the bill becoming law this year would be a long-shot. However, businesses can’t afford to wait and see what happens. Plans need to be in place in the event that the bill is passed and that seems to be exactly what the Atlantic City casinos are doing.

Of the obstacles facing the passage of online gambling legislation in the United States, the largest are a quickly approaching deadline and amendments tacked onto the bill.

The issue over possibly legalizing and regulating online casinos in the United States is a complex and tricky one. People try to simply it by using stereotypes, claiming that Democrats are for it but Republicans against it for moral reasons. They say that land-based casinos are against it. Others say that the online casinos and gambling proponents don’t care about problem gambling or other issues that it could cause. None of those people are right.

The truth is that there is support and opposition on both ends of the political spectrum. Most casinos and online gambling supporters are concerned with gambling addiction and do everything they can to minimize the problem. There is surely a lot of opposition from the land-based casinos, most vocally from Steve Wynn, who owns the Mirage, Bellagio, Wynn and more. However, some of his competitors feel differently.

In an article last weekend with the New York Post, entrepreneur Donald Trump spoke out in favor of the federal government legalizing and regulating online casinos. Trump, a known conservative, is one of the best-known businessmen in America. Along with his popular reality TV show, his hair, and his tower, Trump is probably best known for owning the three largest casinos in Atlantic City. Many land-based casino owners see online gambling as a threat, as competition that would hurt them. The Donald sees things differently, though.

“Why lose all those billions of revenue?” he asked, echoing the point made by many that tax revenue from online casinos would help a struggling economy in the throes of a deep recession. Trump knows a thing or two about tax revenue. According to the Post, his three Atlantic City casinos combine to be the largest taxpayer in the city.

Expounding on his pro-online gambling stance, Trump said that “online gambling is going to happen; why not have it work to the public advantage.” As a possible harbinger of things to come, the House Financial Services Committee recently voted to pass the Internet Gambling Regulation, Consumer Protection and Enforcement Act, a bill that would repeal UIGEA and legalize and regulate online gambling in America.

Last week was a big week in the online gambling community. The biggest news – at least in the Western world – was that in the United States, the Internet Gambling Regulation, Consumer Protection and Enforcement Act passed the House Financial Services Committee, clearing the way for a full House vote.

There was another big piece of news in online gambling, though. PartyGaming and bwin accounced that they would merge. Since they are publicly traded companies, the merger has to be approved by shareholders, but if it goes through, that will make the resulting company the largest in the online gambling industry.

PartyGaming is an online casino and poker room based in the UK and bwin is an online bookmaker based in Austria. If the two merge, as has been in the works for approximately 6 months, they would offer virtually every imaginable type of game or activity for online betting. They would also have the largest revenue and most customers in the online gambling industry.

Many in the industry believe that more mergers are likely to come soon. Many also believe that the timing of this announcement, coming on the heels of the House Financial Services Committee vote, is no coincidence.

PartyGaming used to be the largest online poker room in the industry, but with approximately 70% of their customers coming from the United States, the passage of UIGEA in 2006, which amounted to a de facto ban on online gambling, they dropped to fourth-largest. One of the rules in the new American online gambling legislation is that online casinos who have violated existing U.S. laws will not be able to obtain licenses to operate in the States. For that reason, PartyGaming and other casinos need to continue to be careful when it comes to American customers, at least until the legislation is passed into law.

The United States Congress likes to get together for hearings. They like discussing things, lecturing, sharing their opinion and watching themselves on C-SPAN. Right now, the House Financial Services Committee is holding a hearing on online gambling. Representative Barney Frank, a member of that committee, wants to legalize and regulate online gambling at a federal level, repealing the Unlawful Internet Gambling Enforcement Act (UIGEA) in the process.

Yesterday, Annie Duke testified before the House committee. Annie Duke is a well-known poker player, having won a World Series of Poker bracelet and earning the nickname of the “Duchess of Poker.” For that reason, it’s not surprising that she is an advocate of online poker in the United States.

Annie Duke told the House Financial Services Committee that Congress should legalize and regulate the online gambling industry. She said that the issue is “personal freedom, the right of individual Americans to do what they want in the privacy of their homes without the intrusion of the government.”

That argument about doing what you want in your own home should carry particular weight with Frank. According to the folks at Gambling Review, Frank has a history of running an illegal gay brothel out of his home. Frank echoed Duke’s statement, saying that “unwise choices are part of freedom.” While some worry that allowing online gambling would lead to illegal gambling by minors, Duke said that it should be the job of parents, not the government, to make sure their children are not participating in dangerous activities.

Next week, the House Financial Services Committee may meet to vote on Frank’s bill to regulate and license online gambling in America. Currently there is no federal ban on online gambling in the United States. The UIGEA tasks financial institutions with blocking transactions from “unlawful” internet gambling, without making online gambling unlawful or defining what types of gambling is unlawful. Some states do ban online gambling, though, and those state laws should still be in effect even if federal regulation is passed.