The investigation into the activities of the two companies included a sting operation in which the Department of Homeland Security set up a fake payment processing company called Linwood Payment Solutions. The company processed payments throughout 2009 both to and from the online poker sites. According to the affidavit, Linwood processed over $33 million in payments over the course of more than 300,000 transactions.
“It is illegal for internet gambling enterprises to do business in Maryland, regardless of where the website operator is located,” said U.S. Attorney Rod J. Rosenstein. “We cannot allow foreign website operators to flout the law simply because their headquarters are based outside the country.”
This confuses me. My understanding of the law here was merely that it was illegal to process payments for such sites. Yet, if the government sets up its own payment processor, then isn't it the government that was breaking the law here? Contrary to what Rosenstein states, my understanding was that the law does not actually outlaw gambling sites, just the payment processing for such sites. Perhaps those more familiar with the law can clarify this...?
Separately, that final line from Rosenstein should scare pretty much any foreign company. It appears to be the US asserting jurisdiction over any website in any country. If the Justice Department or Homeland Security doesn't like it, it's gone. Doesn't that seem like an international incident waiting to happen? For years, we've tried to explain to other countries that they can't sue US companies for things online, and yet here we are, claiming jurisdiction over the whole internet.
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