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- Unfavorable Report On Online Gambling Chances In US - A Look At Who's Doing The Reporting
Unfavorable Report On Online Gambling Chances In US - A Look At Who's Doing The Reporting
March 30, 2007 – Earlier this week Online-Casinos.com carried an article regarding the pessimistic outlook on the future of online gambling in America as discussed in a report published by the Stanford Financial Group (a privately held, wholly owned global network of affiliated companies providing private banking, investment banking, trust and brokerage services, investment advisory and real estate development). The report offers the opinion that the legislation soon to be introduced in Congress for a study of online gaming has as a chance of success but they feel it is unlikely that the UIGEA will be successfully repealed. Statements in the report included "In our view the Internet gambling ban [on financial transactions with online gambling entities] benefited from a perfect storm of political forces.
Those who want to repeal the ban will not enjoy those favorable political wins. As a result, we expect the ban to remain and the bank regulations will take effect this year." Another opinion in the report "We do not believe there is the political will to overturn this legislation or to carve out poker from the prohibition." "More likely would be legislation authorizing the National Institute of Science or a similar non-partisan think tank to study whether Internet gambling could be effectively regulated and taxed. We also expect the Federal Reserve to release shortly the rules governing how banks should stem the flow of financing the Internet gambling websites." This opinion is followed by the suggestion that current attempts to overturn the new law will 'open the Democrats to charges of being in bed with Internet gamblers' (in bed with internet gamblers?? Obviously the scum of the earth.) They also believe it would hurt the Democrats by creating a link between them and the 'disgraced Jack Abramoff'.
The Stanford Group puts a lot of faith in Senator Jon Kyl, saying he could muster enough support to overcome any filibuster attempt. They also stated "Given these problems, we see only a 10 percent chance that Congress lifts the gambling ban". But don't despair. They give poker exemption from the provisions of UIGEA a 20 per cent chance of prevailing. However, the Group does feel that the study to be introduced to determine whether online gambling in the US can be regulated has the greatest chance of passing. They suggest it would provide the means for Congressman Barney Frank (and others) who opposed the prohibition to declare a victory without actually overturning the prohibition. They expressed doubt that Kyl and others would expend substantial political capital to block an 18 to 24 month study of whether it's possible to regulate and tax internet gambling.
The report concluded with the observation that the US Federal Reserve will have banking regulations in place that will in all likelihood exempt checks and ACH transactions, predicting that the Federal Reserve Bank has the discretion to make these exemptions and probably will. The banks won limited protection from court injunctions and may argue for further exemptions that expand beyond just ACH transactions and checks.
So who is Stanford Financial Group, anyway? How does what they do make them experts in this field and why were they motivated to publish a report? When in doubt... Google.
Let me preface by saying that the Stanford Financial Group is headed up by Allen Stanford. When discussing the Group or the Man, they are generally one and the same.
The first thing I came across was a press statement on investments by Stanford Financial Group by the Prime Minister of Antigua and Barbuda dated 2/7/03 which carries a few sentences of interest. "It should be recalled that the Stanford Group has invested almost EC $160 million in Antigua over the last few years." and "[Stanford] was ready to invest a further EC$256 million in various projects here immediately." Further digging came up with sale of Caribbean Star discussions involving Caribbean Star Airlines only shareholder, Mr. Allen Stanford and the island governments of Antigua & Barbuda, Barbados and St Vincent & the Grenadines. Also noted was the agreement that Stanford Financial Group will loan $55 million to these same governments. Mr. Stanford has invested considerable millions, particularly in the island of Antigua, yet no mention was made or consideration given (from what has been released of the report) of Antigua's actions against the US in the WTO regarding online gambling.
Next came the hotly debated topic a few years ago of big name corporations providing corporate jets for politicians to travel the country for election, re-election, PAC, Senate, Congress and other various purposes. Michael Oxley was a US representative from Ohio and chairman of the House Financial Services Committee. "Among the corporations that provided Oxley with private jets were Houston-based Stanford Financial, which engages in offshore banking." And some of the responsibilities of the House Financial Services Committee are oversight of offshore banks. Coincidence? As a side note to this, the top 10 users of private jets were all Republicans except one. Senator Harry Reid (D-NV) was the 3rd most frequent user of corporate jets for travel, frequently using one of Stanford Financial's five jets.
Stanford also donated $2.5 million to restore the home of Stanford University’s founder, whom he claims as a relative. If there is a blood connection, though, the California university doesn't know it. ``We are familiar with Stanford Financial but are not aware of any genealogical relationship between Allen Stanford and Leland Stanford,'' says Susan Weinstein, director of business development and guardian of the use of the university's name." This claim of familial association to the prestigious Stanford University is just one of the ways Stanford Financial Group has used to try to improve on its image among investors and in Washington. This particular article in Bloomberg sheds a little light on the topic of Stanford Financial. Information like why the Stanford Financial Group would need to polish their image. Stanford's grandfather's insurance company, founded in Texas in the 30's was the start of the financial empire but now Allen Stanford's main business is offshore banking. He started in 1985 in Montserrat and later moved to Antigua in 1990. I guess this is where the expert analysis of the online gambling business reflects credibility, right? Maybe not. It is however where Stanford ran into problems with US investigators. In 1999, Stanford Financial tried to take over Antiguan International Business Corp, which regulated offshore companies on the island. The article lists power grabs, attempted revision of Antigua's offshore banking rules and US warnings to financial institutions to be suspicious of Antiguan transactions, to name a few.
Other interesting information included was the fact that "in the past six years (this article is dated May 17, 2006), Stanford Financial and its employees have made more than $2 million in donations to U.S. political candidates and parties, according to the Federal Election Commission, Congressional records and Internal Revenue Service records." Stanford makes generous donations to both Democrats and Republicans. Some of the top beneficiaries have been former Senator Robert Torricelli, a New Jersey Democrat who left office in 2003 amid ethics allegations, and Republican Representatives Tom DeLay of Texas, who resigned after having been indicted in a Texas election-fundraising case, and Bob Ney of Ohio, who was under investigation in the scandal involving Jack Abramoff. Stanford Financial or its employees also contributed to the legal defense funds of the three lawmakers. I guess this does give them some sort of authority to make the statement in the opening paragraphs regarding the 'disgraced Jack Abramoff'.
In an article dated 10/27/05 and titled Behind the Stanford Plan this information was offered "[Stanford's] investments in Antigua have been extensive - his political contributions alone triggering repeated controversies and accusations of bribery. In November 2003 he held a press conference to respond to a charge by the then leader of the opposition (later prime minister) Baldwin Spencer that he had bribed 2 ministers with $100,000 each.
I decided to stop looking after this last piece of information turned up on page 25 of the Public Citizen's Report titled Stanford Financial Group Uses 527s As It Fights Money-Laundering Legislation.
So who is the Stanford Financial Group? It's here for you to read and discover. How does what they do make them experts in the online gambling world? The connections I see are neither singular nor favorable and could possibly tie into the third question of why they were motivated to publish a report to begin with, but I believe more information is needed before making conclusive statements. You can make and discard any conclusions as you see fit. I do have several questions though. I haven't seen a copy of this report nor have I been able to access a copy on the internet. Who received copies, who commissioned this report and where can a complete copy of the report be found? Online-Casinos.com reported on and quoted from it directly as did Gambling911. Just makes me wonder how they knew about this report and how they got a copy.