2012 Year in Review

I haven’t been updating this blog much recently. But in the tradition of year-end roundups, I’ve decided to collect a few personal favorites from the things I’ve written over the last year.

This last piece was a personal favorite, and I hope to build on these ideas in the coming year. I hope to get a few long form things written this next year too and to finish another law review piece, this time on federalism.

Thanks to everyone who read and responded.

Anthropocentrism

I read today almost two pages
In a book by a mystic poet
And laughed like one who has cried a lot.

Mystic poets are sick philosophers,
And philosophers are madmen.

Because mystic poets say that flowers feel
And say that stones have a soul
And that rivers have ecstasies in moonlight.

But flowers, if they felt at all, wouldn’t be flowers,
They’d be people;
And if stones had souls, they’d be living things, not stones;
And if rivers had ecstasies in moonlight,
They’d be sick men.

It would take not to know what flowers and stones and rivers are
To talk about their feelings.
To talk about the soul of flowers, stones, and rivers
Is to talk about oneself and one’s own false thoughts.

Thank god that stones are only stones,
And that rivers are nothing but rivers
And that flowers are just flowers.

As for myself, I write the prose of my verses
And I am satisfied.
Because I know that I understand Nature from the outside;
And I don’t understand it from the inside
Because Nature has no inside;
Otherwise it wouldn’t be Nature.

- Alberto Caeiro (Fernando Pessoa)
Poem XXVII from The Keeper of Sheep, translated by Patricia Ferrari

Forget About Your House of Cards

This entry was originally written for the HLPR Blog: Notice and Comment.

On Friday of last week, the Department of Justice issued an indictment charging the founders of Full Tilt Poker, PokerStars, and Absolute/UB Poker, as well 8 other individuals in the online poker industry, with bank fraud, money laundering, and illegal gambling offenses. The government also announced $2 billion in civil money laundering charges and in rem forfeiture actions against the defendants and their assets and issued injunctions that would seize 5 online domain names and 76 bank accounts. The DOJ’s press release is here (pdf).

The online poker community is still reeling from the government’s move. The domains for UB.comPoker Stars, and Absolute Poker have already been seized and now display a notice from the DOJ.  Many players found that they could not get access to money they had in their online accounts.  Less than a day after the indictment, Full Tilt and Poker Stars issued announcements that customer account balances were safe and that they would continue processing customer withdrawals. But not everyone has been able to recover their money. Online poker has become a major, if not the primary, income stream for thousands of Americans in recent years, and the indictments have a number of people worrying about where their next paycheck will come from.

The indictment filed by Preet Bharara, U.S. Attorney for New York’s Southern District, contains nine counts. Of the charges, four are alleged violations of the Unlawful Internet Gambling Enforcement Act of 2006 (or UIGEA) (31 U.S.C. §§ 53615367), and three are in connection with a federal prohibition on “illegal gambling business” (18 U.S.C. § 1955). The eighth count is for conspiracy to commit bank and wire fraud (18 U.S.C.§ 1343), and the ninth is for money laundering conspiracy (18 U.S.C.§ 1956).  A breakdown of which defendants were charged with which of these violations can be found here.

The theory behind the UIGEA and “illegal gambling business” charges is that poker is gambling.  The merits of these charges could hinge on whether courts determine that poker is a game of skill or chance. Freakonomics had a series of posts on the question, and Harvard’s own Charles Nesson discussed the issue a few years back with the Wall Street Journal (pdf).  At the moment, courts around the country remain split on the issue, but most people who’ve spent any time playing recognize the skill-component involved. Poker is arguably more a game of skill than much of what goes on in our financial sector, which is perhaps why Congress saw the need to create a statutory exemption for all SEC-regulated activities in the UIGEA.

The other claims are more straightforward allegations of fraud.  According to the indictment, “defendants…arranged for the money received from U.S. gamblers to be disguised as payments to hundreds of non-existent online merchants purporting to sell merchandise such as jewelry and golf balls.” The DOJ further has alleged that the online poker companies incentivized banks to cooperate in these payments by paying bribes. These disputes will probably turn on the particulars of the payment arrangements involved and the degree of transparency and honesty that existed between parties.

There is a longstanding movement for the legalization of poker that’s probably about to pick up some steam. A lot of the criticisms speculate that Congress only acted against online poker because of pressure from physical casinos (consider Reid’s proposal to move online poker into the hands of U.S. casinos during the Dec. 2010 tax debate). It may be possible to identify some public interest that is being served through making online poker illegal, but that doesn’t seem to be what’s going on.

 

Patterns

Natalie Portman in Black Swan

“What a sorry, almost absurd thing it is, how annoyingly it chafes the mind, to observe and register quite by accident how someone believes herself to be thinking and acting cunningly on her own, without her noticing that it is merely a shameful repetition of a general pattern.”

 - Thomas Mann, Joseph and his Brothers

Ramón y Cajal

Santiago Ramón y Cajal (1852-1934)

This image, by Santiago Ramón y Cajal (1852-1934), was drawn from a histological stain of a human retinal cell and is among the first drawings of a neuron. Ramón y Cajal was the Spanish physician and early neuroscientist who first discovered that the nervous system was not continuous but was comprised of interconnected individual cells.