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Comment by 6thSigma | Hacker News Reader

Is this legal in America?

Edit: Why the downvotes? I'm curious if they got an opinion from a lawyer on the legality of their site.

The business is more than likely violating gambling regulations by soliciting US customers. IANAL, but Satoshi Dice did block US players due to legal concerns https://bitcointalk.org/index.php?topic=135521.0.

I was more so curious if a lawyer might try to categorize this site under currency trading or some other type of derivatives trading rather than straight gambling.

(IANAL)

Can you explain how they blocked US players? I skimmed that page and only saw "not possible since you play via sending to a bitcoin address; there's no IP to block".

Presumably they blocked US players who don't know how to use a proxy?

Can you explain further? Playing is literally done only by sending to a Bitcoin address. You win or lose and get paid back or not. There's no website involved in the actual game.

By "proxy" I didn't necessarily mean "web proxy". If at any point an IP address is visible it is feasible to exclude transactions that involve US IP addresses. This is, of course, trivial to circumvent - which was my point.

Bitcoin is a decentralized system, so there is no reasonable place to put these IP restrictions.

If there is a single Bitcoin mining node (out of thousands[0]) that will accept your transaction, you can play.

[0] http://blockchain.info/connected-nodes

You're not speaking to the important question, which is whether there is any way for the recipient to tell the originating IP of a bitcoin transaction. I am gathering the answer is "no". If "yes", then there is an obvious place to put the IP restrictions: in the satoshi dice service itself. Obviously, even in this case, it could be defeated with a proxy.

The point is that the recipient of the money doesn't interact at all to receive it; the rest of the network just "decides" (based on the transaction) that such address now has X more coins. The machine with the address/wallet is not consulted.

That is not the point. The information could be available, and the recipient could therefore act on it. If the information is not available then that is the point - but that could in principle be the case even if there was interaction.

But it's not like the recipient could invalidate the transaction even if it had that information.

No, but it could either return it or pocket it, rather than letting them play.

> You're not speaking to the important question, which is whether there is any way for the recipient to tell the originating IP of a bitcoin transaction. I am gathering the answer is "no".

Correct. There is absolutely no way whatsoever to determine the originating IP address of a bitcoin transaction, short of global network surveillance.

I believe all they did was block US users from seeing the website - there is no way to block users from transacting with Satoshidice.

Sorry for the confusion. They blocked US players from their website where they could get information on what was currently being bet on and where to send their Bitcoin.

IIRC Satoshi Dice worked by sending Bitcoin to a specific address for a bet and the address changed each time which they displayed on their website. By blocking US players from the website they could legally claim to be in compliance with the regulation (IANAL).

Hmm the site seems to load the same for me US IP or not. You do have to click "I agree" that you're legal, though.

Well some months ago it was a separate landing page, but I guess they changed it. They still don't display the information unless you agree that you are in a legal jurisdiction to use the service.

IANAL, but my guess is it's in the same gray area that betting on sports with your local bookie or playing online poker is. More specifically, the site itself is probably illegal in the eyes of most agencies but the players participating probably aren't acting illegally.

That said, given the fact that there were a total of 14 bettors in the first two rounds, this sounds like the smallest of small fry when it comes to the world of online gambling.

I wasn't aware there was any grey-area for domestic bookies... just because it's not sports doesn't mean it's not bookmaking.

Online poker is grey-area because the poker outfit itself is generally outside the scope of US law. If it were more legal, you can be sure their servers would be hosted domestically in the US where it's cheaper and faster.

Your local bookie, however, is in the same scope as a guy running a local card room -he's taking a cut off of people's gambling habit. Whether it's sports or not, it's still going to be bookmaking, and still trouble. Extra trouble if it's over state lines.

The grey area with online poker is because it isn't explicitly made illegal in the wire act (online sports betting is explicitly illegal), but the UIGEA legislates against games of chance which there are arguments that poker is not such a game but it hasn't been tried in court. Many sites used that argument to offer online poker to US residents and had their domains and bank accounts seized, Pokerstars settled for over 700mm and bought Full Tilt Poker in the process. The US govt doesnt care where you are based if you are violating US law and attracting US customers.

> Is this legal in America?

Not in the US and probably any other county unless he has a license.

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