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July 11, 2006
The Hypocrisy of “Banning” Internet Gambling
We can start with the reason I offset the word banning in quotes. Because the Unlawful Internet Gambling Enforcement Act of 2006 (HR 4411) being debated in the House today would ban only the types of online gambling Congress finds objectionable. Poker and blackjack are banned. Internet betting on horse racing and lotteries are not for the simple reason that states have a cut of the ponies and the numbers.
Let’s not pretend for a minute this is about morality or protecting compulsive gamblers. It’s all about protecting state lotteries and billions in tax revenues from U.S. casinos. Meanwhile, off-shore online gambling companies, which include Sportingbet PLC, a corporation publicly-traded on the London Stock Exchange, saw $4 billion of $12 billion in 2005 total revenues come from U.S. players, according to the American Gaming Association. Although these companies have stated that they would welcome legitimate status in the U.S., and agree to regulation and taxation, Congress remains hostile to them.
Even conservative groups who oppose gambling on principle are unhappy with the bill’s selective definitions. “If you're going to support legislation that is supposed to ‘prohibit gambling,’ you should not have carve-outs,”' Andrea Lafferty, executive director of the conservative Traditional Values Coalition, told the Associated Press.
HR 4411 would extend and clarify a current laws prohibit U.S. credit card companies from processing transactions from gaming sites to include other types of electronic funds transfers. It’s debatable as to how effective this will be, especially because the law will only cover U.S.-based banks and third-party transfers have long been a legitimate method of doing business. The most disturbing aspect of the bill also would give the government the authority to order Internet service providers to block gambling web sites, making it the first instance of a bill that would impose Internet censorship on services that are otherwise legal and widely available.
For all of Congress’ bluster about protecting the public from the exploitation of gambling, games offered online, particularly poker and blackjack, offer a far better value proposition for players on a budget. Poker, the most popular online wagering game, offers a positive expectation to even moderately skilled players. Success in low-limit poker is not a matter of psychology or luck. It comes down to basic applied math and understanding a style called “tight-aggressive” play--skills that can be learned. In contrast, most land-based casinos that this bill protects offer low-limit players slots that pay back an abysmal 85 to 90 cents on the dollar and carnival games like 6-to-5 blackjack, an egregious rip-off.
The chief sponsor of HR 4411 is Jim Leach of Iowa, a state that permits riverboat casinos. Of the 40 members on the House Financial Services Committee 25 are from states where casino gambling is legal, or from Florida, which has a strong casino cruise industry,(not to mention jai-alai and dog tracks).
The bill’s co-sponsor, Republican Jim Goodlatte, is from Virginia, but 21 of his 40 colleagues on the House Judiciary Committee, which also marked up the bill, represent states with casino interests. They include its chairman, Jim Sensenbrenner (R, Wisc.) and ranking member, John Conyers (D., Mich.).
A speaking of Sensenbrenner, as sponsor one of the network neutrality bills, just two weeks ago wasn’t he fretting about the need to keep the Internet open and free?
All we can do is shake our heads and chalk this up to more typical election-year posturing, not to mention backwash from the Jack Abramoff scandal. Ironically, Abramoff, whose clients were tribal casino interests, would likely have put his once-substantial resources behind this bill.
Whatever the vote, we will wake up tomorrow to find the same on-line gambling pitches in our email. Online gambling in America is too popular, and too big a business to simply go away. The same, unfortunately, can be said for election-year posturings in Congress. We can only hope that come next week, they will have moved on to another issue.
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