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Thursday, August 27, 2015

Flashback: UIGEA Online Poker Ban

As a followup to yesterday's post exposing the hypocrisy of online poker opponent Sheldon Adelson, here's a column I wrote on October 13, 2006, after Congress snuck the Unlawful Internet Gambling Enforcement Act into a completely unrelated homeland security bill...

Today, President Bush signed the ports safety legislation, which also includes a ban on internet gambling. What one has to do with the other, or why an online poker game might be a threat to national security, I have no idea.

The problem with the online gambling ban is hypocrisy of our politicians criminalizing betting in one form, while promoting it in so many others. Every state in the country has a lottery, and several take part in multi-state lotteries like Powerball and MegaMillions, which means the gambling crosses state lines. No one is suggesting we shut those down. Nor would they ever tell churches to knock off their bingo nights, and we know about the growth of all those brick-and-mortar casinos across the country.

Obviously, our nation has embraced gambling -- or rather, allowing adults to gamble if they like. Even now, in the midst of the baseball playoffs, we have mayors like Slay and Bloomberg making very public wagers on the Cards vs. Mets, with the payoff coming in toasted ravioli, pizza, and lemon ices. They not only made the bet, but they publicized it to the press and on their websites. But if you wanted to make a bet on that series, the only place you could do it legally is Las Vegas. God forbid you place that wager with an online sports book. What's the difference? Why is it okay for politicians to make these bets out in the open, but not the rest of us?

Opponents of online gambling always throw up the classic red herring, "we have to protect the kids." This kind of protection is not the government's job, it's the job of parents -- just as I have to make sure my daughter is not giving out a lot of personal information on, and you have to ensure that your son isn't running up your cellphone bill by sending 10,000 text messages to his friends.

If my daughter were to somehow use my credit card or bank information to start playing poker or betting on sports online, she'd feel plenty of consequences right here in our own house -- there would be no need for an FBI agent to get involved. If she's old enough to have money of her own and ends up losing it, well, that's one of life's lessons, which she could just as easily learn in a real-world casino.

Don't tell me it's about gambling addiction, either. No law prevents a gambler from going to a local casino and losing several hundred dollars every single day. And there's no restriction on the number of lottery tickets they can buy, either -- even though the odds of winning are worse than being hit by lightning. What message does that send, that the worse you are at math, the less you should be restricted?

The new legislation won't stop online gambling. It will make it a little more difficult to transfer money in and out of those accounts for awhile, but eventually, the offshore sites will figure out a way to bring their customers back, because there's just too much money at stake.

All that money is another part of the argument, because the government isn't getting its share of taxes from the revenue. But legalizing it would kill two birds with one stone. One, they could monitor and regulate the gaming, taxing the revenue of both the online operators and the players. Two, the large corporations that run the biggest brick-and-mortar casinos would be encouraged to enter the business, and customers would be much more likely to do business with brand names they know and trust, like Harrah's and MGM Mirage and Wynn. Those publicly-traded companies would make sure that things are on the up and up, because any cheating or other scandal would endanger the billions of dollars they could be raking in. Thus, it would be safer for the gambling consumer. Making it illegal may have the opposite effect, driving the business underground even more and allowing it to be run by the shadiest and least-secure organization -- akin to what happened with alcohol sales during Prohibition.

It will be interesting to see if this legislation has an effect on the World Series Of Poker next year. Nearly three-quarters of the 8,773 entrants in this year's Main Event got there by winning satellite tournaments in online poker rooms. If the legislation is successful, those numbers will drop off dramatically.

Ironically, poker has been played by people at every level, including even the most conservative politicians -- Richard Nixon used the money he won in the Navy to finance his first run for Congress. George W. Bush played lots of poker at Harvard Business School. The late William Rehnquist used to host a weekly poker game, even when he was Chief Justice of the Supreme Court.

One of the parties that was pushing Congress for this law is the NFL, which supposedly detests the notion that anyone might bet on football. I can understand their concern, worried about how gambling might influence how games are played. Yet every newspaper in America prints the point spreads every day, every office building in the country has some sort of fantasy football league, and the league forces its teams into full and timely disclosure of any injuries or other roster changes. Who is that for, if not for the sports bettors? The NFL is an enabler, and another gambling hypocrite.

The most offensive part of this online gambling legislation is the presumption that the government has the right to tell us how to spend our hard-earned money. It most certainly does not. They don't place a restriction on the number of shoes my wife can buy, nor the number of songs I can download from iTunes, and they can't shut down some eBay addict who is bidding on some ridiculous tchotchke at three in the morning. If they tried that, they'd start a revolution. So why is it their business if some poker player (whether it's a med-school student, an auto mechanic, a Fortune 500 CEO, or your favorite radio personality) is playing no-limit hold'em for a few hours in an online poker room?