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Businesses Government The Internet United States Politics

A Push To End the Online Gambling Ban 205

Posted by kdawson from the let-disintermediation-have-its-way dept.
Hugh Pickens writes "Representative Barney Frank of Massachusetts has introduced legislation that would roll back a ban on Internet gambling enacted when Republicans led Congress. The legislation would allow the Treasury Department to license and regulate online gambling companies that serve American customers. Frank's bill has roughly two dozen co-sponsors and the backing of the The Poker Players Alliance, with over a million members. But opponents are mobilizing to defeat the bill including social conservatives and professional and amateur sports organizations, which say more gambling opportunities could threaten the integrity of their competition. 'Illegal offshore Internet gambling sites are a criminal enterprise, and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age,' says Representative Spencer Bachus, Republican of Alabama and the ranking member on the House Financial Services Committee. Another powerful roadblock could be the Senate majority leader, Harry Reid, Democrat of Nevada. 'Gaming is an important industry to the state, and anything that affects it will be reviewed carefully,' says Reid's spokesman."
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A Push To End the Online Gambling Ban More

A Push To End the Online Gambling Ban

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  • Wanna Bet? (Score:5, Funny)

    by shma ( 863063 ) on Tuesday May 26, 2009 @05:12PM (#28101665)
    50 bucks says the bill fails.
    • In fact there are websites in Britain where you can do just that, put out custom bets (i.e. Bin Laden, captured or killed by MM/DD/YYYY) and get other users to take you up on them. You can bet on just about anything were the outcome can be determined as long as you can find someone willing to take the opposite side.

      • Re: (Score:2)

        by shma ( 863063 )
        Yeah, most of us in North America are familiar with prediction markets like Intrade [intrade.com]. Those aren't considered gambling sites, since what you are actually doing is trading a contract that pays out if the event happens. I can illustrate the difference between this and a bet with an example.

        Say I buy 1000 contracts of "Bin Laden to be captured by end of May 2009" for 5 cents each. Each contract pays out 100 cents if he is captured. Now say tomorrow the BBC reports that the US has engaged Al-Quaeda in a reg

      • Re: (Score:3, Interesting)

        by Richard_at_work ( 517087 )
        Sod websites, most physical bookmakers in the UK will take a generic bet and give you odds themselves. Betting in the UK is not limited to chance or sports, you an literally place a bet on almost anything.

  • if you don't allow it, it just moves offshore and continues uninterrupted, resulting in nothing but your own businesses not getting a share of the pie

    • Actually, that's not what happened. The previous bill made it illegal for credit card companies to send payments to online gambling sites, so no, it didn't move offshore. The WTO actually ruled it was an illegal [washingtonpost.com] when we tried to ban the payments to offshore online gambling parlors, but to my knowledge, we just ignored them.

      • What happened was the gambling sites just ignored the US - in fact here in the UK they make so much money they're sponsoring TV programmes and can afford primetime advertising. It's a huge industry ready and waiting to move in.

        Of course the US has killed its own online gambling industry stone dead, so it'll all be foreigners making the money, but... isn't that what the politicians wanted? Oh, it wasn't? Um...

        • In the US, the gambling sites are *effectively* sponsoring TV shows too. They're just using .net sites, rather than the .com sites. The .net sites all have free games, and presumably they're expecting people to mistakenly go to the .com site instead and find out about the pay games.

          I believe the .net vs .com distinction for gambling sites originally came about because of players wearing logos for the various online sites on TV shows. One show (probably 2003 or 2004 WSOP) required them to show only .net s

  • Captain Oxymoron to the Rescue! (Score:4, Insightful)

    by Tackhead ( 54550 ) on Tuesday May 26, 2009 @05:23PM (#28101777)

    " 'Illegal offshore Internet gambling sites are a criminal enterprise, and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age," says Representative Spencer Bachus, Republican of Alabama and the ranking member on the House Financial Services Committee.

    Wow, the doublethink [wikipedia.org] boggles the mind.

    If the gambling ban is repealed, these sites would immediately cease to be "criminal enterprises", and become legal offshore Internet gambling sites.

    If the gambling ban is repealed and these sites chose to operate "unfettered within the United States", they'd then become legal, American gambling sites.

    The whole fracking point, Rep. Bachus, is to eliminate these "offshore criminal enterprises". By making it legal, you can bring them onshore, where they can be taxed and regulated, just like state lotteries and privately-owned casinos.

    Speaking of privately-owned casinos, at least Sen. Reid of Nevada has a "legitimate" reason to be a roadblock: He just doesn't want to see Vegas have any competition.

    The dumb part about Reid's objection is that the legalization of online poker would bring a lot of new players into the game. Some of 'em might even end up enjoying it so much they end up going to Vegas to play the game in meatspace. Quit acting like the RIAA of gaming, buddy, and you just might make a few more bucks.

    • The point is that many, or most by some estimates, of the online gambling sites are run my organized crime networks in off-shore tax havens. They help launder money and create new money that is then funneled to other enterprises, like buying stolen goods, weapons, drugs, etc. I'm all about freedom on the internet, but cracking down on organized crime is a good thing IMHO.

      • Not really. Online gambling is legal just about everywhere except the US. It's also taxed and regulated - no incentive for organised crime to get involved as it's a huge very profitable industry.

        You can launder money in Vegas too.. or, much easier, just have an insider in a bank.

        • It's also taxed and regulated

          Which is why most of them are registered in tax-free offshore financial centers. They're owned by anonymous International Business Companies with bearer shares. Most of these places have few laws regarding these kind of things and respond kindly to cash incentives. Some regulation.

          no incentive for organised crime to get involved as it's a huge very profitable industry.

          That's precisely why organized crime gets involved, Einstein. Money for nothing and your chicks for free.

    • What reason would these alleged criminal enterprises have for coming into the fold if all it brings is additional regulatory red tape and taxation for their business? The fact that they're offshore makes them somewhat difficult for the US to touch and as far as I know there really hasn't been much in the way of legal action brought against these websites.

      Even if the gambling ban is repealed, why should these websites submit to some authority when it's clear from their current position that they obviously do

      • Money. Lots and lots of money. More so, than what they can aquire in their current state.

        It reminds me of the World of Warcraft localization in China. Blizzard had to change a large portion of its content and put a timer on time spent playing it for the Chinese government to ok it. Blizzard changed its Chinese version, satisfied the government, and raked in a huge segment of players willing to fork over money.

        I'm sure any amount of "regulation and taxation" would be outpaced by the huge revenue from the m

    • If the gambling ban is repealed, these sites would immediately cease to be "criminal enterprises", and become legal offshore Internet gambling sites.

      No. There is also the current problem of off-shore casinos reneging on paying their largest winners. To make off-shore gambling more legit, we would need to make those enterprise bonded (or insured) with actual assets in the US that could be taken away and given to the winners in case of breach of contract.

      And while we're at it, we'd probably also need some ki

      • Re: (Score:2)

        by cdrguru ( 88047 )

        Why? I am all in favor of offshore casinos not being held to any higher standards than your ordinary Ebay seller. Mostly, I want to operate a online casino with slots and roulette. Just as soon as it is legal to do so and not get hassled by credit card companies.

        I figure this should be worth millions and anyone with half a brain can see that. Look, Las Vegas pays out aroun 98% on slots and they are raking in the dough. I figure you pay out at 80% and make a big deal out of each and every winner. Send

        • Las Vegas pays only 98% (I've heard 95% but the number is fixed) because they have to by law. That's the whole point of gambling being REGULATED. You would still be violating the law if your payouts were 80%. And in order to be regulated you would have to submit to costly audits of both your books and your code. This bill will not let you put roulette and slot machines on the web from your basement. But good luck trying it.

    • By making it legal, you can bring them onshore, where they can be taxed and regulated, just like state lotteries and privately-owned casinos.

      Actually, you wouldn't need to bring them onshore to do that. Gambling can be taxed under WTO rules as long as onshore and offshore gambling are taxed equally. In fact, the US is currently under WTO sanctions because our gambling laws are at odds with our treaty obligations with regard to gambling.

      Speaking of privately-owned casinos, at least Sen. Reid of Nevada has a "legitimate" reason to be a roadblock: He just doesn't want to see Vegas have any competition.

      Pure cynicism if ever there was such a thing; its hard to be more blatantly biased than that.

      The dumb part about Reid's objection is that the legalization of online poker would bring a lot of new players into the game. Some of 'em might even end up enjoying it so much they end up going to Vegas to play the game in meatspace.

      It is not the role of government to ban activities which people might enjoy too much, even to their own detriment. The l

    • If that's really the case, my guess is that they've run the odds of that happening. I hear they have a few people who know how to do that, 'round them parts. ;)

  • Nevada (Score:5, Insightful)

    by Ohio Calvinist ( 895750 ) on Tuesday May 26, 2009 @05:24PM (#28101799)
    I don't think Nevada has a lot to worry about in the realm of online gaming. Brick-and-mortar casinos offer a lot that online gaming can never provide. Casino gambling may be the cornerstone of the Nevada economy, but it has diversified to the point that other gaming enterprises do not appear to directly compete, in the form of fine dining, entertainment, and all that Vegas has to offer.

    For instance, if you've ever driven North on I-15 on a friday afternoon out of California, people go to Vegas in droves despite that California has easily accessible Indian gaming with all of the same games/slots (except for Sports betting) that Vegas casinos do.

    The Internet might take a small portion of the market for gaming, but the lion's share save up their "gambling budget" and take a trip to Vegas or a local casino/resort for the experience of all the non-gaming activities and gamble in an environment that makes it fun even when you're losing.

    Now, if the internet could comp you free beers in the comfort of your home, Mr. Reid can start to worry.

    • I've been thinking about all that heavy bumper to bumper traffic on I-15 every weekend. I have a proposal that will alleviate the heavy traffic, reduce air pollution and consumption of fossil fuels. Additionally, it would provide a badly needed economic boost to southern Nevada and California (which have both been hit badly by the recession). It would be an effective use for some of the Federal stimulus money and would help both areas benefit from foreign tourism, thus reducing the national trade deficit. T

  • Vice laws. (Score:5, Insightful)

    by Hatta ( 162192 ) on Tuesday May 26, 2009 @05:27PM (#28101833) Journal

    How about we also end the drug and prostitution ban? Just saying.

  • 50/50 (Score:5, Interesting)

    by owlnation ( 858981 ) on Tuesday May 26, 2009 @05:31PM (#28101869)
    I'm torn. Part of me detests censorship and state interference, my belief is that people can make up their own minds as to what's harmful.

    On the other hand, since the US Gambling ban the whole World has seen a dramatic reduction in the most obnoxious flashing gif adverts since punch the monkey.

    Do I hate censorship or annoying flashing ads more...? Honestly I really don't know...

    • I realize that you're being facetious, but you can get rid of the obnoxious flashing ads through a simple [mozilla.org] browser add-on, wouldn't it be better to get rid of the censorship?

    • Get AdBlock [mozilla.org] instead and legalize online gambling. There is no need to compromise your freedoms just to avoid having to punch the monkey.

  • I've got a simple way to deal with online gambling without banning it. Just put in place limits on the financial liability. If it's really "think of the children" then just make it like contracts. A minor can enter into a contract but the contract isn't enforceable, so who in their right mind would bother?

    If the law makes it clear that an online casino can't collect from a minor then there's no motivation for them to try to get a minor hooked so the whole "think of the children" argument falls apart.

    As for

    • Sounds like a good idea. I was pretty fed up with how gambling came to Iowa, but since the Genie is out of the bottle, I say equal opportunity. Why not allow the stupid tax to hit everyone. Just make sure gambling losses are non tax deductable, and that they tax the bejesus out of the online casinos.

    • This would work up until someone gets the bright idea of letting their sixteen year old kid play online poker. If the kid wins, the father and son collect the winnings. If the kid loses, then obviously they can't lose because the person playing wasn't an adult. Illegal as hell, but who can really prove things one way or the other?

      Here's my own wonderful idea: why not provide a free site where minors can gamble with money that isn't real. Instead they can hone their skills and use their funny money points to

      • Here's my own wonderful idea: why not provide a free site where minors can gamble with money that isn't real. Instead they can hone their skills and use their funny money points towards some kind of booby prize.

        I believe that site is called PartyPoker.net.

  • It could pass (Score:4, Insightful)

    by clarkkent09 ( 1104833 ) * on Tuesday May 26, 2009 @05:32PM (#28101881)
    If you ask me it is outrageous that we have given our government the power to even be discussing whether people should be allowed to make a choice to gamble, online or not. It is simply not any of the government's business what I do with my money as long as I am not hurting anybody else.

    But that aside (a big issue to put aside, but anyway) I wouldn't be so sure that the bill won't pass. As we see all over the country, state governments have been steadily allowing more and more gambling purely as a way to increase the tax revenue in difficult times, so the trend is towards more gambling, not less. The way they see it is not as an issue of rights through. What they see is all this money going out to overseas companies without the US government being given a chance to keep a share for itself, which in their mind is the real crime here.

  • So...illegal things are criminal? (Score:3, Insightful)

    by KevlarTheSleepinator ( 827583 ) on Tuesday May 26, 2009 @05:33PM (#28101883)
    "Illegal offshore Internet gambling sites are a criminal enterprise"

    AKA: Illegal (things) are a criminal (thing).

    No kidding! If it becomes legal, then it's no longer a criminal enterprise now is it? He needs to give a better reason why it should remain illegal than just because it's illegal now.

  • Holy Shit! (Score:4, Informative)

    by Mix+Master+Nixon ( 1018716 ) on Tuesday May 26, 2009 @05:40PM (#28101957)

    Harry Reid is going to review something carefully! I wondered what it would take, as countless violations of the US Constitution, the Geneva Convention, and human decency weren't sufficient. Now I know: you have to threaten a microscopic portion of Las Vegas's profits.

  • Reasons to support poker players (Score:4, Insightful)

    by anaphora ( 680342 ) * on Tuesday May 26, 2009 @05:44PM (#28101991) Journal
    Poker is a game of skill
    Playing around a kitchen table or in cyberspace, the same talents and skills required to win at poker hold true. Observing betting patterns and watching when players fold are just as critical when playing poker over the Internet as when playing in person.

    In addition, since poker is not a "house game" like blackjack and others, the game requires players to compete against other players. This characteristic is true whether someone is playing online or offline.

    Poker is a game with a predominance of skill. Like chess, poker is a "thinking man's" game which relies on mathematics, psychology and money management.

    Billions of tax revenue is being lost.
    According to an economic analysis, 3.3 billion in federal tax revenue and addition 1 billion in state tax revenue could be raised if the federal government were to regulate Internet poker.

    Poker is a source of charity.
    In 2006, millions of dollars were raisedfor local and national charities through poker tournaments. One event in D.C. featuring 15 Members of Congress raised more than $288,000 to fight cancer.

    Poker is one of the great American pastimes.
    The game has been enjoyed by presidents, generals, Supreme Court Justices, Members of Congress and average Americans for more than 150 years.

    Playing Poker Online Is Simply an American Tradition Evolving into the 21st Century
    Americans have played poker throughout history. Playing poker on the Internet is simply an example of an American tradition evolving into the 21st century. It is unfathomable that poker, an American pastime and game of true skill, should be banned for the millions who enjoy playing responsibly.

    75 percent of Americans oppose banning online poker.

    According to national polling, a vast majority of Americans oppose federal efforts to ban online poker. Online Poker can be safe and regulated.

    Appropriate federal regulation can ensure that minors are kept out of sites, services are provided to problem gamblers and the proper taxes are collected. The current system does nothing to protect children, problem gamblers and it is allowing billions in tax revenue to go overseas.

    Online Poker vs. Online Horse Racing Betting?
    If Congress allows me to bet on horses and state lotteries online, why can't I play a skill game like poker with other consenting adults?

    Prohibitions don't work.
    The UIGEA effectively bans online poker in the U.S. and drives those players underground. Meanwhile, poker continues to grow in popularity nationwide.

    • thanks for the plagiarism (Score:2, Informative)

      by Anonymous Coward

      Thanks for going to all that trouble html-formatting this pdf file [pokerplayersalliance.org] instead of just linking to it. Golly gee your karma must be soaring!

    • I agree with your points, and I think that online poker should be legal. I'd even go a step further in saying that I'm not worried about children becoming addicted, since they're already addicted to everything else (sugar, WoW, TV, etc). Addictions are a concern because by definition they represent an opportunity cost to the rest of their lives. Poker puts that cost in direct monetary terms, whereby I think people could potentially learn their lesson early, when they're more accepting of correction. Further

  • 'Illegal offshore Internet gambling sites are a criminal enterprise, and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age,' says Representative Spencer Bachus, Republican of Alabama and the ranking member on the House Financial Services Committee.

    And that is why online horse betting is totally OK.

  • ...seem pretty tame compared to the monkey knife fights, men/cow marriages, and re-broadcasting of Major League Baseball with implied oral consent

  • Excuse me, Mr. Bachus... (Score:3, Interesting)

    by thousandinone ( 918319 ) on Tuesday May 26, 2009 @05:51PM (#28102065) Journal
    ...and I mean this with the utmost respect, mind you. "Illegal offshore gambling?" What the FUCK are you talking about?

    I wasn't aware that gambling sites that operate outside of the United States fell under the US' legal jurisdiction. Is there any kind of law, convention, or agreement (maybe from the UN?) that supports this?

    Because otherwise, I see this as an argument FOR legalizing gambling- if there are sites outside of US jurisdiction where it is available, then criminalizing it just cuts off potential tax revenue when the gamblers take their business elsewhere.

  • ...crude oil futures are trading at $62.70/bbl.

    Who needs your penny ante poker games when I can drop some real cash on the biggest numbers racket around.

  • This is about poker, and hypocrisy (Score:5, Insightful)

    by MattW ( 97290 ) <matt@ender.com> on Tuesday May 26, 2009 @06:01PM (#28102193) Homepage

    A major proponent of this bill is the "Poker Players Alliance" (http://pokerplayersalliance.org/). They've been lobbying for several years now; they formed around the time Bill First put the UIGEA into a port security bill using a procedural move.

    I think the majority of people who are passionate about seeing this bill pass are poker enthusiasts who just want to be able to play poker online as a hobby. I don't give a damn if they legalize online slot machines or keno, and I think it's generally ridiculous to utilize such things. At least in Vegas, you get free drinks while wasting your money. But poker is a game of skill in the long run.

    The UIGEA was ethically bankrupt:

    * It carved out exceptions, such as betting on horses
    * 43 States have State Lotteries, aka, the "Tax On People Who Are Bad At Math". These are games which, like typical casino games, are inherently "unbeatable". They are pure chance, and stacked very heavily against the player.

    At this point, millions of people are still playing poker online, but they don't enjoy any sort of regulatory protection, and the United States does not enjoy any tax revenue from it; although the UIGEA burdens our banks with a significant cost of compliance by trying to force them to screen out transactions intended to move money to the online poker houses.

    As far as Harry Reid goes, I think online poker has been a net benefit to Vegas; huge numbers of players visit for the World Series of Poker each year, as well as a bunch of lesser events. And those numbers have dwindled since the UIGEA passed in 2006.

    • Re: (Score:2)

      by cdrguru ( 88047 )

      I want to set up my own roulette and slot machine "casino" online. I figure I can pay out 80% of the take and keep lots of people happy.

      Just as soon as it is legal to have online gaming in the US. Why wouldn't it be legal for me to have my own casino like that?

      • Re: (Score:2)

        by synaptic ( 4599 )

        Because you'll be doing monte carlo simulations to hit that 80% house take when you don't need to go through all of that. You would be cheating.

        Generate really good pseudorandom numbers and let the rules of the game and probabilities do the rest. Besides, you'll get caught eventually by people who record every single game and do the math.

  • Isn't gambling a state matter currently? Why not let the states handle it?

    • Re: (Score:2)

      by tepples ( 727027 )

      Isn't gambling a state matter currently? Why not let the states handle it?

      Because you can't be sure that a particular user isn't accessing an online gambling site from out of state through a closed proxy. Out-of-state users fall under federal jurisdiction per the commerce clause of the Constitution.

  • Before they were illegal, they weren't criminal enterprises. If you repeal the law that bans them, they will no longer be criminal enterprises.

    So, they're illegal because they're criminal because they're illegal.

  • If I can set up my own "casino" online, then I am all for it. If it is restricted to some type of licensed (and heavily taxed) entities as gaming is now, I am not interested at all.

    The potential for legal "private" gaming sites is enourmous, especially if these are allowed to operate without oversight. Even if there are reporting requirements, as long as they aren't too onerous, it would be a great thing to get into.

    Allowing Harrah's to run an online site is pointless. Running it the same way Indian Gami

  • Hate the sinner. Seriously. It's their problem.

  • - but much as I would like to see it not exist at all, the fact is that it does, and there are people who genuinely like it. It is never a good idea to try to will something like that away by passing a law; we simply have to learn to live with it in a sensible way, which fortunately is possible.

    But living sensibly with things like drugs, gambling and other things society doesn't feel comfortable with means educating people about these things, preferably from an early age. Criminalising a common activity cre

  • The bill that banned online gambling was spearheaded by Senator Frist (R-TN) who retired from politics immediately afterwards.

    I wrote him a letter and he wrote me back with the same tired slogan that online gambling "frays the fabric of families".

    Well, I don't know about that, but if that's true so does brick and mortar gambling and state-sponsored gambling/lotteries and he didn't seem to care about that. Nice payday for him, I guess, with a perpetual government pension to boot.

    I should have become a polit

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