Three well-considered articles on online gambling and the government's recent action against the industry appeared this week in respected mainstream media such as Newsweek, LA weekly and the New York Times.  It made a refreshing change from the usual negative run-of-the-mill approach adopted by too many writers, and subsequent pick-up coverage reached out to an ever widening audience in the United States.

The GOP's Bad Bet

In a thought-provoking op-ed article in the New York Times, widely carried by other media, Charles Murray of the American Enterprise Institute  observed that the restrictions on financial channels to online gambling sites (see previous InfoPowa reports) may do significant political damage to the Republicans this fall and long-term damage to Americans’ respect for the law.

"So, a month before a major election, the Republicans have allied themselves with a scattering of voters who are upset by online gambling and have outraged the millions who love it," Murray astutely observes.  "Furthermore, judging from many hours of online chat with Internet poker players, I am willing to bet....that the outraged millions are disproportionately electricians, insurance agents, police officers, mid-level managers, truck drivers, small-business owners — that is, disproportionately Republicans and Reagan Democrats.

"In the short term, this law all by itself could add a few more Democratic Congressional seats in the fall elections. We are talking about a lot of people (an estimated 23 million Americans gamble online) who are angry enough to vote on the basis of this one issue, and they blame Republicans," he continues.

The writer theorises that society is weakened every time a law is passed that large numbers of reasonable, responsible citizens think is stupid. Such laws invite good citizens to choose knowingly to break the law, confident that they are doing nothing morally wrong, opines the writer, commenting that if a free society is to work, the vast majority of citizens must reflexively obey the law not because they fear punishment, but because they accept that the rule of law makes society possible.

Murray points to the reaction to Prohibition on alcohol in the of the 'twenties, the 20th century’s stupidest law, as the archetypal case. He gives examples of other silly or inequitable laws that are regarded with contempt by tax-payers as impeding progress with no collateral social benefit, and are therefore widely fudged or ignored

"For millions of Americans, our day-to-day relationship with government is increasingly like paying protection to the Mafia — keeping it off our backs while we get on with our lives," he observes.

"The temptation for good citizens to ignore a stupid law is encouraged when it is unenforceable. In this, the attempt to ban Internet gambling is exemplary. One of the four sites where I play poker has blocked customers because of the law, but the other three are functioning as usual and are confident that they can continue to do so. They are not in America, and it is absurdly easy to devise ways of transferring money from American bank accounts to institutions abroad and thence to gambling sites," the author claims.

"And so the federal government once again has acted in a way that will fail to achieve its objective while alienating large numbers of citizens who see themselves as having done nothing wrong," he concludes "The libertarian part of me is heartened by this, hoping that a new political coalition will start to return government to its proper functions. But the civic-minded part of me is apprehensive. Reflexive loyalty to the rule of law is an indispensable cultural asset. The more honest citizens who take for granted that they are breaking the law, the more their loyalty to the law, and to the government that creates it, is eroded."

Bush's big bluff

LA Weekly columnist Marc Cooper wrote about the US situation in an article titled "Bush's Big Bluff" with an introduction that described hundreds of deprived LA online gamblers forced out of their bedrooms, out of their pajamas and into their cars "...because of one of the stupidest — and most hypocritical — laws yet to be passed by the Republican Congress and signed into law by You-Know-Who."

Clearly irate at the passing of the new US law, Cooper says the US ban appeared to fly completely under the media radar last week when something like 23 million Americans "....probably twice the number of people who would vote for Dubya nowadays" who play online objected to it.

"What’s ticked off a lot of online card players is the devious way in which the Bushies slid the ban by the American people," opines Cooper.  "With no public debate whatsoever, Senate Majority Leader Bill Frist attached the bill as a rider on the much-belated SAFE Port Act, and the president signed it last Friday. The veritable Godfather of Poker, Doyle “ Texas Dolly” Brunson, publicly fumed: “I can’t believe the underhanded way this new bill restricting online poker was passed through Congress. What does Internet poker have to do with the safe-port bill? We Texans don’t like this kind of trickery.” Neither do more than 100 000 others who [are members of] the prolegalisation Poker Players Alliance, the PPA," says Cooper.

Warming to his political theme, Cooper scathingly writes: "Looked at coldly, you have to interpret last week’s prohibition as just one massive and rather transparent bluff. The Republicans (and a lot of Democrats) are swimming in gambling-industry cash. That’s what the entire Abramoff scandal was about. Palm Springs–area Republican state Senator Jim Battin, just to cite one egregious example, has sucked up a whopping $1.3 million in casino-related campaign contributions since coming to office in 1994. Just last week the gambling Agua Caliente tribe dished out $450 000 to the Riverside County Republican Party to defend the candidacies of two pro-casino GOP lackeys, sais the author: "...and I haven’t heard of them refunding the loot on moral grounds."

"The Republicans are, in practice, about as opposed to gambling as they are to running budget deficits. The only glitch with Internet poker is that by already existing law, online gambling sites were all offshore operations that didn’t need to pay out campaign tributes to our elected defenders of youth."

The columnist ends in predictive mood, forecasting: "The smart money says that the White House ban was but a ruse. Shortly after the election, expect a rowback from the administration that will exempt poker from other types of prohibited online wagering. In the name of decency and defense of morality, the Congress — controlled by either party — will announce a strict regulation of newly legalized online poker.

"This time around, however, the gambling sites will be required to be onshore and taxed. And in return, the gambling entrepreneurs — most likely the same conglomerates that now own most casinos — will repay their congressional benefactors with a healthy campaign rake. As they say at the tables, “That’s poker.”

Prohibition 2

Writing in the respected mainstream news magazine Newsweek under the appropriate title "Prohibition II", George F. Will says that when government restricts Americans' choices, ostensibly for their own good, someone is going to profit from the paternalism.
 
He goes on to ask whether Prohibition II is being launched because Prohibition I [on alcohol in the 'twenties] worked so well at getting rid of gin. "Or maybe the point is to reassure social conservatives that Republicans remain resolved to purify Americans' behavior," he postulates but adds,  "Incorrigible cynics will say Prohibition II is being undertaken because someone stands to make money from interfering with other people making money."

Will goes on to recap on the signing into law of the anti-online gambling measure, which seeks to disrupt financial channels to online gambling sites, but leaves Internet gambling on horse racing, state lotteries and fantasy sports all untouched. He comments on the refusal of US politicians to heed history's warnings about the probable futility of this adventure.

"Supporters of the new law say it merely strengthens enforcement; they claim that Internet gambling is illegal under the Wire Act enacted in 1961, before Al Gore, who was then 13, had invented the Internet. But not all courts agree. Supporters of the new law say online gambling sends billions of dollars overseas. But the way to keep the money here is to decriminalize the activity," he suggests.

A possible reason for big business lobbying against [offshore] online gambling may lie in the number of online American gamblers, writes Will. Although just one sixth the number of Americans who visit real casinos annually, this doubled in the last year. "This competition alarms the nation's biggest gambling interests—state governments," he reveals.

"It is an iron law: When government uses laws, tariffs and regulations to restrict the choices of Americans, ostensibly for their own good, someone is going to make money from the paternalism," he remarks.  "One of the big winners from the government's action against online gambling will be the state governments that are 's most relentless promoters of gambling. Forty-eight states (all but Hawaii and Utah ) have some form of legalized gambling. Forty-two states have lottery monopolies. Thirty-four states rake in part of the take from casino gambling, slot machines or video poker.

"The new law actually legalizes online betting on horse racing, Internet state lotteries and some fantasy sports. The horse-racing industry is a powerful interest. The solidarity of the political class prevents the federal officials from interfering with state officials' lucrative gambling. And woe unto the politicians who get between a sports fan and his fun."

Wills says that in the private sector, where realism prevails, casino operators are not hot for criminalizing Internet gambling. This is so for two reasons: It is not in their interest for government to wax censorious. And online gambling might whet the appetites of millions for the real casino experience.

He uses an amusing analogy: "Granted, some people gamble too much. And some people eat too many cheeseburgers. But who wants to live in a society that protects the weak-willed by criminalizing cheeseburgers?"  He goes on to suggest that the problems—frequently exaggerated—of criminal involvement in gambling, and of underage and addictive gamblers, can be best dealt with by legalization and regulation utilising new software solutions.

And furthermore, taxation of online poker and other gambling could generate billions for governments.

Will observes that Prohibition I was a porous wall between Americans and their martinis, giving rise to bad gin supplied by bad people. "Prohibition II will provoke imaginative evasions as the market supplies what gamblers will demand—payment methods beyond the reach of Congress.

"But governments and sundry busybodies seem affronted by the Internet, as they are by any unregulated sphere of life. The speech police are itching to bring bloggers under campaign-finance laws that control the quantity, content and timing of political discourse. And now, by banning a particular behavior—the entertainment some people choose, using their own money—government has advanced its mother-hen agenda of putting a saddle and bridle on the Internet," he concludes.