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Devil's Advocate: Online Poker Ban

Hoyazo left a comment to my last post about how the ban on online poker may actually help me in a roundabout way. He was understandably perturbed by the fact that I was essentially condoning the US Government's direct infringement on something done in the privacy of our homes. I am the self-titled Devil's Advocate of Poker Bloggers, so just bear with me for a moment while I induce my ability to argue any side of any issue without any logic or support. Here goes:

The truth is, dear reader, that our government, while doing something that inconveniences us all, is not doing anything improper. Now, before you start throwing things, I am not saying that I am for the law. I am a recently self-identified Libertarian (as far as I understand the word), and I deeply believe that the government should not over-legislate things such as online poker, which only effects the player and not the rest of society as a whole. Even though I dislike the law, though, it doesn't mean that the law is inherently wrong.

On its face, to anyone who plays online poker, the law is horrible. We have seen the actual effects, and while people argue about the varying degree of effect it will have on online poker, we can all agree that it negatively effects the industry and our favorite degenerate passtime. For this reason, it is wholly understandable to be shocked at this stupid law and I encourage anyone who has a problem with the law to do whatever they can to influence those in power who could effectively revoke or modify it. But, and I'm flinching as I type this, the law in and of itself is not improper, and is in many ways justifiable.

Okay, okay, so right now you are getting red in the face and slamming your fists on the keyboard. I gotcha. It isn't a popular position to take on the interwebs, but its not unsupported either. The bottom line is that online poker takes money away from the United States and distributes it to other nations and individuals. All of this money being syphoned from the US is not taxed by the United States. The US should man up and just create a regulatory scheme, like the UK, but because of our puritanical society, the lawmakers decided to ban online poker all together. I'm sure their desire for votes in Bible-thumping areas didn't hurt their decision either.

I've seen the argument that the politicians and government hate online poker because they don't see a dime from it. That is likely true, 100%. But there is another aspect as well. Online poker is gambling, and the government has traditionally imposed laws regarding gambling. Truthfully, gambling should be resolved by state governments, who are granted the power to make laws for the "welfare" of the people. In other words, states are given the power to make laws to protect their citizens, like, say, anti-smoking laws or anti-gambling laws. The right is given to states because they are better equiped to make laws for their local constituents in this large, varied nation of ours. That is why there are no casinos in New York City, or New York in general, except for Indian reservation casinos and some other cutouts; Nevada, meanwhile, allows gambling.

Online poker, however, is such that a state-by-state ban will prove largely ineffective. In fact, it is my understanding that Nevada already has an anti-online gambling ban in place, but it was ineffective because of the very nature of online gambling. The federal government, under the Commerce Clause, can make laws regarding interstate or international trade. This and other powers of the federal government have been used to make all sorts of "welfare" laws, even though "welfare" laws are the sole province of the states. One example involved the age of drinking. The federal government stated that if the drinking age was not raised to 21 in a given state, the state would not receive certain federal highway funds, thereby turning a "welfare" law into something the federal govenment can legislate, a federal spending issue.

So, the analysts have focused on the financial aspect of the law. They assume that the govenment is pissed that they aren't receiving their cut of this huge industry. But gambling has been traditionally made illegal in the US, and where it is legal, it is highly regulated. Online, there are no such protections (right now, although US licensing could fix that). So, the government's law against transferring to online gambling sites is not just the US government's jealousy over money made by private companies outside of the US. It is also about protecting people from an unregulated gambling establishment, one in which the age of the bettor is not an issue, the accessibility is easy, cheating can and does happen (by other players by collussion, at the very least), and US citizens are spending countless dollars or are winning countless dollars without any way to enforce tax issues.

Now that I got this out of my system, let me add this: The beliefs stated above are merely the opinion of Jordan as the Devil's Advocate of Poker Bloggers and does not accurately reflect Jordan's compassion and understanding of fellow online poker players or Jordan's distaste over regulating something that we, as online poker players, know is essentially a safe, harmless activity.

I actually have a lot more to write about, including my thoughts on the potential poker blogger Gathering in AC in March, the effect of the anti-online poker laws on bloggers and poker blogging, and a great conversation and some HU matches against the one and only Veneno. But since I've rambled on for long enough, I will save that for later today or tomorrow.

Until next time, make mine poker!

posted by Jordan @ 12:16 PM,


At 2:21 PM, Anonymous Anonymous said...

Nice analysis, Jordan. One other aspect of this is the argument that the money trail from eWallets to gaming sites and then elsewhere is a helluva way for supposed terrorists to (conceivably) launder money, which is part of the reason that the legislation found its way into a homeland security-related bill.

As you correctly state, the best way to address all of these issues is for the US to regulate the online gaming industry, to whatever extent it can. Unfortunately that was not going to happen with a Republican administration and congress...small government and all that. Maybe with a democrat controlled congress (and who knows what will happen in '08), new legislation could be passed to establish said regulations, as opposed to the simple prohibitions we have now.

I'm not that optomistic about anything right now, but the Neteller thing is still too fresh in people's minds. Maybe after the dust has a chance to settle, a path might emerge. Either one that lets us continue pretty much as before, or a government sanctioned and regulated one, but I'd bet on the "business" solution arriving far before the goverment reaction. We shall see...

At 4:45 PM, Blogger Jordan said...

Thanks Hoff. I neglected to mention the money laundering issues, mostly because I find them to be specious. There is definitely an opportunity to launder money, but the same can be said about B&M casinos (I think), and regardless, until there are substantiation of those issues, I find them to be bullshit. Thanks for bringing them up, though, because it is an often-cited reason for the law.

At 6:01 PM, Anonymous Anonymous said...

Blogger gathering in AC in March?

Updates! Updates!

At 11:25 AM, Anonymous Anonymous said...

The government says it is against gambling and that states can not decide on a state by state basis, but it isn't gambling they have a problem with it is unregulated gambling, and if the government wanted to they could regulate this section of gambling, the government can not be opposed to gambling when they condone:
The lottery - talk about a gamble
The Stock Market - The fluctuation of funds requires skill and luck and unseen consequencs can make investments a gamble
Insurance - the entire industry began because people used to bet in the 1600s whether a ship would return from its trip, the bookies got so good the owners of the ship hedged themselves by placing bets
Casinos - scattered through US
There isn't a law against gambling and money laundering could not be done as easily in a regulated industry because everything would be taxed and timestamped and even accounts could be monitored. Regulation is a solution, a ban is only a delay, and while the highway funds was a good idea, its my personal theory that, that particular policy is at least partially if not more so responsible for the situation in New Orleans...good idea - huge disaster...and thats where this current approach is DA (Devil's Advocate) to another
May be interested in March keep me in the loop

At 3:09 PM, Blogger Alceste said...

That's not quite right, as the law explicitly permits state-by-state decisions on whether they want to allow intrastate internet gambling. That is, if the New Jersey legislature wants to allow the AC casinos to host internet poker sites subject to the oversite of the New Jersey Gaming Commission, then it can -- so long as those sites are only open to NJ residents (the casinos would be barred from interstate commerce -- which is -- supposedly at lest -- the only thing the federal government can regulate here).

Also, there's a potentially big hole in the definition of "unlawful internet gambling." If a state were to decide that all internet gambling was permitted within its borders, then I am not sure the law would apply (more time needed to take a look at that one).


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