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Copyright 2005 Badger Herald via U-Wire
University Wire

March 11, 2005 Friday

HEADLINE: Online gambling should be legalized

BYLINE: By Gabe Cohen, Badger Herald; SOURCE: U. Wisconsin

DATELINE: MADISON, Wis.

BODY:
Should the government reconsider restrictive fiscal laws in the face of financial deficits, or should it hold on to long-standing principles? Recent speculation into a possible initial public offering by Party Gaming, the Gibraltar-based owner of the wildly popular PartyPoker.com Web site, has brought this question to the forefront of the business world.

The issue currently at hand is not the economic viability of Partypoker.com. According to the Poker Press, a Web site that bills itself as "The Online Poker Authority," Party Gaming controls roughly 55 percent of the online poker market and has an estimated worth of several billion dollars. However, in a move worthy of debate, Party Gaming is considering an IPO not on the well-respected New York Stock Exchange, but on its London counterpart.

The decision to go public on the London Stock Exchange should be one that raises the eyebrows of U.S. businesspeople. As the outsourcing of U.S. jobs becomes the rule and "brain drain" becomes a concern for U.S. economic analysts, the government can little-afford to push viable sources of income away with archaic laws. The acceptance of online gambling seems, at least in part, to be an answer to our current financial situation.

According to the Buffalo News, roughly 7.4 million Americans gamble online, playing poker, other card games, or placing bets on sports. Nearly any student at the University of Wisconsin could point to a friend or acquaintance who plays cards or places bets online.

There's no doubt that gambling, both in its live forms and online varieties, is a dangerous and addictive habit. However, it's also an unbelievably lucrative one, both for select players and for the governments that collect tax revenues from their playings. Reuters reported that Nevada collected $10.5 billion from their casinos in the last fiscal year. The General Accounting Office reported in 2003 that online gambling alone is worth as much as $4 billion, a number considered fairly conservative by some experts, who estimate that as much as $60 billion is gambled annually on online poker alone.

While online gambling is probably not the best use of one's time, the country in which these sites are located is largely immaterial to potential bettors. The location of online gambling corporations is largely immaterial, since as Web sites they fail to attract the questionable clientele of brick-and-mortar casinos.

The United States is at a crucial junction in regard to online gambling. According to The Associated Press, the Justice Department is pursuing legislation to stop North Dakota from becoming the home of online gambling in the United States. Should these laws be passed, both North Dakota and the federal government stand to lose a great deal of possible tax revenue. An IPO on the NYSE would contribute millions to the U.S. -- a sobering thought in the face of growing budget deficits and spending cuts on popular programs.

What we face is a case of moral and legal axioms clashing with economic realities. While the taxes generated by online gambling would hardly make a dent in a deficit measuring in the hundreds of billions, any money should be welcomed in the face of the current situation.

Make these corporations viable in the United States, and make them taxable. Surely online gambling companies would appreciate the added security of U.S. locations as well as the possibility of lucrative profits from widespread American investments. We need to open our doors to corporations like Party Gaming in the face of expansion to markets such as the Cayman Islands, Bermuda and South Africa. Given this international acceptance of online gaming, its continued proliferation in the foreseeable future is assured despite the questions of morality sure to arise in the U.S. The chartering of these corporations in the U.S. is a question entirely unnecessary because of the intrinsic character of the Internet. Should these companies choose to keep their present places of residence, the option for U.S. headquartering should still be there. In an era characterized by flagrant government overspending, we should be welcoming successful businesses to our shores, not pushing them away.

(C) 2005 Badger Herald via U-WIRE

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