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Copyright © 2006 The Triangle

HEADLINE: The war on poker: Internet gambling is on its last legs

Author: Eric Stephenson

Body:
No more PartyPoker. No more PokerRoom.com. No more online gambling, period. On October 11, Congress passed The Unlawful Internet Gambling Enforcement Act of 2006. The bill prevents you from using your credit card to place any sort of wager online. Pick your vice: poker, ponies, packers ­- no longer can you bet online. Why? The bill says that "Internet gambling is a growing source of debt collection problems … for the consumer credit industry." Rep. Jim Leach (R-Iowa) called online betting "crack cocaine for gamblers," and said, "Never before has it been so easy to lose so much money so quickly so young." Okay, I guess ­- if you suck at poker. There are huge holes in this logic, like state-sponsored lotteries and regulated horse racing. Gambling addicts will find a way to bet just like drunks will find a way to drink.

The real issue here is that all of the major online wagering companies are offshore. Well, there's a reason for that. Of course, tax loopholes are the first thing that come to mind, and that's part of it for sure. Gambling is regulated by the state. And by regulated, I mean taxed heavily. Casinos pay the state like an Italian bakery pays the Don for protection.

Still, taxes aren't the only thing that these online betting companies are getting around. The problem is that the law only allows for online betting if the firm taking the wager is in the same state as the person placing the bet. This completely subverts the e-business model. Ironically, the government seeks to keep some revenue in-house through taxing online betting companies, but forcing them on-shore is a death sentence. Sounds like a lose-lose to me.

Another angle on the issue is that online gambling is cutting into casino revenue. It is true that the American Gaming Association lobbied Congress to look into regulating and taxing online gambling in the U.S. as early as 1995, when the first Internet gambling site opened. To me, this doesn't make sense. Sure, casinos see online gaming as a $12 billion-plus industry and they think that's money that should be lining their pockets. But I don't think that's the way it works.

Anyone else notice poker mania sweeping the nation over the last few years? Dorm lounges across the nation are littered with poker chips as you read this, and more than likely, on at least one of the ESPNs, there's poker on TV. How ironic is it that we're sitting around a TV watching other people play cards? But it's exciting! The popularity of poker has grown rapidly with the popularity of online poker. Many amateurs like me play online to gain experience and confidence before sitting down at a real table. Instead of cutting into revenues, online poker has bred more card players in general and therefore expanded the casinos' client base. I would never have sat at a table in Atlantic City or Vegas if I hadn't learned how to play online first.

This law preventing online betting is archaic. Really, it is just an amendment to the Wire Act of 1961, which prohibits "wiring bets" or placing them over the phone. E-commerce has changed the business arena and Congress should change the rules. Online gaming should be considered e-commerce and regulated accordingly, not subject to ancient gambling laws. It is grossly hypocritical for the government to condone gambling when casinos bridge budget gaps, but condemn it when they can't get a piece. I'm tired of the government telling me what to do. If I want to sit at the bar and smoke while gambling away the money I got from my student loan, isn't that my prerogative?

Eric Stephenson is a junior majoring in entrepreneurship. He can be reached through ed-op@thetriangle.org.

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