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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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