Online Gambling: Morality or Moola?

On October 13, when President Bush signed the Security and Accountability for Every Port Act, buried within was also the Unlawful Internet Gambling Enforcement Act. Financial transaction processing companies are forbidden to make payments to Internet betting businesses, most of which are overseas.

Critics focus on the libertarian argument that prohibiting online gambling is excessive government interference in our private lives.

Charles Murray’s op-ed in today’s New York Times says, “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 recounts the Prohibition saga, of widespread disregard for the law, and throws in the “stupid” excesses of OSHA, to conclude, “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.”

Granting those points, Murray misses several key points that went into this law.

First, I’d hardly call a “scattering” moralists or those who think that irresponsible excesses should be reined in. Southern Baptists, for example, I’m sure speak for many more than just a scattering, or Southern Baptist:

Southern Baptist public policy specialist Richard Land applauded Bush for his action and again commended Congress for its passage of the anti-gambling legislation.

“All friends of families should be pleased with this measure,” said Land, president of the Ethics & Religious Liberty Commission. “It will certainly help insulate homes from a parasitic addiction to gambling that sucks the life out of families and destroys marriages.

“Thousands of families have faced financial ruin and bankruptcy because of one of the fastest-growing addictions in the county,” he said. “This legislation will make it more difficult for these Internet gambling predators to reach into the pockets of America’s families and steal the future of children and spouses.”

Unlike games regulated and monitored in the States, to be reasonably honest, the Internet casinos are not ensured to give a sucker an even break. That is a reasonable governmental concern.

Lastly, but I think most importantly to the passage of this online wagering prohibition, is that our governmental casino bosses both reacted to contributions and pressure from gambling interests established in the U.S., from proliferating, prosperous “Indian” casinos (about as “Indian” as giant gambling companies can make them appear, like cigar store fronts), and from themselves missing out on taxes or seeing a competitor to the worst shell game in town, the lotteries with their pittance payouts.

Nevada wasn’t so shy, when in 2001 it passed a legal structure for online gambling, that of course enriched the state, Nevada knowing a good tax-take con when it sees it. Washington State, on the other hand, outlawed online gambling in 2006. The bill’s sponsor “received numerous campaign contributions from land based casinos.”

Business Week expects the online gambling to go further underground.

Instead, the law will drive out regulated, publicly traded companies like PartyGaming, the Gibraltar-based parent of PartyPoker, and make way for private gambling companies and banks based in nations where such industries are loosely policed at best. As a result, the new law could ultimately make billions of dollars in U.S. online gambling transactions more difficult to trace, and increase the likelihood that funds end up in criminal hands.

So, alright already, just pay up “protection”, er taxes, to the government Dons, and let the big U.S. public gambling companies in on their “cut” of the action, throw in some honest gambling regulations for the honesty-minded, and let the games begin, resume, come out of the alleys.