Full House Busts Poker Players

If you'll indulge me for one post, I'm going to get political for a moment. Normally, I refrain from politics in this blog, but since this is an issue which directly affects me, I feel the need to speak out.

Eurobet.com, a United Kingdom based internet gaming site (specializing in sports betting, but also including poker and other casino games) announced today that effective immediately, they are closing all U.S. based accounts and refunding all American clients whatever remaining funds they may have. This decision comes as a direct result of two recent acts by legislators and law enforcement officials in the United States. Most recently was the arrest of Betonsports.com CEO David Carruthers in an airport in Fort Worth, Texas where he had a layover while flying from England to Costa Rica. For accepting bets online and over the phone, he is being charged with racketeering, conspiracy, and fraud. This came a week after the passage of bill HR-4411 in the House of Representatives which is designed to restrict the internet gambling business, including sports betting, casino games, and online poker. The bill will expand the Wire Act of 1961 to include the internet and will also make it unlawful for banks or credit cards to perform transactions with online casinos (virtually all US banks and credit cards already take this precaution by the way). Despite the bill's flawed logic, it passed easily, 317 to 93, and the Senate is now expected to move quickly to pass similar legislation.

Legislators would want you to believe that these actions are great strides towards eliminating a scourge from society. However, only the slightest bit of study reveals that this bill is both hypocritical in its terms and insulting to the intelligence of the American public. While its ostensible purpose is to ban internet gambling, the bill makes explicit exceptions for horse and dog racing, interstate lotteries, and high stakes fantasy sports leagues. So while it would be illegal to create an account with sportsbook.com and bet on the Colts, it would be perfectly acceptable to log into your TVG account from home and bet on the ponies. Some lawmakers have even tried to claim that this bill is part of the "war on terror," as internet gaming sites could theoretically be used by terrorist groups as fronts for money laundering. Seeing as how the most reputable gaming sites are actually registered on the London Stock Exchange, this claim seems to me to be purely a political ploy and without much merit. Besides, Americans know by now that the way you stop terrorism isn't by shutting down virtual poker rooms. You stop terrorism by bombing Iraqi civilians.

While this bill may deter some people from gambling online, the net effect of its passage is to turn millions of otherwise law-abiding citizens into criminals- much like the prohibition of alcohol did a century ago. It seems to me that rather than prohibition, the solution lies in regulation. There are an estimated 23 million people in the United States who play internet poker, and the Congressional Research Service estimates that Americans currently bet approximately $6 billion per year online. According to the Poker Players Alliance, regulating online poker has the potential to generate $3.3 billion in annual revenue for the US government and another $1 billion for state coffers. Granted, that's just a drop in the bucket in what is now a national debt of $8.4 trillion- but hey, every little bit helps. If nothing else, the $3.3 billion could be used to fund almost 19 days of the war in Iraq. Or if you want to be noble, it could also hire 500,000 additional school teachers, some of whom would be math teachers that could teach kids about the house edge and poker odds.

Some might argue that by regulating internet gambling within US borders, politicians would be promoting a potentially addictive and money draining habit for the purpose of its own financial gain. While there may be some truth to that, it would be naive to suggest that the government doesn't already do just that. As mentioned before, alcohol is regulated and taxed by the federal government, and there are no limitations on how much can be purchased. The SEC allows individual investors to buy securities on margin, which is in itself a form of gambling- and even worse, it's gambling with money you don't even have! Additionally, it should be noted once again that this "gambling prohibition" in its current incarnation allows individuals to bet on horses and play the lottery online!

I would also argue that properly implemented regulation of online gambling could actually help curtail gambling addictions. The government could require all US-based online casinos to be networked to each other. An individual would be limited in how much he is allowed to deposit into any online gaming account over a certain period of time (ex. $500/24 hrs, $2000/month). Lose two grand your first week of playing? Sorry, but you'll have to wait another three weeks before you can deposit again. (Or you could just drive to your nearest Indian casino and lose your mortgage- just another layer of the hypocrisy within this bill.) If a player wanted to gamble more than that online, they would have to file a credit report; and only by meeting strict financial criteria could they increase their limits. This report would have to be refiled regularly (quarterly? semi-annually?) to ensure that the player was not doing irreparable damage to their personal finances.

It may not be the healthiest habit in the world, but gambling is a part of the American culture. The state of Nevada has long understood the value of capitalizing on people who choose this form of recreation within their brick-and-mortar casinos. Now it's time for the other 49 states to recognize this reality in the virtual world.

And God Bless America.